Thursday, January 18, 2018

The 2017 Fake News Awards

I recently watched a great movie about the fantastic journalistic work done by the Boston Globe barely fifteen years ago. Spotlight, the movie, describes how Spotlight, the special investigative team within the Boston Globe, uncovered the corruption of child abuse by the Catholic church in Boston. Taking on Catholicism in a city where more than half of the population are of the same religion was quite heroic to say the least. The Boston Globe risked ruining their business in the process of their investigation. Not only where city officials and police corrupt, but catholic readers could have taken their anger against the newspaper as well. 
To compound things, all relevant documents needed to prove the crimes were either hidden by the court system or fell outside of the Freedom of Information Act. Then there was the issue that statute of limitations were long expired since all children molestations were being reported mostly after the victims became adults. Still, the movie depicts how real reporters had to work; doing exhaustive research to find the truth. That was a time when a single source of information wasn't enough. Newspaper editors demanded at least two credible sources for all news to be printed. 

Compare that to what is happening today. You have The New York Times, formerly the most credible news source in the world, stating that Trump did something wrong and quoting a single source who didn't show the document to the reporter but who read it over the phone instead. And what about a second source to corroborate what is being reported? Well, the media giant no longer cares about such formalities. They are now the gunslingers of the news.
It's incredible to see how far they have strayed away from the truth. It all looks and smells like the last days of an industry that soon will be gone. I have seen this before. I have witnessed the same drums of decay resonating through the air. The clear corruption among the great names of yesterday seems to define the last chapter on the life of such giants. And then there is the fact that the real publishing and investigative work is now being done by non-profits. Just a few years ago, no one had heard of WikileaksProject VeritasJudicial Watch and the American Center for Law and Justice. Yet, they have quickly become our only sources for transparency.  
Honestly, I don't think we'll miss the old names. As soon as they stopped delivering the truth and focused on promoting their so called 'fair' opinion, they became irrelevant to us. Thankfully, we figured it all out quickly enough. We should be grateful towards the free-market that provided us with viable alternatives at the time we needed real information and transparency most.

Just in, the White House announced the 2017 Fake News Awards. To read more about these recognitions, click here to go to the Republican Party's website.

1st Place: The New York Times
The New York Times’ Paul Krugman claimed on the day of President Trump’s historic, landslide victory that the economy would never recover.
Paul Krugman, 2017 Fake News Winner

2nd Place: ABC 
ABC News' Brian Ross CHOKES and sends markets in a downward spiral with false report.

3rd Place: CNN 
CNN FALSELY reported that candidate Donald Trump and his son Donald J. Trump, Jr. had access to hacked documents from WikiLeaks.

4th Place: TIME 
TIME FALSELY reported that President Trump removed a bust of Martin Luther King, Jr. from the Oval Office.

5th Place: Washington Post 
Washington Post FALSELY reported the President’s massive sold-out rally in Pensacola, Florida was empty. Dishonest reporter showed picture of empty arena HOURS before crowd started pouring in.

6th Place: CNN 
CNN FALSELY edited a video to make it appear President Trump defiantly overfed fish during a visit with the Japanese prime minister. Japanese prime minister actually led the way with the feeding.

7th Place: CNN 
CNN FALSELY reported about Anthony Scaramucci’s meeting with a Russian, but retracted it due to a “significant breakdown in process.”

8th Place: Newsweek 
Newsweek FALSELY reported that Polish First Lady Agata Kornhauser-Duda did not shake President Trump’s hand.

9th Place: CNN 
CNN FALSELY reported that former FBI Director James Comey would dispute President Trump’s claim that he was told he is not under investigation.

10th Place: The New York Times
The New York Times FALSELY claimed on the front page that the Trump administration had hidden a climate report.

Honorable Mention: 
And last, but not least: "RUSSIA COLLUSION!" Russian collusion is perhaps the greatest hoax perpetrated on the American people. THERE IS NO COLLUSION!
Russia Collusion Hoax

