You may never of seen a BMW M5 drift around the local roads in your town but imagine how insanely cool it would be if you did?
1. Everybody always agrees with you. Because they don’t. They’re lying to you. And it’s your fault they are, because you make them.
2. You talk more than you listen.
3. Nobody who works for you owns anything by themselves. And I mean ownership as owning a task, having responsibility, being empowered to operate, make decisions, and – yes – make mistakes.
4. You do all the work. Because you don’t, really. If you think you do, then you’re not giving others enough credit.
5. You correct people more than you applaud people.
6. You take more credit than you give
7. Achievement in your group is something you bestow on people, rather than something they achieve themselves in the objective numbers they’re responsible for.
8. It takes your people time to think when asked what ideas you stand for, or what you believe in.
9. You don’t get bad news quickly. That means people are worrying about how to tell you. People hide bad news or, worse still, spin it to look like good news.
10. You criticize more than you collaborate.
This is Patagonia’s Nano Puff Vest that I got for Christmas, I wanted something light, durable and that would last. With Patagonia’s Ironclad Guarantee, I knew it would be an article of clothing that I could depend on and would be a staple in my wardrobe. If you haven’t heard about the company before, I think you should take a look.
There’s not one vocal cord in her voice that doesn’t make me shiver. Florence + The Machine’s cover of the popular Rihanna & Drake original will have you wondering who the real artist is. Their newest album Ceremonials will give you the same effect, enjoy.
This is Miansai’s bracelet that I mentioned in my post yesterday. Burgundy leather with brass anchor, I added it to my Amazon Wish List (I’ll let you take a look if you feel like being generous this holiday season). Today I noticed that Nick Wooster chose this same bracelet for his Gift Guide on GQ’s website!
About two day’s ago I came across an article from Paul Krugman’s blog on New York Times called Gross Confusion, where Krugman questions Bill Gross’ op-ed article on how low interest rates are not helping the economy but actually hurting it. Both are well known financial gurus; Paul Krugman, a liberal, Keynesian economist and professor of Economics at Princeton University and Bill Gross the co-founder of Pacific Investment Management (PIMCO) where he manages the world’s largest mutual fund, the Total Return Fund with assets of $242.7 billion.
Check out Yahoo! Finance and you can see that interest rates have been at all-time lows since the Financial Crisis. But are these Federal Reserve induced interest rates capable of resurrecting our economy from it’s grave? Bill Gross doesn’t think so and neither does Peter Schiff, CEO of Euro Pacific Capital and economics commentator of the Austrian School. Schiff states in a recent YouTube video about Fed’s Operation Twist that, “Maybe one of the reasons the economy is in so much trouble is because interest rates are already too low. Maybe low interest rates are not part of the solution, maybe they are part of the problem.”
It’s important to understand how low interest rates and the Federal Reserve’s most recent effort called Operation Twist will affect our country and our financial institutions. Operation Twist, for those of you who are not aware, is a program that Bernanke and the Fed started that will sell $400 billion of short-term notes from it’s balance sheet and purchase long-term Treasuries such as 5-Year and 30-Year bonds lengthening the duration of it’s balance sheet. This twist would lower interest rates on longer term bonds and in effect allow home owners to refinance their mortgages at a lower interest rate and provide small businesses with cheap borrowing. But as Schiff states in his video, while homeowners will save money on mortgage payments if they refinance it will also hurt the lenders who are putting this extra money into the pockets of it’s borrowers. As banks receive less in mortgage payments from the borrowers they have less capital to loan to expand or hire more employees.
Let’s take a look at Bank of America’s shares since Operation Twist was started in September 21, 2011; At the closing price of $6.38 on Sept. 21st and the close of BAC’s shares today at $5.17, that’s a -18% move lower. One quote that Krugman cited on his blog from Gross was “…banks no longer aggressively pursue deposits because of the difficulty in profiting from their deployment.” Bill Gross states that deposits when reinvested risk free at a spread (difference between two prices) that is getting smaller and smaller as short term treasuries (the reinvestment vehicles that banks pursue) interest rates fall further.
So as your money sits in banks returning as close to 0% as possible, would it be smart to raise interest rates on your deposits? That answer is definitely not. At least not until the interest rates on short-term and long-term rates rise creating a positive and profit producing spread that will enable banks to attract more depositors with higher savings and money market fund rates on their deposits. The Asian Crisis in 1997 provides some background to why banks should not raise interest rates for depositors. During the late 1990’s Thailand at the time was a fast growing developing country with large amounts of foreign investment subsidizing their growth but once their economy started to falter countries started to pull their money out of the Thailand. Depositors started to pull their money out of banks and as a way to keep depositors from withdrawing their money Thailand decided to raise interest rates. Sounds like a fool proof plan right? The problem with raising interest rates on deposits is that Thai banks also had to raise interest rates on those who were borrowing money, making it more difficult for borrowers to repay their loans and discouraging new borrowing. This led to Thailand to de-peg the Baht (Thailand’s currency) to the Dollar creating a lack of confidence in the central bank. The Baht fell 20% over a 5-month period creating chaos to the entire Asian market with externalities all over the world.