Archives For economics

The Congressional Budget Office projected increases in the national debt and sustained federal budget deficits. The U.S. government will spend $1 trillion more than it collects in 2020 and deficits will reach or exceed that threshold every year for the foreseeable future.

The Wall Street Journal, Wednesday, January 28, 2020

What will it be? Which news item on what day will be the straw that breaks the back of the stock market camel? That news always comes when you least expect it and pops the current bubble and destroys your gain.

It seems to me that a one trillion dollar annual deficit should satisfy whatever conditions need to be met to crash the market. I’m told that the market mainly rides on a wave of investor confidence that carries us along week after week, year after year, until it doesn’t any more. I can tell you that my confidence gets pretty shaky at the prospect of adding a trillion to the national debt every year. Then there’s the impeachment and election year uncertainty. The likelihood of higher taxes. The specter of Russian hacking. And of course, the Middle East. Getting nervous.

M&A

06/13/2018 — Leave a comment

My first grown-up job out of the Army was to work as a researcher for a mergers & acquisitions (M&A) consulting firm based in McLean (home to the CIA), Virginia. Our clients were large New York and American Stock Exchange, publicly-listed companies bent on growing their earnings bases by acquiring other companies. My job was to identify every business, usually in the USA, that fit the ideal prospect profile—usually $10-20 million in sales with strong profitability and growth prospects—call their presidents, and ask them all sorts of nosey questions about their financials on behalf of a client I couldn’t name. After a while, I actually got good at this. My work product was a “one-page report” that usually went to 4-6 pages and provided basic info that our “closer” could take to the client and try to arrange a “first meeting.” Our compensation consisted almost entirely of closing bonuses we recevied when a deal we started actually happened. My pay consisted of a monthly check for about $350 plus these bonuses. In four-and-a-half years I got two, totally about $15,000. I was rich.

NOTE: $10-20 million in sales equates to maybe ten times that now. My tools were a telephone, a yellow pad and pen, and the Dunn & Bradstreet directories, and I spent abot 40 hours a week dialing for dollars. I would turn over my draft reports to a typist, and off we went toward a first meeting.

These days, I take special interest in news about anticipated and actual mergers and acquisition such as the merger of AT&T and Time Warner. These cause me no particular concern, in contrast to many commentators who seem to see it as their mission to right the wrongs of business concentration and the formation of behemoth companies bent on taking over their markets. Wouldn’t any business owner do just the same given the chance?

globalization

09/05/2016 — Leave a comment

Get with it. Globalization is good for you. Well, most of the time.

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