Sunday, January 14, 2018

Low Friction Marketing

Ice skater in orange and black quickly moving right with the text "low friction marketing" on black letters on the rightWhat does marketing mean to your organization? Is marketing an operational expense or a profit center? The difference is not academic. It can mean leaving thousands or millions of dollars in profits on the table. In fact, marketing should be a leveraged asset to your company; it should transform a small operational investment into a much larger bottom-line improvement, today and overtime.
Exceptional marketing transcends the sum of marketing activities. This is a case where the 'whole' is much larger than the parts. Two companies can easily invest the same time  and money into equivalent marketing activities and still achieve completely different results.
Female Millennial Marketing Guru taking a selfie with extreme body languageSo how to know the difference? Let's start from the beginning. You hire a marketing expert. She looks the part; from fashionable dressing, to accentuated body language, to chic enunciation. All her descriptions rely on colorful images that seem to float in midair. Her marketing strategy is loaded with the latest trends in social media. Needless to say, it's hard to argue against any of it.
But how effective is all that? A little over 12 Years ago, marketing gurus exulted the value of Flash coding. Flash promised to be a fantastic way to make your website stand out over the crowd while making it much more interesting and entertaining. Thankfully, time proved that your online consumers don't have the attention characteristics of a two-year-old. After every website in the planet attempted to maximize the use of Flash, the hyperactive graphics slowed downloading and made them all look commonly noisy and annoying. Rather than standing over the crowd, they all became the crowd.
Today, we have worked our way back into the time-tested method of simplicity. The almost pale looking websites of today are easier to read and navigate. There's a lot to be said about simple and effective messaging.
Composite image in black and white of made up add for AMC Pacer with the text "New AMC Pacer. The first wide small car".
Yes, time proved that Flash gurus were wrong. This is because time is a ruthless judge. Almost all the must-have marketing trends of yesterday have reverted over time. Even AMC's Pacer was revered by the gurus after its launch. Disgusting indeed. I anticipate that the same reversion to the mean awaits the must-have trends of today. Regression from these extremes is normal.
But how is it possible? Aren't we a society that constantly demands progress? Don't we need marketing to evolves at the same pace as technology? Well, the answer is no. As for the reason, it's a simple one. Humans don't evolve at the same rate as technology. Our bodies have hardly changed for the last million years. While our mental processing has increased, we're doing it with the same old hardware.
Meanwhile, our environment is as noisy as ever. The number of things clamoring for our attention have certainly increased. As a result, it's simple and clear messages that gain our attention.
Composite image over white background of a pile of remotes on the left and an iPod on the right.
Think of the fact that tens of thousands of the most brilliant engineers and marketers continue to design ever more complex remote controllers for the many electronics around us. Every extra button promises to open a gate to a new feature. Moreover, consumer electronic manufacturers argued that a dependency on specifications made innovative technology intrinsically male. In other words, a larger number of buttons meant a higher degree of masculinity. Not surprisingly, they were very wrong. Remote control users, male and female, continued to ignore most of such buttons. Average users relied on a few familiar buttons for their operational needs. This meant that, to most people, most evolutionary changes in technology remained unnecessary.
And then something brilliant took place. Apple introduced the iPod. A little electronic gizmo smaller than most remotes. Remarkably, the iPod needed only two buttons to give access to a plethora of features and functions. The rest, as they say, is history. A revolution in consumer acceptance took place. Apple's products, lacking technological superiority over their competitors, became incredibly successful thanks to their simplicity. Contrast this with the fact that NOKIA phones where once the most advanced cell phones in the pre-smartphone era. Still, NOKIA sales in the biggest market in the world, the US, failed against all metrics. Apple's experience demonstrated that a holistic approach to marketing is paramount. It's essential to understand users and their nature. Humans gravitate towards simplicity.
In engineering terms, we're talking about low friction interfaces between the technology and the user. Any engineer will easily understand the idea that low friction is essential when designing a mechanical device. An engine with too many rods, exchangers, transformers and connections will result in excessive friction and a subsequent loss of energy. Aside from being deficient, the engine will inevitably self-destruct.
Generally, low friction is achieved through minimalist designs. In the same way, the conversion from technology to user experience goes through different interfaces that can result in predicted losses and perhaps catastrophic failure. This is what happens when your products and services are rejected by consumers regardless of innovation value.
BOSE makes some of the lowest quality consumer electronics products in the world. Have you ever heard professionals in the industry say "no highs, no lows, must be BOSE?" Still, these guys are masters of low friction selling, marketing and use. As a result, their consumers love BOSE widgets so much that they're willing to certify their affinity by paying the highest price premiums in the industry. Yes, BOSE like Apple know the bottom line value of low friction marketing.
But isn't marketing only about advertising and using social media? Again, no. Opening an Apple device is such an experience that hundreds of people document the process and share it over YouTube for anyone to see. Look it up. This means that properly designed packaging can give so much satisfaction as to create a viral wave. Talk about marketing effectiveness. Two companies create packaging at the same expense. One goes unnoticed while the other increases sales by transforming packaging into a profit center.
The American Marketing Association defines marketing as "creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large." They have clearly adopted the holistic view. Notice that their definition is not limited to just creating demand for a product or service. It is also worth considering the fact that they're not saying anything about social media which is today's buzzword everywhere.
composite image of "fired"sign on the left and steve jobs at the right, all over white background.Look at any marketing job description today and you will find that every one of them demands search engine optimization (SEO) and social media excellence. Under such conditions, Steve Jobs would never land a marketing job. Both SEO and social media reflect expertise on database and algorithm design. Neither have anything to do with understanding human nature; something that separated Steve Jobs from the rest.
Before our ubiquitous use of smart phones and tablets as personal assistants, Apple had a product called Newton that require a stylus. There's no doubt that the Newton deployed the latest and technology at that time. Still, Steve Jobs discontinued the product because the need for a stylus meant that consumers couldn't use their fingers to operate it. The stylus was an unwelcomed additional step in the user's experience. Steve Jobs waited until touchscreen technology made the iPad and iPhone possible. To create incredible success, Steve Jobs focused on human nature rather than technology.
composite image of social media names and logos in the background and two black and white people covering their ears in front of itBut can all job listings demanding SEO and social media expertise be wrong? Is it possible that social media is useless? Unfortunately the answer isn't so simple. Yes, most human resource departments are blinded by the social media fad. The noise is deafening in this zero-sum game.
Yet, social media use doesn't have to be a waste of time. Consider one of the most expensive kitchen utensils available in the market: a Bledtech blender. Yes, even something as basic as the time-tested kitchen blender can become exciting enough to go viral. But simply going viral isn't valuable enough. Real value resides in the tens of thousands of consumers who happily opened their wallets to pay a five-times premium for one of these machines. Blendtec created a series of YouTube videos that highlighted the durable nature of their blenders. Through a simply-produced series of videos, viewers can indulge all their destructive desires as anything from cubic zirconia to iPhone's are pulverized by a Blentec blender. Everything becomes liquefied; literally. Even Costco couldn't ignore the videos'effectiveness. In a world of highly commoditized products with perpetually lower profits, Blendtec found a path to extreme profits and a much wider distribution network than would normally be the case for such a niche product. Throughout, Blendtec's advertising costs remain very low by all marketing standards.
And then there's those who spend just to spend. It's said that Coca-Cola knows that 50% of their marketing budget is wasteful. Their problem is that they don't know which 50%. Don't make the same mistake. Many companies treat marketing expenses as pacifiers. Their leaders are emotionally satisfied only after continuing to spend on the same untested marketing efforts. Department managers are giving their marketing budgets with the expectation that they will spend all the funds. This is detrimental to your bottom line and produces no value to society. Everybody loses.
image of farmer following a herd of sheep.In a nutshell, understand your users, consumers, partners, distributors, buyers, sponsors and even your own salespeople. Focus on their fundamental nature. Make products and services that they all can resonate with. Communicate such resonating values to all of them in a simple and succinct fashion. Reduce all interface frictions. Measure all performance and don't waste your money. Finally, don't follow the herd and deploy low friction marketing. To be remarkable and effective, it's essential that your marketing stays clear of all trend noise and lands precisely over the fundamental human nature.

