Category Archives: Problems

The Genius That Thought He Was Stupid

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Today I’m going to step outside of the finance and money world and tell a story about a friend that thought he was stupid (actually retarded to use his exact words).

einsteinsilly

First, let me describe my friend’s background…

He comes from a broken home, where much of his early life was he constantly moving, which includes living in bad neighborhoods and even basements at times.  Eventually his mother remarried and he now had a new family that he was apart of.  His new dad’s siblings was well-educated and intimidating to him.  Some of his step-dad’s brothers and sisters had earned top marks in school, with one even being a valedictorian.

He told me that he didn’t try very hard in school, and many of his family members downplayed the value of school even, still without even trying he was able to get Bs and Cs.  He thought that all the other kids in class must not have read or did any of the homework based on their answers in class, so he stopped reading and doing homework too.  Eventually the teachers started sending notes home, and only then did he put in a half-hearted effort.

Okay, the background is set, now onto why he thought he was stupid.

One of my friend’s new aunts (who was a TA in college at the time) brought home an IQ Test and wanted her brothers and sisters to take the test on some holiday when they were all together.  I think he said it was the Stanford Binet IQ test, but I can’t remember if that’s what he said for sure.  Anyway, they each took the test and after everybody took the test, she suggested that my friend take it too.  He resisted at first, but everybody egged him on so he took the plunge.  He said that he thought that she was trying to use him as a comparison for her family, and to say basically that her brothers and sisters were more intelligent.  After all, she was kind of like that and everybody in his step-dad’s family knew that his grades were mediocre at best.

So he went into a quiet room with a timer ticking, like the rest of the family did when the took the test.  He said that he remembered feeling like he did okay, and was surprised how easy the test was.  At least until his step-dad’s sister scored the test for everybody…

Below is an example of a Bell Curve that the scores were plotted on:

bellcurve

Now most kids would think that the top of the hill is the best location to be, and that’s what my friend thought too.  So he was pretty embarrassed when his new aunts and uncles were higher on the bell curve with scores near the top of the strange bell curve, while he was very close the X axis 0 staring point.  Thinking that having a 0 score was bad, he naturally assumed that he was retarded in some way to have such a low score so close to the x-axis.  His new step-dad x and all his sisters and brothers were higher up the hill than he was.  The brother that had a score almost as low as his was his dad’s brother, who was an engineer, but he didn’t know what that meant at that point in time.  Ironically, all of the other brothers and sisters picked on the brother that was an engineer, and that brother was always joking and clowning around.  So in his mind, he said that it made sense that the brother would be the least intelligent of his new step-dad’s brothers and sisters, or at least so it seemed back then.

He said he couldn’t remember if he was near tears, but he must have been because everybody came to his aid, telling him that he scored the highest of the group and did most excellently.  This just made him feel worse though because he still believe that near the top was a higher score, and if he was stupid, such manner of speaking to him to make him feel better would be excepted.

So he left that house that day thinking that while he didn’t think he was retarded totally (after all, who get a 0 on a test?), he must be stupid.  He also believe that he must have performed poorly on the test.  And so for years, he thought he was slow… kind of ironic huh.

Anyway, I thought it was a funny and interesting story that I would share.

Bests,

Don

 

Death of Hostess Company And Possible Results

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First of, let me say that I think it’s foolish of the Baker’s Union to let the Hostess Company fail.  In my opinion reduced income is better than no income!

The Hostess company have filed for bankruptcy before back in 2004.  The cause of the previous bankruptcy was debt!  The debt was comprised of pension obligations, labor and a product that is falling out of favor with consumers (I use to love twinkies, but I haven’t bought one in years).

The Hostess company did emerge from bankruptcy in 2009 (with the help of money from 2 hedge funds), but apparently it wasn’t enough.

One of the unions (the Teamsters) already agreed to cuts.  Perhaps the Teamsters realized that the company was already in trouble financially and the extended strike would put it out of business (which it appears it now is).

It’s a shame the baker’s union didn’t talk to the Teamsters union about why they took the offer.  Perhaps this company would still be running today.  I think unions should understand finances before making demands.

What will happen to our Twinkies (Ho Hos and Wonderbread too)?

Basically, it will either be absorbed by other competing companies in the same industry, or an up-shoot will be created overseas and produce the same product that will be shipped here and sold.  The labor is so cheap overseas that it still might be worth it to build a plant over there, even with the shipping cost included.  Of course, there is always Mexico too, perhaps someone will setup a plant down there.  Anyway that you look at it, the Baker’s union workers are the ones that will lose.  This is a sad day for them, especially with a potential recession looming next year, and the flight of companies to countries with a much cheaper labor force.  I wonder when someone in the government will start to work on the currency issue and how it doesn’t make sense that working in the US workers get paid around $20 per hr vs less than $1.5 per hr is certain countries.

I know there aren’t any easy solutions, but until such financial inequalities are addressed, I can see more and more US companies closing. If a product cost $2.00 to produce in the US to make and put that product on a department shelf, and if a similar product only cost $1.00 from an overseas company to make and put on the shelf right beside the US one… Well, based on the success of Walmart, it’s kind of obvious which product will be bought by consumers.  After all, who want to pay more for essentially the same or extremely similar product?

On a lighter, more temporary note, I’m sure these Hostess products will increase store sales in the very short term as people try to get their one last chance to eat a Twinkie or whatever their favorite Hostess Product was…

Sad day, not only for the Hostess products, but also the 18,500 jobs lost!