Sunday, December 10, 2017

The Swedish Century-Long Overnight-Success

composed image of Swedish flag and industrial crane profilesHow do you make a small fortune? You start with a bigger one. This is the model of the modern socialist system in Sweden. But many progressives and socialists will try to convince you that it is possible to create a successful country out of an economic model relying on high taxation and lots of welfare distributions.
Yet, the reality couldn't be further from the truth. If you think about it, it's mathematically impossible. Wealth depends on compounded accumulation rather than progressive redistribution.
picture of Jacqueline Kennedy Onassis and Aristotle Onassis
Jacqueline Kennedy Onassis and Aristotle Onassis
Even Aristotle Onassis, once the richest man in the world, had to divorce his American queen, Jacquelyn Kennedy Onassis, She was spending more in a day than his complete maritime empire could profit in the same period. The lesson to the world was that spending will always have the advantage over income.
Progressives will point to the fact that Sweden, despite high taxes and a large welfare system, is a rich country and ignore that Scandinavians under a different system in the US are also rich. This is the problem with correlations. It is difficult to know which what causes what, if at all. In some cases, correlations have no bearing on what causes things. Still, this doesn't stop those on the left to make the claim and feel to be on the rational side of the argument. They are ignoring the fact that it may be Swedes that create wealth and not their system.
picture of thoughtful Mikhail Gorbachev
Mikhail Gorbachev
When Mikhail Gorbachev, the last USSR leader, was approached by his economic advisers to perhaps consider the Swedish economic model as a way to save mother Russia, Gorbachev is said to have asked "but where can we get all those Swedes?" Perhaps he knew better than modern socialists.
Meanwhile, the reality behind the apparent overnight success of the Swedish model is that it took close to a century to create. It started after the industrial revolution. It took a very trusting and homogeneous Lutheran society who shamed themselves for not working or for receiving social assistance. Their hard working ethic compounded with the most free of economic markets and the lowest collected taxes as a percentage of GDP. Here, it's important to highlight that we are not talking about tax rate but rather tax collections. As I previously discussed in this blog, US tax rates were highest during the second world war period while tax collections were lowest during the same period. That's the little dirty secret of the tax system. But we digress.
So, as Sweden grew personal wealth by openly trading with everyone, through low taxation, through exhaustive work and by not accepting any government assistance, things were ideal for the socialists to begin the process of wealth destruction during the 70's.
picture of Vladimir Lenin in front of a crowd
Vladimir Lenin
The socialist formula has never changed. First find a place where wealth was created. Since good living makes people lower their guard, start telling them that you are there to protect them. Make them believe you. Then start redistributing the money from the rich to the poor. If there are no poor, then import them. Later, when things start getting tough, blame free markets and businesses. Then repeat over and over again.
As Vladimir Lenin, the man who started the massacre of close to 100 million people in Russia used to say, "the truth about history is that it doesn't teach us anything".

For an additional look at the source that inspired this article, check this video by Johan Norberg where he discusses The Swedish model - myths and realities:

Tuesday, October 24, 2017

Breaking News: Clinton and Democrats Pay for False Dossier

The Trump-Russia collusion story is based on a secret paper which the Washington Post, a Clinton loving newspaper, now says was paid by Clinton and the Democrats. No doubt that 'sunlight disinfects'. As the corruption of the left is exposed to the light of truth, more and more of their deceit and lies will evaporate.
The Clinton's Crime Syndicate under scrutiny

Friday, October 13, 2017

Tax Rhetoric Hides Real Issue

Media Noise on Tax Reform
Talk about tax reform is everywhere in the news these days. The media tells us that the proposed changes are bad for us. Understandably, those proposing the changes disagree. So what does all the noise mean to you and your business?
The problem with the subject of taxation is that it poses special difficulties to those attempting to forecast outcomes. It's possible for diametrically opposed tax plans to promise the same positive outcome, for example. Therefore, the subject lends itself to manipulation by unethical politicians and news people alike. The natural complexity also serves to hide what's really important to all of us. So, let's understand the effects of tax changes. Then, let's consider the real threat to the wellbeing of our nation; a subject no one is talking about.
To understand why tax reform outcomes are so difficult to interpret we need to look at how complex systems work. Complex systems act in a seemingly random fashion as participants within the system change their behavior in response to other participants.
Let me explain with the following scenario. Assume that we get together a thousand of the smartest PhD's in the country. We'll call them the Federal Reserve or FED for short.
Picture of Federal Reserve Board, circa 1917
Federal Reserve Board, 1917
This FED has the responsibility to ensure a better economic future for all of us. The FED will study the economic market; a flexible group of players following their self interest. Then, when it sees trouble ahead, the FED will intervene to prevent any negative outcomes. Ironically, the FED will thus become the largest player in the system.
This game really begun in December of 1913. So far, the super smart people at the FED have never anticipated a single economic downturn. In fact, the FED now accepts that they are 'data dependant'; they admit to being myopic. Without visibility past their nose, they utterly 'depend' on where 'data' is right now. To make matters more confusing, other players follow every action by the FED as a sign of what's to come. It's a real case of the blind leading the blind.
At times, complex systems follow a single general direction. For example, we know that more people in a market will make the number of transactions grow. While the relationship between number of players and number of transactions is not precise, the general correlation is positive. As population has continued to grow, the number of transactions has done the same in what looks like limitless duration.  
Complex System
But then there are times when these systems periodically return to their base or mean. Market risk is a good example. The risk faced by market players alters direction because it can't continue to increase or decrease indefinitely.
The problem with complex systems is that they represent the total combination of many of these two types of movements. At times, linear movements dominate only to suddenly give in to reversion to the mean.
Think about it. It's even possible for the same participants to act differently when faced with the same circumstances. Their actions could be altered by their memory of recent success or failure, for example.
All these facts make it impossible to establish rigid expectations. So don't be surprised when the smartest scientist can't guess the path of a hurricane a few days before it makes land or when the Federal Reserve makes a catastrophic mistake with the economy. Both, the economy and the weather are complex systems. Likewise, do you really expect the TV host to be able to correctly determine what will happen after a new tax structure is implemented? No chance.
Here, please pardon the fact that I took way too long to elaborate my point; I really wanted to make it very clear. News people are as clueless as any of us. Don't waste your time listening to their opinion disguised as a news fact. For a more productive outcome, read a fiction novel instead.
Still, the media will try to convince you. And since most of the media has a left bias, they'll generally argue that paying more taxes and a bigger government are better.
Government Skeptics
Now that if you see big government with skepticism, don't distress. You are not alone. In fact, you are in great company. Our nation's forefathers shared the same skepticism. This is why our constitution was written to limit government power.
Our constitution has served us well for close to 230 years; resulting in the most successful nation in history. Our system is in fact so great that countries all around the world voluntarily adopt many of its characteristics. Subsequently, billions of people have left poverty behind.
Yes, before Europeans started to brag about their young and relatively untested socialist system of big government and heavy taxation, they needed our help rebuilding after their past mistakes. So, when the left leaning media tries to tell you that European's pay more taxes and manage to live better than we do, remember that their opinion isn't so correct.
Look at Holland. To get all the extra goodies dished out by their government, the land of public sex displays has severely mortgaged their future. To revert path, Holland will have to cut national expenditures by 10% and then endure 10 years of doubling tax rates to 100%. Their debt is so humongous that it can only be solved with 10 years of complete slavery to the government. Now you see why their politicians are so happy. There is more than cannabis behind their smirk.
Historic Tax Rates
Another strong argument the media exploits to defend their position is that higher post-WWII taxes resulted in a better economy for the US. Here again, they are missing about half of the complex system's picture. Yes, the US had tremendously high taxes in paper after WWII. But no, people didn't actually pay them.
Does anyone recall that business schools were nonexistent until much after the big war? Before universities found a way to educate future business leaders most CEO's were attorneys. Back then, being a lawyer was essential for guiding a company around government regulation.
Tax rates down; tax revenue up.
When looking at government tax receipts on a per capita basis and adjusted to inflation, it's sad to see that we pay much higher taxes today than we did after WWII despite having a lower rate. The chart clearly shows how tax rates have gone down while tax collections have gone up.
Reagan found that tax evasion eased when taxes were seen as reasonable. The inverse of this fact is why Greece collects no taxes at all. When taxes are unbelievably high, people will do anything not to pay.
In the economic complex system, players will be more willing to increase their activity in an environment of fair taxation. Then, higher player activity will conceivably result in tax receipts sufficient enough to compensate for the loss by rate reductions. This is when politicians use the term "revenue neutral". Nonetheless, don't believe them when they use it. Both sides can easily claim revenue neutrality from clearly opposing plans.
Yet, tax receipts won't be enough for our present government expenditures. Right now, our government borrows an additional 48 cents for every dollar in taxes we pay them. It's clear we can't afford our present government. We would need to cut government spending by 32%1 to get back to break even. This will do nothing about paying off our debt. We would simply stop the bleeding.
US Total Budget, 2016
Look at the pie chart here and tell me what part of government would you cut to get the 32% reduction? I bet you can't. We are accustomed to the good stuff even when clearly insolvent.
Then, to compound our challenges, we spend the equivalent to little less than half of our massive military budget on interest payments alone. We are buried under a pile of debt.
Do you want to experience real fear? Consider the fact that our debt pays close to zero percent in interests. Think of it, if interest rates go to their 4% long term average, we will be spending double the current military budget on interests alone.
Let me make my opinion clear. Talking about taxes is important. But the real conversation to have is about debt. We are broke. We have to tighten the belt and figure how to get us back to balance sheet health. We can argue the best way to solve it. But there is no escaping the subject. Your business' future and that of your family are at risk. Let's redirect the conversation as soon as possible.

1 Take one dollar plus 48 cents. Then calculate it's inverse. Then subtract 1 to come up with the 32 cents or 32% needed in lower government expenditures to bring us back to a point where we are not borrowing any more money.