Don

Using the Right Tool For The Job

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Having the Right Tool For The Job

I don’t consider myself a wimpy man by any means, but last summer what I was working to replace the rotor on my front braking system, I couldn’t for the life of me, get a nut off.  Now matter how hard I pulled or pushed or how many of the tricks I tried, the nut wouldn’t budge!  At one point in desperation I even took a hammer and was taping the wrench handle with it, trying to get the nut to loosen.  I know this was a dumb move, but I tried it anyway, realizing that there might be the possibility that the screw that the nut was on might break.  Still it wouldn’t budge!  This is when I learned that instead of “brute forcing” a problem, to instead use the right tool for the job to make the task quicker and easier!

Finally, I was telling a friend at work and he said why not just go to Autozone and borrow a breaker bar?  A breaker bar is a swiveling socket attached to handle the length of a small broom!  Sure enough, I borrowed that (Autozone has a great policy about such things), and with just a bit of pressure applied, sure enough the nut twisted off like it was taken off the day before (which obviously it wasn’t, lol).

breaker bar

My experience ended well, but such is not always the case!  I was luck to have a friend with a great suggestion about I tool I forgot about and never used previously.  But back when I worked for a construction company, I saw something that task that ended up being an expensive operation for another construction company.

You see there were two building that were fairly close to one another and something between them needed dug out to be fixed or replaced.  While I was working with the construction company that I was working for at the time, I noticed a few guy daily going into this narrow strip and digging and wheelbarrowing out loads after loads of dirt.  It look like a hard process and they were still working on it the construction job we were working on was finished.  I remember thinking there must be an easier, quicker way of going that task.  Later, I was looking through a magazine and came across something called mini excavators.

mini excavator

mini excavator

 

These handy little machines would have been perfect for the task that I saw the other company’s construction men working at.  I think if it were me, I would have rented one of those bad boy mini excavators and did the job in 1 day with just 1 guy doing the job (or maybe two days at the max).

Now I understand that planning and a little bit of research can you find the tools to make a job smoother, better looking, and less labor intensive!

I guess my stories could be summarized as “look before you leap”, meaning get the right tool for the job before you start the job!

Best,

Don

 

Is The New York Government Extortionists?

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Asking the question “Is The New York Government Extortionists” actually saddens me quite a bit.

Here is the problem, the New York Attorney General is displaying bullying like behavior, and actually stands to benefit financially by going after financial firms.  Now if a company is crooked, I say go for it, but I’ve seen them go after quite a few companies that were innocent and even stalwarts in the financial industry, and any reasonable person with common sense would be able to see that their lawsuits don’t make sense.

Let’s take their most recent lawsuit against JPMorgan…  JPMorgan (which is one of the few companies that really didn’t need to take a bailout and runs a pretty tight ship overall, excluding the London whale fluke) was a savior during the “Great Recession”, taking a bailout that it didn’t need, and acquiring obviously toxic assets (from Bears and Sterns) to save the economy.  They weren’t bottom feeding, the were acting in the best interest of American and doing their part to save the country!  The government came to them (since the government realized that JPMorgan was solid) and asked JPMorgan to basically help save the economy, which JPMorgan did (actually the original JP Morgan has a history of saving the country, check out this article: Panic of 1907: J.P. Morgan Saves the Day).

So basically, JPMorgan was a critical element that help divert a financial systemic collapse of the economy!  They took the broken company Bears and Stern, and basically worked on fixing the problem with that company, and at a loss to boot!

Now the New York Government, who by all accounts should know that the Bears and Stern executives aren’t managing the toxic assets anymore, and obviously have to know that JPMorgan company is like a hero to the country, are attacking the saviors, one of the saviors of the “Great Recession”!

To me, it looks like such a government offices are crooked and acting like extortionist!  Perhaps honor really is dead, at least in the New York government system?  To me they seem cold and unappreciative!  To use an analogy, it’s like a person starving, ready to die, JPMorgan (Jaime Dimon) give that person food and shelter, then that person (much like New York) assaults and robs their house!

I have to admit, it really makes me question the intelligence and logic of the government in New York.  I wonder if they don’t understand that the executives that ran Bears and Sterns was the problem, not the JPMorgan management team?  Shoot, I even wonder if they are rational humans?  They sure don’t appear to be on the surface.

Jaime Dimon and JPMorgan didn’t have to pick up the Bears and Stern’s toxic assets!  And after such an attack said he probably wouldn’t do so in the future if the government asked him to do it again!  Read his full comments here: JPMorgan’s Dimon hits back at government over Bear Stearns suit!

Mr. Dimon, having foresight even back then, said the following to those government folks asking him to buy the poisonous Bears and Stern’s assets:

Dimon went on to recount how he warned a senior regulator at the time of the deal to “please take into consideration when you want to come after us down the road for something that Bear Stearns did, that JPMorgan was asked to do this by the federal government.”

He added that JPMorgan, which will report its third-quarter earnings on Friday, will come out fine in the end. But if he is ever put in a similar position again, he said he “wouldn’t do it.”

“I’m a big boy. I’ll survive,” he said. “But I think the government should think twice before they punish business every single time things go wrong.”

To me, this is just another way the government is taking money from the shareholders and putting it in their own coffers.  I honestly think that it’s an invisible tax or a form of extortion!  I say extortion because most companies settle out of court because it’s cheaper that way.

What do you think?  Isn’t it unjust when a government attacks companies because they know that the can extort money out of them in the form of a settlement?  Please tell me if I’m missing something about JPMorgan?

Don