Saturday, October 7, 2017

Sound Management after Music Paradigm

You're coaching one of your managers, but all you get is the 'deer in the headlights' look. You try to be clear. Your manager's actions and body language around the office are sending a conflicting messages to the team. The unintended result is that team's productivity and focus is suffering.
composite photo image of manager with 'deer in the headlights' to a low performance chart Frustratingly, your point isn't getting through. Your manager blames the team for all shortfalls. There's no understanding that the problem is managerial in nature. You're even told that performance isn't "so bad".
But you know better. You know the difference. You know what's missing in their performance.
Why hasn't anyone developed a tool to solve your problem? You believe in coaching your team to help them reach higher levels of effectiveness. You know that everybody wins wherever there's exceptional productivity. So, having a way to clearly show what happens to your team's performance when management is executed exceptionally well would be fantastic indeed. But how to make it tactile enough so that anyone can 'touch and feel' the difference?
Well, your cry has been heard.
There is a fantastic tool for leaders who want to take their team beyond common daily platitudes and towards a clear understanding of those special aspects that cause maximum performance out of professional teams.
But be ready to be surprised because the solution to your challenge is not the usual rigid presentation where a very smart person talks to your team while they vigorously attempt to take notes. No. The right way to teach your all stars is through music. Yes, you read it right. Music!
Enter Music Paradigm; the brainchild of Maestro Roger Nierenberg.
color picture of Music Paradigm's founder, Maestro Roger Nierenberg
Maestro Roger Nierenberg
With a world class resume, Maestro Nierenberg has recorded with the London Philharmonic and conducted at both the Prague Spring Festival and the Beijing Festival. He has guest-conducted the National Symphony, the Opera Theatre of Saint Louis, the Detroit Symphony, the Saint Louis Symphony, the Baltimore Symphony, the Indianapolis Symphony, the San Diego Symphony and many other great American orchestras. Master Nierenberg  also had long, successful tenures as Music Director of both the Stamford Symphony in Connecticut and the Jacksonville Symphony in Florida.
One day, Maestro Nierenberg realized that orchestra directors like himself faced the same challenges as leaders who believe in hiring the best employees available. While their teams perform fine under most circumstances, the real magic only happens when management is exceptionally executed. So the idea was born to create an immersive demonstration beyond everybody's wildest dreams.
Picture this: you take your management team to an event where they will listen to the most beautiful music in the world. Moreover, they'll get a rare peek at what happens behind the scenes.
Your managers will seat side by side with professionals who have such strong commitment to their trade that they literally gave up thousands of hours of fun for a chance to improve their skill.
composite image of Music Paradigm attendants with music graphics around it.
Managerial insight during Music Paradigm
We are sure to think that people of such high commitment do not need management. It's to be expected. So, imagine how insightful it is when Maestro Nierenberg proves to you that his musicians are incredible by themselves but even better when properly managed. Music Paradigm will show you how communication can become both, immediate and effective, as long as we pay attention to others. He'll even reveal that your team knows more about your managerial faults than you dare to accept.
Maestro Nierenberg will demonstrate the value of hiring the very best. Even without formal, top-down leadership, real professionals manage in a 360 degree way that would make author John Maxwell proud.
Aside from delivering an enchanting musical experience Maestro Nierenberg obliterates misguided preconceptions on what makes a remarkable manager. The experience is fantastic at so many levels.
composite image of Music Paradigm attendants with music graphics around it.
There's only one Music Paradigm
As a leader, I have faced many challenges over the years. Being perpetually aware of the void in resources needed, I always keep an eye out for better ways to solve old problems. Thankfully, I had the luxury of witnessing Maestro Nierenberg give a group of promising managers the kind of insight unavailable anywhere else. And, since their gracious invitation allowed me to bring my wife, we also experienced a memorable musical presentation. Without fear of being hyperbolic, I can tell you that Music Paradigm is as special as a visit to Machu Picchu on a wonderfully sunny day. I learned so much while admiring incredible beauty. What are you waiting for? Call Music Paradigm today to schedule the same experience for your team. There is only one Machu Picchu just like there is only one Music Paradigm.

Contact Information:
The Music Paradigm

Wednesday, October 4, 2017

Black Friday Boom

Could this coming Friday be our economy's Black Friday? No, not Thanksgiving's Black Friday when all companies finally make a profit for the year. 
S&P Index Futures show a peak being formed
Instead, is this Friday going to become the top of the equities and bond bubbles artificially created by the Federal Reserve?
Surely I am not talking about bubbles that made things better for all of us. The recent highs in the equities market have demonstrated that while Wall Street can be joyfully celebrating, 'main street' can continue to suffer all along from a post-recessionary hangover.
During Obama's term, the cost of money for large organizations went so low that many CEO's decided to mortgage their company's future by padding their own bank accounts with lots of options on shares bought back from the market on borrowed money.
Stock Buybacks
This was a clear misallocation of resources; of the kind that central governments often incentivize. The cheap money allowed CEO's to buy back shares, thus improving the per share profit performance. This in turn made CEO's look so good that their job-well-done was rewarded with stock options. In a way, cheap Fed money allowed a transfer of wealth from investors to CEO's. Let's also remember that in a few years, all the current CEO's will be gone and not held to account any more. Yet, all company loans will have to be repaid with the future profits that would otherwise go to investors. You got to love the way the game is played. The stock market's optimistic booming picture disproportionally benefits company leaders more than any other stakeholder group.
Meanwhile, Obama also brought us a drying of the otherwise available capital that was needed for small business growth. For eight years, the cost of borrowing sky rocketed for small businesses regardless of where the Fed set their rates. But how could this happen? Well, it all resulted of the so-called economic stimulus by the Fed.
When the government bought so many of their own bonds, through transactions between the Fed and Treasury, most low risk assets were drained out of the market. This pressed low risk-tolerance lenders to compete for higher risk corporate bonds. The greater number of lenders competing for the same number of bonds pushed prices (interests) down. At the same time, this left lender portfolios with a higher risk profile than would normally be preferred. So, they then had to increase the price (interest) for small business loans to bring their risk profile back into shape. In a nutshell, next time the government tells you they are trying to help you, the small business owner, run for the exits. No matter how many PhD's work at our central bank, their actions will continue to result in big failures similar to those from Mao Tse Tung's great leap forward where 45 million people died after their government tried to help them.
Corporate Bond Cycle
For thirty years, the Fed has pushed interests lower and lower. Always with the goal of 'helping' the economy. Today, we are at the very end of one of those cycles that reverses about every 30 years. But whether the Fed actually prices interest rates higher or not, let's remember that bond prices are no more than a gauge of trust. If capital holders trust the environment, money flows into markets. When trust is lost, prices of bonds go sky high and capital drains out of markets. Interestingly, the same trust is what holds the price of stocks high. So, it is not unreasonable to think that we could face a pivotal change in the cost of money and a pivotal change on the cost of stocks, both at the same time. While bond charts show no more signs of peaking other than their cycle's maturity, equity markets are screaming 'top" like never before.
Elliot Wave Analysis of S&P 500
First, there is the fact that most large traders set price levels using the same technical analysis that shows that we are at a point where several longterm Fibonacci studies converge as tops.
Second, many more large traders look at what is called 'Elliot Wave' which is now calling for an end of an eight year move.
Finally, it's October. You know, all bad things in the stock market happen in October.
So, whether the bond and equity tops happen this Friday or the next, it seems clear that the difference is academic at best. The end of the current run seems upon us.
But, is it possible that I could be wrong; after all, there have been many calls for the top in recent years? Well, yes. I could be wrong.
Still, this week's relentless push upwards has the characteristic price action of a top. This week's price movement seems to be creating a Doji, a well known top formation used by 'Japanese Candle Sticks' chart readers. Yes, I know it all sounds funny and surreal. Still, these people make millions of dollars every year from looking at these studies that go back centuries.
In any case, I believe that, as a leader, one must be aware of any potential change in market sentiment. If a recession starts this month, it would last at least a year and a half. During such time, loans would be called back everywhere as lenders will try to reduce their risk profile. Capital will probably dry up. In extreme cases even trust between banks could create international commerce seizures due to an absence of international letters of credit. For a single day during the last recession, this same picture became a reality and all global commerce almost came to a halt. The risks are simply too high to ignore.
You have been forewarned. Let's hope I am wrong.

Thursday, September 28, 2017

Catalonia - Democracy and Freedom

It's fortunate that Great Britain exits the European Union without war. Remember the American Civil War where confederate states were forced to remain in the union after losing? 
Well, things could get dicey for another nation seeking freedom. 
I am talking about Catalonia. This powerful industrial region has quietly existed within Spain despite strong cultural-identity differences. Catalans are about to have a referendum vote this coming weekend. They will decide on whether to separate from Spain or remain as part of it. Well, at least that's what Catalans hope to do.
Spain's central government has different plans. Madrid is not about to let their golden goose depart freely. The issue of a Catalan secession is in fact so serious that it could leave the rest of Spain facing bankruptcy. Thus, as it's usually the case in matters of money, Spain seems ready to use blunt force to ensure Catalans don't get past their already crazy idea. Madrid's government has ordered the Catalan police, also known as Mossos, to close and occupy all polling premises this Saturday and Sunday. This order extends to any area near the polling stations. The Catalan people are being threatened with criminal prosecution for participating in the referendum whether inside polling stations or outside of them.
Totalitarians: Franco, Hitler & Mussolini
To many Catalans, totalitarianism ended with the death of General Francisco Franco, the fascist military dictator who kept Catalonia oppressed for way too long. Besides hating all things Catalan, Franco kept friendship with real bad guys like Hitler and Mussolini. Needless to say, his control methods were quite brutal as well.
Sadly, things have not changed much. I think that Catalans now understand that they still live under a police state. But rather than making Catalans give up, Spain's actions are reigniting a sense of urgency to vote for independence. It is now clear that their representative government cares nothing about democracy or exercising the will of the people.
Interestingly, most Americans know little about Catalonia. Before the Barcelona Olympics in 1992, most people had never even thought about traveling to this world class Catalan capital.
La Sagrada Familia by Gaudi
And like their beautiful capital, Catalans are remarkable people as well. I should know. I spent many years visiting their historic nation full of Roman amphitheaters, medieval cities to modern marvels. I even got to understand spoken and written Catalan. To this day, I continue to have many Catalan friends.
The stereotype that people in Mediterranean countries like Italy and Greece tend to be lacier than their Nordic counterparts does not apply to Catalonia. Catalans manage to be some of the most productive business people in the world. This means that Catalans know how to work while also enjoying one of the best diets anywhere; from fantastic salads to incredible cheeses and meats. In fact, the best restaurants in the universe are in Catalonia. Both, ElBulli and El Celler de Can Roca offer food that's out of this world, literally.
Look a little closer and you will find Catalan influence everywhere around the world. Jaime Nunó, a Catalan, wrote the music for Mexico's national anthem. Have you heard about master painters Joan Miró  or Salvador Dali? There is a Salvador Dali museum in Saint Petersburg, Florida, if you are curious. How about world class tenor Jose Carreras? Follow sports? Have you heard about NBA player Pau Gasol?  Even the guy who discovered America, a fellow under the name of Christopher Columbus, is now believed to have been from Catalonia rather than Italy, as previously thought. And why not? He departed from Barcelona on his way to America.
Catalans are great people in other ways as well. While they are responsible for 19% of Spain's economic output, they account for only 11% of the national spending budget. I don't know about you, but if I had to conquer a nation, I would chose one like Catalonia. They make you lots of money while spending very little.
Obviously the same cannot be said about the rest of Spain. Taking out the other highly productive area of Spain, the Basque region, Spanish generally love a good life without much worry for toil.
It is therefore of no surprise that Catalans had enough of the abuse. Likewise, the rest of Spain have not had enough of the good stuff Catalans create.
Sadly, I think that Madrid's clear abuse of power over Catalonia is the norm rather than the exception. I believe that, given the chance, governments will take away all our freedoms in the name of national interest.
This is why the subject of Globalism is so important for all of us to understand well. The potential risks associated with the present Globalist movement are too great to dismiss. Globalists will argue that their goal is to prevent future wars by uniting all people around the world. But what they really want is a super-government where politicians will forever be protected from the risk of losing power. In a nutshell, accepting Globalism will result in permanently saying goodbye to democracy.
Look at the most obvious Globalist model, the European Union. Ask any citizen within any EU nation the following question: how can you or any other citizen remove any of the EU politicians residing in Brussels for doing a bad job?
The EU; a politician's paradise
The short and surprising answer is that there is nothing that can be done. Brussels can create all the laws and regulations they want. Yet, citizens have no say on any of it. While people could fire their national government, changing parties in a place like France will do nothing to create even a small dent in Brussels. EU politicians have absolute power and all the impunity in the world.
But Globalists want more. The North Atlantic Treaty is the next stage on a progression towards a truly global union. I am so glad we are not part of it.
Think about it. Do you really believe that Marco Polo needed thousands of pages of contractual agreements to trade goods with Asians and Europeans? If we are honest about it, trade needs no government involvement. The Chinese renaissance started with farmers trading their surplus production outside of government oversight, not within it. Somehow, though, we have been so gullible that we bought the ridiculous idea that we needed governments for pretty much everything. Come to the middle of Florida to see what people do when a hurricane hits a rural area far from the immediate reach of government aid organizations. People help each other; that's what happens.
So what can we expect this weekend in Catalonia? Will Catalans get a chance to vote? I certainly hope so.
If Spain's central government deploys military force against the Catalan people, should we expect a revolution? I don't think so; Catalans are smarter than that.
Do I agree with a Catalan secession? Not necessarily. What I support is their democratic right to chose their future.
I don't care for the European Union and its Globalist agenda. Yet, it is highly possible that a Catalan independence would be followed by successful EU membership, even if Spain undermines Catalan efforts to join the club. In such case, Globalists would still win.
To end, I want to send a hello to all my Catalan friends. Let's hope that Madrid's forces remain peaceful and outside of your referendum efforts. In any case and regardless of your decision, Els catalans són una nació fantàstica.

The Catalan Burro continues to frustrate the Spanish Bull

2017-10-04 Update:
The referendum vote came and went. The police brutality was evident in many places as women and the elder were beaten up without mercy as the police tried to push peaceful demonstrations back. Even firefighters got into the picture when police attacked them for standing in defense of civilians.
At the end of the day, Catalans voted for independence. Yet, their government in Madrid says their vote was illegal, which is technically wrong. Being unconstitutional doesn't make it illegal. It just means that it can happen but will not be recognized. I guess that politicians will continue to paint things the best way that suits their purpose. Just look at Hillary's recent book where she blames everybody for her loss but her criminal actions.
Beyond being unconstitutional, many people say the referendum also doesn't follow international norms that call for oppression as a requisite for independence. But here again I'll throw the bullshit card. We all know that many not oppressed independence cases have been internationally accepted as long as the main global powers of US, UK and France recognize them. So, don't pee on my leg and tell me that it's raining. The truth about international laws is that they are designed to halt any progress not approved by those in power.
As for the European Union, well, it's clear that they are sold and paid for already. They are going to side with the globalists who want less independent nations rather than more of them. Besides, any attempt at a legal maneuver by Catalonia would be inhibited by the massive bureaucracy that the EU has built around what would otherwise be a simple concept. Do we remember that the US constitution fits in a small booklet smaller than a comic? Try that with the EU's version. So no hope for Catalonia there either.
I think that Catalans need to continue pressing their case without fear of missing on the chance to belong to the EU club. Switzerland is not part of the club and yet benefits from all the goodies. All Catalans need to do is maintain a solid balance sheet and a strong currency and everybody will want to associate with them. In other words, follow the example of Switzerland. Good luck!

Tuesday, August 29, 2017

Obama's Environmental Lies; Market Uncovers Truth.

Judicial Watch, Inc. v.
U.S. Environmental Protection Agency 
"Obama's going to end up in jail", I told my dinner party. Defensively, a young friend from Spain asked "why would he go to jail?". I told him that while I didn't know the specific broken law that would put him behind bars, Obama had broken so many laws that the possibility of him eventually falling from grace was high. Yes, the highest probability is that he won't do a single day in jail even when caught. To safeguard the integrity and honor of the office of the US president, Obama will surely receive a presidential pardon immediately after accepting guilt. But for all intents and purposes, Obama is a criminal who will be captured.
I understand why it is so difficult for many Europeans to understand why I speak of Obama, my former president, in such terms. After all, Obama was the face of the ever protecting government. Obama's promise to take care of the country in every aspect of daily life, is a message that resonated strongly with Europeans. Many Europeans love the comfort of a big government. In a way they are still emotionally shocked from the many wars they endured.
Yet, I think they're wrong. I think they're ignoring their own history. Totalitarianism, a system where government has "total" control over all aspects of its citizens' daily life, devastated country after country throughout Europe. It is clear that the fundamental reason behind the wars that so traumatized Europeans is 'big government'. Needless to say, I think Europeans misplace their trust. They're asking the wolf to watch over their chickens.
And there wasn't a bigger and meaner wolf than Obama; a man who follows the Chicago mob strategies of Saul Alinsky. The savagery first displayed by Al Capone's band, was brought to the White House with so much pomp that the news media and Hollywood fell in love with the idea of deploying the ultimate bad-soldier Army to support the ideals of the left. Under Obama, if a lie was to be told, then why not make it humongous. As a result, lies rained on American citizens for eight years.
So how do you catch a criminal in a world where your government is the criminal? What happens when police and investigators refused to incriminate their bosses? Isn't it true that we pay government the tax money needed for it to sustain a police and military force that will defend us from wrongdoing?
This is the problem with the government. It will not protect you from itself. At the core of the debate between socialism and market-based capitalism resides the size and power of government. Socialists seek the protection of a bigger government. Market faithful, on the other hand, believe that the answers will arise out of the ashes of self-interest. Honestly, the Phoenix like performance of markets seems at first sight to be more magical than real. So we shouldn't blame those of the socialist side for being skeptical; especially those with limited insight into the historical evidence.
Mao's Great Leap Forward's failure
Still, the truth is that markets work, no matter how counter intuitive they may seem. Mao Tse Tung's well intended socialism killed more than 45 million people. In an attempt to make their lives better, Mao's Great Leap Forward me the parents die of hunger, but not before they ate their children. No wonder it is said that the road to hell is paved with great intentions.
And to think the Social Justice Warriors want us to change history and condemn Christopher Columbus. From 1494 to 1508, Spaniards and Indians fought in wars that resulted in more than 3 million deaths; less than 7% of Mao's socialist damage. Let's keep in mind that Mao did his socialist magic in just four years. Clearly, socialism has a lot of explaining to do.
Social Justice Warriors
want to change history
As a system that depends on spending more value than it's created, socialism is destined to perpetually fail. And before offering Nordic countries as evidence against me, first look at their balance sheets. For all intents and purposes they are insolvent already. It's the dead-man-walking effect. We all know they're dead, but we don't tell them.
On the other hand, a market-based pressure valve was installed on Mao's China at the end of the 90s. As a result, China has continued to point towards the left as they clearly move rightwards. Chinese leadership knew that it was a matter of time for Chinese farmers to lead a second revolution. Interestingly, the solution to the social problem came from allowing farmers property rights to their productivity and access to a free market, the two things socialism negated.
I could go on and on about the many instances where markets have solved what governments couldn't. Instead, let's look at how markets can create solutions in areas well beyond our imagination. Can markets create a way for us to protect ourselves from government?
In 2015, Obama's administration issued the Clean Power Plan. In it, they quoted EPA scientist studies claiming that thousands of premature deaths would be prevented by the plan by 2030. Like with many other EPA and NASA reports, the Obama administration had no problem bending the truth beyond the point of obvious failure. But no one in government was going to say anything about it. All insiders, those people who perpetually work in government regardless of the party controlling the White House, generally vote Democrat. Why? It's simple, Democrats want more government. If you work for a company called government, don't you want it to grow? Well, all these insiders, now called the Deep State, understandably act in favor of those who want to bring more money to Washington. To them, Obama was something close to a God.
This meant that citizens in the US would never have a chance to see any other wrongdoings of Obama's administration.
Enter the market solution. The United States has different not-for-profit organizations that focus 100% on uncovering corruption in government. These are not agitators. There are no street demonstrations. There is no partisan agenda nor intent to manipulate the media or their message. These organizations are funded by citizens who support them through voluntary donations and without the need for a government enforced, gun-to-the-head tax.
Let's look at Judicial Watch. The oldest and most reputed of all such government watchdogs, Judicial Watch exclusively acts through the legal system. They first find areas of possible corruption. Next, they use either legal petitions or lawsuits to obtain evidence that will prove more disprove such corruption. Like all other market tools, Judicial Watch creates transparency in an environment where perpetrators malevolently hide everything.
Freedom Of Information Act
Based on the Freedom Of Information Act, often called FOIA, Judicial Watch requested the EPA to produce the study behind Obama's Clean Power Plan claims. Obviously the EPA did not want to cooperate. Thankfully, Judicial Watch is this patient is any. They know that every action they take is only one in a long chain. They continued with lawsuits after lawsuits. Eventually, they succeeded.
The scientific report says nothing about premature death prevention. The mystery that again. The scientific paper covered nothing relating to saving deaths.
The final stage in Judicial Watch's efforts is the press release where the truth finally comes out. Obama lied. This is not the only lie that they have proven any will not be the last, as there are thousands of lawsuits pending.
But if you think the judicial watch is an anti-environments or anti-left organization, think twice. They're also investigating Trump's government expenses for personal matters. In a nutshell, they go after everybody in government.
Just don't hold your breath thinking that CNN, Reuters or MSNBC will talk about any of Judicial Watch's uncovering of corruption activity by the Deep State and the Democrats. Such information can only be found through the new media. Here, the market has also created an army of former reporters and media producers who, after being dissatisfied with the pervasive corruption, have launched hundreds of YouTube channels of real investigative reporting.
Yes I know the noise of bad information on the web is loud and ever present, but in no time the new market will create the necessary transparency for people to transition from the old fake media to a new source of reliable news.
While the debate between socialism and free markets will continue, there are a couple of undeniables to ponder.  Big government has brought rampant corruption to Washington like no one expected. Also, big media has colluded with big-corrupt government to misinform the people. It is ironic that markets are creating solutions to both.
Vivan los Mercados!

The kind of work Judicial Watch does: