Craziest Campaign Speech of the Year - Phil Davison

Wow, I had to post this transcript I made of Phil Davison's words to the Executive Committee, and infamously to the rest of us through video.  What a crazy speech that was.  It was like watching Matt Foley turned Treasurer Candidate from his normal role as a motivational speaker...in other words, like watching a train wreck.  But it makes for some good entertainment now, thanks to YouTube!  If only Chris Farley were still around to have seen it.

If you've yet to see it, click the YouTube link (the article title), and follow along in the text.

Phil Davison's words on September 8th, 2010:

Ladies and gentlemen,
of the Star County Republican Party Executive Committee,
good evening,

And thank you,
not only for your attendance,
but for allowing me the opportunity to speak.

My name is Phil Davison,
and I am seeking our party's nomination,
for the position of Star County Treasurer,
on November 10th...November of 2010 excuse me.

In terms of my background,
I am from the village of Minerva,
where I am serving my 13th year of elected service,
as a Minerva council member.

In terms of education,
I have a bachelors degree in sociology,
a bachelors degree in history,
a masters degree in public administration,
and a masters degree in communication.

In terms of elections across Star County,
I have represented our party twice on the county ballot,
in both the primary and the general elections,
when I ran for Star County Clerk of Courts in 1996,
and Star County Commissioner in 2000,
and I will not apologize for my tone tonight.

I have been a Republican in times good,
and I have been a Republican in times bad.

Albert Einstein issued one of my most favorite quotes,
in the history of the spoken word,
And it is as follows:

In the middle of opportunity...oh...excuse me...
"in the middle of difficulty lies opportunity..."
I'm going to repeat that so I have clarity tonight:
"in the middle of difficulty lies opportunity."

This is the opportunity we've been waiting for,
The Star County Treasurers Office is a mess,
It is in dire need of structure and guidance
And now is the time to seize this opportunity,

With an aggressive campaign,
and an even more aggressive campaigner.
If nominated tonight I promise each and every person in this room,
I will hit the ground running,
come out swinging, and end up winning!

Let's send the message tonight
To the people of Star County,
and to the people of the Star County Democratic Party,
We're tired of business as usual.

Drastic times require what?...
Drastic measures! YES! Who said that??
Thank YOU!
Drastic times require drastic measures!

We will not tolerate incompetence,
and irresponsibility any longer,
Now is the time to snap
the democratic stranglehold on the treasurers office. ?

And I hearken back to what my friend Alex just said.
He ran against the Treasurer in 1996,
It was a problem then,
Its a problem now.

Infestation

Politics is not touch football,
Politics is winner take all.
It always has been,
And it always will be.

If nominated tonight, I want to develop and expand my campaign,
For what I believe is the greatest strength of the Star County Republican Party,
and that is its people.

I believe, in the axiom,
That all politics is local.
And because of this belief,
I want to harness the thoughts and ideas,
That individuals in our party have.

Concerning Star County and its political subdivisions...
and use that to its fullest extent.
Knowledge is power.

Lets tap into this knowledge,
and use it as a tool to win the Treasure's Office.
Lets use this knowledge not only as a tool,
but as a weapon.

We must win this election,
If nominated tonight I will win this election,
And I'm going to say that again so there is no miscommunication tonight,
If nominated tonight I WIN!

Tell your Friends
Tell your neighbors,
Tell Randy Gonzalez,
I'm coming, both barrels, guns loaded.

I believe in the entities in the principles,
of the National Republican Party,
The State of Ohio Republican Party,
And the Star County Republican Party.

And if nominated I will not hide those beliefs,
On my march to victory on election day.
If nominated today I can guarantee with 100% certainty,
that what you are seeing from me tonight,
Is what everyone else outside those doors is going to get over the next eight weeks.

I used to be an idealistic figure,
I am now a pragmatic figure.
Government may be about service,
politics is about winning.

Tonight as a candidate, seeking the Republican nomination for the position of Star

County Treasurer, I humbly ask for your vote as members of the Star County Republican

Party Executive Committee.

Thank you!

Java Wars: The 20 Year Saga

James Gosling

         On April 12, 2010, the father of the Java Programming Language, James Gosling resigned from his position as the Chief of Technology at Oracle, citing his reasoning as “just about anything I could say that would be accurate and honest would do more harm than good” (Time To Move On). Oracle had recently completed its acquisition of Sun Microsystems where Gosling had worked as the creator of Java for over twenty years. Why was the creator of one of the most important computing technologies of the last thirty years leaving his post at such a critical time for the technology, a technology even Larry Ellison, founder and CEO of Oracle, heralded as “the most important software that we have ever acquired”? (Mr. Ellison Helps Himself)
         Gosling’s departure is sure add increased pressure to its growth and affect the direction Java moves in the next few years. Java has recently been transitioning from a “server side” technology to become increasingly viable as a “client side” technology (The Future of Java).  Part of that transition is due to Google’s usage of the Java technology to drive its Android phone platform.  As the pressure increases, the Java of today will become much different tomorrow, for better or for worse.  Why does the future of Java matter?  If history is any indication, the direction Java takes will forecast where computing technology as a whole will end up.
          

Java Logo

     Java was derived from the powerful computing languages of C and C++, known generally as Object Oriented Programming Languages or OOPLs. Gosling felt that OOPL programmers could benefit from getting rid of painful programming procedures 
of the other two languages, as well as introducing a fast Virtual Machine to compile the code and create increased interoperability.  This started the intellectual warfare between C++ boosters and Java junkies that still rages on today (The JVM Spec). Yet Java is so widely used, it can be found powering everything from DVR machines to DVD players, to computer applications and cell phones, to some of the most advanced high-transaction server farms, datacenters, and web servers. The control and advancement of such an important technology platform as Java, the training and needs of its programmers, and the applications built on the platform, should bring Larry Ellison household recognition that rivals that of Bill Gates or Steve Jobs; or will Google’s Eric Schmidt cloud out Larry Ellison’s eclipse of Sun?

Eric Schmidt

          In 1983, Eric Schmidt joined none other than Sun Microsystems, at nearly the same time as Java author James Gosling. From the beginnings, Sun was setting up to be at the forefront of technological change and importance, a position they would hold for almost three decades. Schmidt’s first role at Sun was that of a software manager and would later work with Gosling on Java. Gosling was assigned, among many other things, to development projects such as the WYSIWYG editor (What-You-See-Is-What-You-Get) that kicked off desktop publishing, a software platform called NeWS that was implemented in the early Macintosh systems to rival Windows. In the early 1990’s, he worked on the Oak programming language (The JVM Spec), and when Oak failed to gain much traction by 1995, Gosling and others at Sun decided to rewrite Oak as an Internet technology. When they introduced the rewritten platform as Java, it caught on like wildfire. At the end of its debut year in 1995, it had been licensed by almost every major corporation, including IBM, Oracle, and Microsoft. Gosling was an overnight success story, and in 1995 Schmidt and Gosling were put in charge of pushing Java into the mainstream and overseeing its development. In one short year, Java had revolutionized computing by allowing software to be developed and run on any computer on the Internet (Kilbane, Doris).

Cross Platform Logo

        

     Before the cross-platform capabilities of Java were introduced, software had to be developed in consideration to the operating system it would run on. However, in an increasingly networked world, this fact was becoming extremely burdensome for many computers trying to communicate yet running different operating systems. With Java, websites could deliver content in less development time and without specialized programming in relation to the operating system of the computer accessing the site. Before long, programmers everywhere were developing applets, applications, and websites that could freely run on any system imaginable, especially on Apple and Microsoft machines. Among the first major applications to spring from the Java frenzy was the Netscape Navigator web browser that quickly became the de-facto browser for the net. Interestingly, the Netscape Navigator software was the central reason the US Department of Justice began the antitrust case against Microsoft. Therefore, Java was at the very root of the largest antitrust case in US history that once again demonstrated the surprising power it now held over Silicon Valley, the newly founded Information Age, and Microsoft.
        Microsoft was an early adopter of the Java technology. Yet almost immediately, the behemoth was internally troubled by the idea that its flagship product –Windows– could be pre-empted by software written in Java. Software could now be independent of the Windows Operating System, and better internet browsing could be done on a Java based browser. As Microsoft began to demand more input on the specifications for the Java language, it also began rewriting parts of it for their own language called J++, marking the first time an attempt was made to fragment Java. Lawsuits began to fly, further evidencing just how important Java had become. Whoever controlled it would gain major market share in the Internet space, whether it be servers, browsers, or applet support for the millions of websites that were being created. And Microsoft wanted just that.
         Sun was well aware that Microsoft coveted their Java platform, shown by Gosling’s disdainful testimony in court against Microsoft, saying “I just don't trust them. The planet is littered with companies that did deals with Microsoft expecting to win big but ended up getting totally screwed,” and proposing  further that the Microsoft rewrite of Java was “…analogous to adding to the English language words and phrases that cannot be understood by anyone else" (Leaders of the Information Age). 

Bill Gates

         Microsoft, and their patriarch Bill Gates, had very little ground for a counter-argument. In fact, in a parallel case to that of Sun vs.    Microsoft, the prosecutor in the People vs. Microsoft case uncovered evidence that Gates had written an email to another Microsoft executive with the scheming words of “…how do we wrest control of Java away from Sun?” (Videotaped Disposition 69) To which Gates affirmed, reluctantly under oath, that he had discussed the issue with others in the company through email. Microsoft’s solution to the suits in part was to simply write their own Java language, known as C#, which is part of the .NET platform and represents the first official and highly successful rewrite of Java, though the naysayer will claim that C# was not a rewrite.  If it wasn’t, whatever happened to J++?  Many also argued that Java would now be doomed, since the .NET platform would surely spread everywhere Windows went.
         However, Java and its developers were resilient and were not about to let Java disappear into the catacombs of computer science; continuing to fight for its success –they very well changed the course of the 1990s, and they would very well change the course of the 2000s. Eric Schmidt, who had manned the post of CTO at Sun from 1995 to 1998, and helped lead the expansion of Java into prominence, soon left to work for Novell as their CEO. Novell was like a bright pulsar in business terms, entering into the game with huge amounts of flair and potentially groundbreaking technologies. Their mainstay was producing software for networks, which at the time, wasn’t normally built into an Operating System. But like any typical pulsar, Novell’s business was rapidly fading. Schmidt was determined that he could right the ship and save the company, and use a major network software component – Java – to do so.
          Fortunately for many of us today, the plan didn’t go as Schmidt had planned, and customers were still wary of purchasing products from Novell. Moreover, when the roaring economy of the nineties was about to become terminal in 2000, Schmidt decided to leave for greener pastures.

Google Logo

          Mountain View, California is lushly green in foliage and money, and it was there in 1996 that Sergey Brin and Larry Page were coding up a revolution for the Internet that no one saw coming. As their new technology continued to prove promising in test labs and small releases at Stanford University, its popularity flourished rapidly. By the year 2000, Google was its own company and was becoming a key player in the search engine role, and expanding daily. Brin and Page tapped Schmidt to take over as the CEO of Google in 2001, who brought along with him the personal networks and relations to the people at Sun Microsystems, especially the people working on Java (Current Biography).
         The resurgence of Java in the early part of the last decade can arguably be attributed to its adoption by Google. While it is hard to affix a date or exact time that Google decided to use Java as one of its core technologies, there can’t be much doubt that Schmidt’s move to Google in 2001 had a lot to do with it becoming central to their operations. We also know that Google played a major role in advancing Java to the popular Java 5 release in 2005, when it already powered most of their platforms and APIs (Application Programming Interfaces) during which time Google had also become the world’s dominant search engine. Responding to Robert Eckstein’s question “How does Google use Java technology”, Google Software Engineer Li Moore explained that “Google makes extensive use of the Java platform. Large parts of popular Google products are written in Java. We also use Java in many internal systems and products under development” (Sun Talks With Li).
          Through Google’s continual use of Java for internal development which pushed the language to new frontiers, developers of non-Google and non-web related platforms also stood to benefit from the advancements being added to the language, such as JavaFX, enumerations, and other key features that had been requested seemingly since its release in 1995. This, along with the later Java 6 release, helped to buoy the attractiveness of the Java platform for nearly the entire last decade, and only recently was it surpassed in search engine popularity by the C language (‘Rudderless Java’). Some will say that is an indication that Java is beginning to lose relevance; yet, it would seem otherwise with a broader viewpoint that C is the base of the language used to program for the iPhone, a language Apple calls Objective-C, which naturally would drive its popularity in search engines as developers look to create apps for the exploding iPhone app market. Nevertheless, Java is close behind and will retake the top spot as the Android platform races to overtake the iPhone platform’s popularity – unless war ensues.

Larry Ellison

          Since its reinvention as a core programming language in 1995, Oracle has been another key player in the Java story. The company founded by Larry Ellison, and one that thrives on acquisitions, has subtly made Ellison and his investors tens of billions of dollars in wealth. Their main customers are mid-to-large size businesses in need of database architectures and powerful business software such as PeopleSoft. Since Java has always been a major player in the world of business and enterprise programming, Oracle’s support of the language makes quite a bit of sense. Beyond pure Internet technology, one of Java’s main usages in businesses is running enterprise applications on remote servers, and serving up the data from those applications to client computers. By supporting Java, Oracle has banked on the idea that Java programmers would use the powerful Oracle DB (database) platform which their Java code could access and use seamlessly (Interview With Dan McDonald).
          That mission for seamless integration of Oracle DB with Java has largely paid off, with only the MySQL database platform as a rival in implementation with Java. Additionally, Oracle has made their database platform fully programmable using Java, making it the only database system to use an object oriented language in conjunction with SQL. Database administrators and programmers normally have to rely purely on SQL (the end-all of database scripting languages) to write to and access the database information, and a modified version of procedural languages such as C to program stored procedures and operations for the database (Interview With Dan McDonald). This is usually very tedious and is prone to human errors since there are few ways to debug the code and the language itself is limited. Implementing an OOPL like Java creates powerful opportunities for data warehousing and applications administration; which is what Oracle wants.

Oracle Logo

         Being a software conglomerate like Google, Microsoft, and Apple, Oracle rules the business space in many aspects, and seems to be constantly driven by acquisition and seeking a bigger share of the business computing arena. Since a massive portion of the business enterprise software and internal applications in the world use Java, having control over the language gives Oracle some leverage to wield more power over business operations that have been programmed in Java into specific directions. Having exposure like that to business needs has definitely got to have significant value, not necessarily monetary value, rather value in creating vertical market share for Oracle’s other open source and proprietary products. Don’t imagine for any small amount of time that companies like Microsoft weren’t completely blindsided by the thought of a powerhouse such as Oracle garnering that type of command through Java. “I am very surprised. I have to think about it,” was all Microsoft CEO Steve Ballmer could say about the Oracle announcement in April of 2009 (Mr. Ellison Helps Himself). Such a short, fragmented statement by one of the industry’s sharpest corporate leaders shows he must have been pale-faced when he said it. What was Oracle positioning for? The next software empire? Some sort of software federation with Google to double team Microsoft and its virtual fortress?
          The answer to both questions is yes. In an interview with Dan McDonald from the Eccles School of Business on the future of Java, he explained that “Oracle has a much better track record [than Sun] at actually creating usable products in Java.  So, while they may not be as good of a language steward from the theoretical standpoint, Oracle may just produce a more functional result” (Interview With Dan McDonald). Many businesses that develop applications in Java do so independently and for the most part in-house. If Oracle can start developing software applications for businesses that are both distributed and customized for customers using their own development teams at Oracle, they will gain a huge advantage in the business software space. So is Oracle going to make office software for client release to compete with MS? No, because the movement of software is toward what they call “the cloud”. Cloud computing is the idea that everything should be stored and run through the Internet by accessing remote servers in co-located and clustered server farms. The advantages to this are long uptimes, centralized maintenance, and defense against disasters and crippling data loss to business operations. This is something that Java should excel at, since it is mainly a server-side platform.

Cloud Computing

          The antagonist would argue that cloud computing requires huge investments in server infrastructure, and not just software languages and platforms like Solaris, Java, and MySQL. Recall, nonetheless, that Sun Microsystems was mainly a hardware company, selling server clusters and powerful mainframe computing systems, and also hosting them in server farms, as their core business. Those assets and technologies are all on Oracle’s books now. Furthermore, Oracle is expanding their data center space beyond what they inherited from Sun, which is a key component to growing a cloud based business model. In an article announcing the resumed construction on their extensive data center project in the greater Salt Lake City area, industry analyst Ray Wang forecasted “A good amount of everything new [at Oracle] is going to go in that direction…It wouldn't be inconceivable to see 50 percent of Oracle's business in the cloud by 2014." (Kanaracus, Chris)
          And why wouldn’t they? With Google applications as an exception, Java hasn’t been used as much for cloud computing applications like email, web documents, Twitter, etc. This has mostly been left to JavaScript (which has no relation to Java at all), PHP, Ruby on Rails, Python, and other similar languages. Oracle will want to change that by moving in on the cloud computing space with Java as a key component, just like Google has done. As Oracle positions Java to lead the cloud movement of software, what will happen to all of those legacy cloud applications written in JavaScript and the like? The good news for those applications is that Google and other Java proponents have already made it possible to write code in Java, and have the JVM create perfectly accurate JavaScript. The creators of cloud applications who want to move into Java once it is optimized for cloud computing will not have a hard time doing so, meaning programmers who know and develop in Java will be able to move right in to those development teams, only increase the momentum of Java’s adaptation into cloud computing (Schalk, Chris).

Android Logo

         The one thing that could impact that momentum would be a severance of ties between the major backers of Java. Fragmentation of the Java Platform is a real possibility for a few specific reasons. The Dalvik VM developed by Google for Android is yet to be accepted by the Java community –under the control of Sun –as real Java. If Google continues to develop new technologies into their platform, those features will not necessarily be adapted into Java, and vice versa. In software, this tends to create issues where the diversions between the branched code are too wide to merge back together, causing a fork in the code. Google prepared for this scenario, evidenced by recent complaints from them that Java has not advanced fast enough under Sun, and by sponsoring their own adaptations of the platform. Oracle also has not been forthcoming enough about their direction and plans for Java, which leaves many who rely on the platform nervous about its prospects. If Google forks the code, an epic exodus of programming minds and skills would ensue, leaving Java devoid of the needed ingenuity to keep it relevant.
         Some within Google insist this will not happen, and that in fact Oracle will be a better company for Java than Sun was. Google’s Chief Java Architect, Josh Bloch, made the diagnosis that “The king is not dead. The king is alive and well. He has a slight cold" (‘Rudderless’ Java). Even still, Loch conceded that a fork in Java is not unlikely if a shift in direction is not made soon; a shift in Google’s favor and to their demands. Will the strange bedfellows of Google and Oracle join together, with Google expanding Java within the mobile space, and Oracle expanding Java in the business services space, and both of them working in parallel on cloud services? Or will the allies turn on each other now that the diplomatic mediator and near hippie-like philosophic viewpoints of Sun are gone?

Java Sandbox

         We should hope that they both get along in the sandbox. A union or pact between the two would fuel the next decade of information technology and keep Microsoft in check. The advancements that would occur and the relentless storm of cloud based software that would arise would revolutionize our connected world many times over. Tools once relegated to desktops and mainframe systems would become feasible for use on mobile devices as Java drives the communication between them and the supercomputer-like cloud servers. Business or government executives would be able to access a myriad of organizational data on the fly. There is no telling where Java’s momentum could carry it, or how many other big players would join in its development even if it means jettisoning support of other languages. But no matter what happens, whether Java becomes an a-la-carte mixture more like a mocha or a latte than a straight coffee, Java will find a way to continue on. HP’s Vijay Seetharaman touted that “Java will remain a dominant platform in the enterprise space" (‘Rudderless’ Java), meaning the “king” of computer programming languages will continue to drive business as it has for a decade and a half. Indeed with a new fusion of brilliance, and with Sun gone the way of the Death Star, the world could be made to revolve around Java.

Works Cited
Eaddy, Marc. Dr. Dobbs Journal: C# Versus Java (2001): 1-13. Print.
Eckel, Bruce. Thinking in Java. Upper Saddle River, NJ: Prentice Hall, 2006. Print.
Eckstein, Robert. "Sun Microsystems Talks With Li Moore of Google." Developer Resources for Java Technology. Web. 23 July 2010. .
Gosling, James. "Time to Move On... : On a New Road." Time to Move On. 12 Apr. 2010. Web. 27 June 2010. .
The H. W. Wilson Company. "Schmidt, Eric." Current Biography (2008): 1. Biorgraphy Reference Bank Select Edition. Web.
How The JVM Spec Came to Be. Prod. InfoQ. Perf. James Gosling. How The JVM Spec Came To Be. 28 Oct. 2008. Web. 27 June 2010. .
"Interview With Dan McDonald." E-mail interview. 6 July 2010.
Jackson, Joab. "Google Exec Worries Over 'rudderless' Java - PCWorld Business Center." Reviews and News on Tech Products, Software and Downloads - PCWorld. Web. 23 July 2010. .
Kanaracus, Chris. "Oracle Resumes Construction of Massive Data Center - PCWorld Business Center." Reviews and News on Tech Products, Software and Downloads - PCWorld. Web. 23 July 2010. .
Kilbane, Doris. "From Sneaking Into Computer Labs To Sneaking Out Java." Electronic Design: 49. Academic Search Premeir. Web. 25 June 2010.
The H. W. Wilson Company. "Gosling, James." Leaders of the Information Age (2004). Biorgraphy Reference Bank Select Edition. Web.
Lyons, Daniel. "Java in jeopardy." Forbes 163.1 (1999): 110-111. Academic Search Premier. EBSCO. Web. 19 June 2010.
"Mr Ellison helps himself." Economist 390.8628 (2009): 65-66. Academic Search Premier. EBSCO. Web. 19 June 2010.
Niemeyer, Patrick, and Jonathan Knudsen. Learning Java. Sebastopol, CA: O'Reilly, 2005. Print.
Ricadela, Aaron. "Sun Mulls Deeper Open-Source Dive." BusinessWeek Online (2007): 1. Academic Search Premier. EBSCO. Web. 19 June 2010.
Schalk, Chris. "A Java Developer's Guide to Google Technologies - Google Code Help." Google Code. May 2007. Web. 20 July 2010. .
Tennant, Don. "Q&A: McNealy Defends Sun Reliability, Personal Privacy Views - Computerworld." Computerworld - IT News, Features, Blogs, Tech Reviews, Career Advice. Web. 9 July 2010. .
"The future of Java." eWeek 25.33 (2008): 27-30. Academic Search Premier. EBSCO. Web. 19 June 2010
US Department of Justice. "Videotaped Deposition Excerpts of Bill Gates." Welcome to the United States Department of Justice. Web. 2 July 2010. .

All,

Take a look at this article published today by Jim Cramer.  Although he's a democrat and was a supporter of Obama in the beginning, he has reversed course over the last year after viewing the destructive attitudes of the democrats (and some republicans who have gone along with them) in power.  Then read my comments after the article:

Cramer: Obamacare Will Topple the Market

Either the market doesn't care that the health care bill will pass -- and it will -- or it doesn't think that the proposal will cost that much -- something I think is nuts. Which brings us to a very tenuous crossroad: We have to wonder if this is one of those occasions, like in 2008, where the market doesn't see the coming catastrophe. Or perhaps the market sees any resolution as positive.

>>Here's Your Portfolio If Obama's Agenda Wins

I don't. I think when the health care bill passes -- and it will pass, I believe, because Nancy Pelosi has worked diligently behind the scenes to bend the anti-abortion foes, the key votes, to her will -- the president will get a second wind. That means the whole agenda -- cap-and-trade, Card Check for easier organizing (something that Wal-Mart's (WMT) inability to move even on its dividend boost tells you is coming) and amnesty for immigrants who are currently not citizens -- will quickly come to pass, perhaps even before the election. To pay for these items I see a dramatic increase in ordinary tax rates and perhaps capital gains and dividend tax rates in 2011 either reaching or exceeding those ordinary income rates as this current version of the Democratic Party believes that only rich people own stocks. (That's been a hallmark from Day 1 with this administration.)

Given those hurdles, which include a suicide pact with financial health for small businesses that obviously can't afford health care without risking the capital formation necessary, I think you have to put the double-dip recession back on the table.

Those who have read me here and watch "Mad Money" know that I was out there early thinking that 2010 would not produce a double-dip, despite ample commentary that it would. But if health care reform passes, I am going to revise my thinking -- and you know I think it will -- especially because immigrant amnesty will cause the health care system to be overloaded and our taxes to soar.

The stakes seem so high while the market appears so complacent, perhaps because none of the levies will pass until 2011. To me that's around the corner. It's been slightly more than a year that I have been bullish. That's hanging by a thread this week.

Obamacare cuts that thread. Even if the market doesn't seem to know it.

At the time of publication, Cramer had no positions in the stocks mentioned.

I have had this sentiment for a while, and back in January began scaling down positions, moving to cash.  I will continue to do so ahead of this vote, especially with the Dow now sitting at 10,700.  This seems like a good level to take some money of the table and wait to see what congress decides to do.

My dad recently asked me what direction the market might be going, and to be honest, I don't know any big professionals that I read who have much to say on it right now either.  That being said, while it is hard to get any direction in most sectors of the economy as we await the decision in DC, I think one sector that will do well regardless of what happens is the energy sector.  So if you still want to have some money in play, I would think investing in mutual funds, ETFs, or stocks in the energy sector might be a good idea.  In my view, if Obama wins and gets health care, he'll probably get Cap and Trade, which will make energy stocks go up.  If he loses, energy should still go up because the economy should improve. 

And anyway, Energy stocks, especially those with direct holdings in the commodity, gain value the longer the Fed keeps the interest rate depressed.  As well, OPEC is not backing down on supply restraints, so oil should hold up and increase in price as demand continues to increase, and production continues to fall.  One big player in the price right now is the drilling failure rate which is up dramatically over the last year.  That makes oil more expensive to produce, making the future price go up, meaning if you hold a share in the actual fields producing oil the value of that oil in the field increases.

My favorite energy stocks right now are Royalty Trusts and Master Limited Partnerships, or basically anything with either direct holdings in oil or gas reserves or companies that own the pipelines for distributing it.  Royalty Trusts and MLPs also pay very nice returns that have tax benefits, so their values hold up better even if the market moves against you.  Right now some RTs are distributing about 1% per month (12% annually) which is a great return.

Mutual funds and ETFs in this sector are also a good idea, just be sure they have exposure to natural gas and good oil companies like Devon Energy, Enbridge, and MLPs and RTs as part of their overall holdings.

Good luck out there.  And don't wait for Obama to mess things up market wise.  Right now the markets are showing no true direction and that is always a good time for some profit taking regardless of your overall market sentiment.  But as I said, a lot of the pros are becoming worried there might be a pullback, or worse, a double dip recession.  And cash is always nice to have to buy the dip when it happens.

Tijs Limburg


Blogs:
http://phystrings.blogspot.com/
http://getoutofthedark.blogspot.com/

Ben Bernanke Named Time Magazine Person of The Year

Ben Bernanke has been named as the Time Magazine person of the year.  And I have to agree wholeheartedly with this nomination!  After reading the article, I found once again that I am much in line with the way he thinks about economic policy and disaster mitigation in the wake of the biggest economic crisis in 75 years.  He was the man for the moment.

 

Here is the article: http://www.time.com/time/specials/packages/article/0,28804,1946375_1947251_1947520-1,00.html

 

While I take issue with much of Keynesian economic policy, which is where my persuasions differ from those of Bernanke’s, I have long considered the actions of the Fed over the past year as absolutely necessary, though troubling and unprecedented.  I had always been taught that the biggest factor in the Great Depression was inaction and massive blunders by the Federal Reserve. 

 

Recently, there has been a lot of Fed bashing, and craziness, even from pundits like Glenn Beck, all slandering the Fed as some kind of money-printing-inflation-happy-mind-trust.  But let’s remember how absolutely reluctant Bernanke’s Fed was to take action in the first place.  It doesn’t seem like the about-face actions of the recent Fed could all be part of some planned conspiracy to doom the economy or be some sort of power-grab for the greedy like Ron Paul would have us all believe.  Wall Street enthusiasts like Jim Cramer were crying foul and screaming at the top of their lungs that Bernanke’s inflation worries and tentative, hands-off policies were causing massive problems before the bog meltdown in 2008.  Bernanke stood by, almost to his own undoing and disaster, because he obviously believes more in hands-off policy than that of Keynesian ways.  But when it was inevitable that action be taken, he took it and dramatically changed the landscape of the financial world.

 

Since the disaster started in 2008, I have thought of the collapse and ensuing ‘bailouts’ as being similar to a fire.  Why do cities and communities pay for a fire brigade using tax revenue?  Why isn’t it corporations, such as insurance firms, that use their revenues to fund the fire brigade as part of your insurance policy?  I’ve come to a plain conclusion that city governments know what their assets are: property.  That is a large source of their revenues.  They can tax the properties, they can tax the businesses that operate on those properties, they can tax things that are stored on those properties, and they can tax the individuals that live in those properties. Indeed, it is property that is the most important asset to a city’s revenue stream. 

 

Recall the great fire disaster of the Chicago Fire of 1871.  34 city blocks, or more than 2,000 acres encompassing some 17,500 buildings and $222 million in property – one third of the city’s valuation, were destroyed by a fire that started in a small wood shed on a small alley in the city.  The city made fatal errors in not responding soon enough, and lost a substantial amount of its assets, and the ensuing revenue streams.

 

Where are most of our assets as Americans?  Housed in financial institutions.  Securities, bonds, cash reserve, mortgages and titles, insurance policies, loans, etc., are all housed in these firms.  Why, when one of them catches fire financially, would we not use taxpayer funds to send the fire brigade and put out the financial fire just like we do with real fires?  Would we really want to cling to a wait-and-see policy and allow ’34 blocks’ of financial institutions that hold our hard earned assets to burn to the ground?  Interestingly, that number above, the one third of Chicago’s value, is similar to the number of banks that were allowed to fail in the Great Depression – one third.

 

While it is still early, and hard to tell where the crisis will end, everyone on this email list still has a job, and has not had to endure bread lines and bank runs to the extent that they were endured in the 30s.  As 2009 comes to a close, a year who’s beginning was laden with fear, I for one am very grateful for that fact.  And I can’t help but think that Bernanke’s academic preparation and professional action had a lot to do with it.

 

TIJS LIMBURG
tijs.limburg@3-form.com
Associate Software Developer
3-FORM.COM
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Salt Lake City, Utah 84119
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Health Care Rights

In response to this Forbes article, I sent the following to Senator Hatch and will also send a similar letter to each of my other representatives, and hope you will do the same.

 

http://finance.yahoo.com/insurance/article/107408/5-freedoms-you-would-lose-in-health-care-reform.html?mod=insurance-health

 

 

To The Honorable Senator Orrin Hatch,

 

Firstly, thank you for taking time to read this letter.  I believe it to be one of the most important aspects of the American life to be able to be represented and give our trust to those we elect to make the proper decisions in our behalf.  However, at times I believe it is also important that the representatives ensure that when their constituents cry out loudly for or against something, even if they believe differently, that they vote in a way to represent the majority of their constituents.

 

Senator, you have served our great State respectively, and I am proud of the freedoms we enjoy in Utah.  As a 25 year old working class citizen who is also attending schooling at the University of Utah and working a full time job as a software developer, I am very concerned about the health care issue.

I strongly believe and advocate that health care issues such as those being debated in Washington should really be left up to the individual States to be decided, and should not be mandated federally.  If a State decides that they want a Universal Health Care program, such as Massachusetts did, they should be able to decide within their State whether that is right for their population.  But other States should have the option of electing to keep things as they are if they like.  No one population is the same, and trying to govern in such ways when it comes to health care I believe is highly inefficient, and will prove to be dysfunctional.  As always, the larger populations will win out against the smaller ones, and we will be forced to follow policies which for example may be necessary for larger, highly urbanized populations, but are not necessary for us.

 

And as you know, the Senate was instituted for that reason.  To protect the interests of the smaller States and give them an equal voice to the larger States in a governing entity. 

 

Utahns are self-reliant.  We understand the need for employment, good health care, participating in the system of government, and being good citizens.  We have different healthcare needs than Californians, New Yorkers, and others.  We should be able to set our own policies within our State on how we want Health Care to operate.  For instance, we have a higher rate of birth here, and a younger population.  Therefore our Health Care policies should be reflective of that and our Insurers should be able to work their policies around those facts.  I fear that a nationalized, or Universal and federally mandated system like the one being proposed at the least would be either too general or too specific in how it goes about making laws regarding even just those two aspects of the Health Care system for Utah.

 

Please vote against  the health care plans being proposed in Congress, and tell them, as well as the President, that this is a State issue and that this debate should be sent to the 50 State legislatures to decide upon for their own populations.

 

Respectfully,

 

Tijs G. Limburg

 

 

 

TIJS LIMBURG
tijs.limburg@3-form.com
Associate Software Developer
3-FORM.COM
2300 South 2300 West
Salt Lake City, Utah 84119
T	801.994.8045
F	801.649.2699
C	801.680.6369
3form Technical Support 877.649.2670

I Just Scared Myself

 

You are now my nominee for Federal Reserve Board Chairman!  And you know a hell of a lot more than Barney Frank who proclaimed one year ago that Freddie and Fannie were in good shape.

 

I was just googleing myself to see if there are links to my Facebook artist page and found this review I had written a year ago on my Updown stock account.

Stock Pick by Tijs Limburg

FNM: Analyst Consensus: Sell (Short) Stock

Posted 366 days ago on 7/14/08

Market call:FNM will go DOWN
Target: $6.00 on 8/14/08
Current: $0.61 (-93.87% from time of market call)

 

Goldman Sachs analyst Daniel Zimmerman just announced this morning he expects the stock of Fannie Mae to drop about another 35%, and I highly disagree with all of those who are saying that a Fed "Financial Stimulus" will fix the stock. The only way the stock can benefit short term from the Fed in my mind is if the Fed were to buy out the company's shares. We have at least a few weeks before the Fed would take such action if necessary. Right now, the only thing that they can do is flood the company with cheap money at the discount window and help them raise capital through bonds. But we must remember that while that may help the company balance sheet, stocks are somewhat disconnected from the companies they represent. Right now, sentiment is very much against this stock -especially in the powerful and large investment firms- meaning that, short term, no one is going to start heavily buying this stock, meaning the short sellers are going to prevail. There is so much more money going into shorts right now that it would take large sums of money to get the stock to move against the pressure. Take for example Jim Rogers, who says he is keeping his short position open on this stock, and will sell more stock short with any run up in price. As the chairman of Rogers Holdings, I will take his word for it that he will put a lot of money behind that short position, especially with analysts saying the stock could see another 35% taken off. Any aid given to this company will take a while to get the money flowing again. An over-the-weekend bypass to the insolvent company will not immediately solve the problems. But don't get too greedy here, once you have a large gain, take it, especially if you start seeing declining short interest.

 

 

And after I had gotten bombarded with messages about how negative my analysis was, I posted this response on 7/14/2008.  Looking at this statement a year later with everything in perspective is kinda scary:

 

We're in a bear market, so get over it. It's only negative to the buyers because they're on the other side, buying the stocks everyone else is selling short. These financial companies, especially Fannie and Freddie, have been mismanaged for years and are finally getting what they deserve. The confidence in the financial sector has turned to the sellers. We are confident that the market will get worse for financial stocks. It's only July. Just wait till September and October roll around. People are already shifting their money to stronger banks, and dispursing money across multiple FDIC ensured accounts. That means there is actual fear (not media generated), and fear is what drives bear markets. We've already seen one bank fail...

 

I made a 93% gain to date on that call, but I wonder what Jim Rogers made…

 

Tijs Limburg

 

Re: Utah Tea Party CALL TO ACTION!

Joe, are you ready to join the State's rights movement? ;) 

I'll be there for sure.  The Patrick Henry Caucus is one of the most important developments since Roe v. Wade.  Many activist judges and progressive politicians will be put in their place as states supporting the caucus pass legislation to take back authority over non-interstate items.  To me, State power is one of the most important Constitutional rights and I believe it is the only way to keep the nation from further division and chaos.  Let's take this opportunity to remember what our nation stands for and what the name of our nation is: Not merely the USA, not merely the US, not just America, but the United States of America.

Tijs Limburg
Chairman and CTO of DMX - Digital Media eXceleron, Inc.
Get eXcited!
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Blogs:
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The "Don't Tread on Me" Flag: The First Navy Jack is enjoying renewed popularity these days thanks to an order from the Secretary of the Navy that directs all U.S. Navy ships to fly the First Navy Jack for the duration of the War on Terrorism.

On Tue, May 12, 2009 at 8:55 AM, Eric Limburg wrote:

See below...Looks like we know where we are having lunch on the 20th.  Those who can let's get together.  Hopefully I don't have to fly that day.

---------- Forwarded message ----------
From: Utah Tea Party <saltlaketeaparty@gmail.com>
Date: Sat, May 9, 2009 at 11:50 PM
Subject: Utah Tea Party CALL TO ACTION!
To: dmx311@gmail.com


CALL TO ACTION!

TEA PARTY RALLY WEDNESDAY 20 MAY 2009--12:00 NOON--UTAH STATE CAPITOL--WEST STAIRS (INSIDE, 2nd FLOOR)

Many of us in the Tea Party Movement (and MANY other groups) have spent countless hours speaking to our local representatives about States' Rights and now they are listening!

Utah legislators are forming "The Patrick Henry Caucus"  (Founding Members: Keith Grover, Chris Herrod, Stephen Sandstrom, Ken Sumsion, and Carl Wimmer) and are holding a press conference on Wednesday at 12:00 noon on the 20th of May 2009 at the State Capitol.  The Patrick Henry Caucus will focus on introducing legislation to take our States' Rights back.  Laws are being drafted now!  We will be celebrating this historic event with a TEA PARTY RALLY in support of this cause.

This may be the most important Tea Party Rally we will attend to date.  This is what we are fighting for; this is what we rallied for.  This is the first effort in what will be a long struggle to reign in the federal government.  Please come and stand with our Utah Legislators who are willing to take a stand for all of America.  This is how we take our country back to the principles it was founded on.

Bring your favorite (family friendly) States' Rights signs.  This is so important I secured the permit today!

Please see yesterday's Glenn Beck Video so you can see how important this rally is!

Part 1 of 2
http://www.youtube.com/watch?v=mV_Mlmamy70&eurl=http%3A%2F%2Flogisticsmonster.com%2F2009%2F05%2F03%2Fthe-montana-gun-law-you-will-never-hear-about%2F&feature=player_embedded

Part 2 of 2
http://www.youtube.com/watch?v=GHwPHvkrGrg&eurl=http%3A%2F%2Flogisticsmonster.com%2F2009%2F05%2F03%2Fthe-montana-gun-law-you-will-never-hear-about%2F&feature=player_embedded

THE TEA PARTIES ARE WORKING!

Please forward this to all your friends.  Have them sign up at saltlaketeaparty@gmail.com for further updates.

Thank you all so much!

David

David Kirkham
Utah Tea Party Organizer

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The Fed's Money Printing and Quantitative Easing

I've heard a lot of complaints over the spending bills, bailouts, etc. from the recent Tea Parties and most of it I agree with.  However, I disagree with the popular idea of Tea Party participants

that the Federal Reserve's Quantitative Easing policy is the problem - hardly so.  Quantitative Easing, or "Printing Money" in simplistic terms, is doing two things for the economy that investors and businessmen LOVE.  Just like a tax cut, QE reduces the interest rate, and thereby distributes wealth from the powerful banks and investment institutions to the businessmen and entrepreneurs.  Or should I put it differently as diverting wealth from the powerful banks and investment institutions and into the businesses they own. Lower interest thereby reduces the expenses on businesses and consumers.  It also reduces inflation - in the short term - by keeping prices moderated (businesses don't feel the need to increase prices when their expenses have been reduced), but at the same time stems deflation - which is absolutely the end all of economic disasters. 

You may wonder how QE policy can put the spending power in the hands of businesses rather than banks.  Steve will know the answer to this one.  Businesses and businessmen look at the interest rate as an opportunity cost standard for whether a business should simply earn interest on a bond investment, or whether they should make a capital investment and wait for a future return.  By reducing the interest rate (called "Printing Money"), the opportunity cost of capital investment is reduced, and the incentive to invest in a bond for future interest payments is reduced.  Therefore businesses would rather spend money upgrading.  It also has to do with present value of money.  By reducing the interest rate to zero as the Fed has done, the future value of money in nominal terms will be the same as the present value.  This is based on the equation Pv=S(1+r)N Where Pv is present value, S is the principle amount invested, n is the time in years, and r is the current interest rate.

Here's an example.  The value of 10,000 dollars in three years at a 5% interest rate is:

=10000((1+.05)^3)

=11600

So in 3 years at a 5% interest rate, the value of 10,000 is 11600.  So if your expected ROI on a 3 year investment is less than 11600, you should just put it in a bond at 5% and forget investing in capital.  Also, this means that if 10,000 is worth 11600 in 3 years, it will theoretically take 11,600 to buy something that was worth 10,000 in today's current money value.  But if the interest rate is closer to zero as it is now, 10,000 today is still 10,000 tomorrow, both in quantity and money value.  This theoretically gives enormous incentive for investment in capital goods.  And capital goods are the core drivers of our economy.

So this easing policy is much like a tax cut, but from the Fed rather than the government.  However, the government should also be reducing taxes and expenditures while the Fed does this over the long term.  Short term it may make sense for the government to spend more, since they can get cheaper bonds.  The problem is the government already had enormous debt BEFORE the crisis.  So spending any money they don't have is dangerous.

The only caveat to Quantitative Easing is that you have to be very good at judging when inflation is back to normal from zero, or when GDP is positive from negative.  If you don't time it right, inflation will be more than normal.  This is based on the Fed's money calculation MV=PQ.  Increases in GDP raise the PQ side, and therefore to remain proportional, the Fed needs to increase the money site proportionally.  V is a constant velocity of money, and P for prices in the economy normally should stay the same to avoid inflation.  However, if GDP (prices or quantity) are decreasing, the fed can theoretically increase MV to force an increase in PQ.  It is leaving the large amount of money on the table for too long that increases P too much, causing inflation.

Also, one has to take into account Gregory Mankiw's new theorem (Mankiw is a conservative economist at Harvard) that inflation is only a problem if it outpaces average raises in wages.  Think of this:  Businesses normally don't give raises based on performance.  They have bonuses and promotions for that.  Most raises are usually "in line" with or a bit above the interest rate.  This means from year to year, the average worker maintains the same buying power, while GDP increases the quantity of selection as more and better products and services enter the market.  This means that you have more to purchase tomorrow or next year with the same purchasing power (because the quantity of dollars available to you increased through a raise). 

Currently, raises (if your company hasn't suspended them yet) are still outpacing inflation, which is somewhere near zero, or even slightly negative.  Even if you got no raise, it is still in line with inflation since it is at zero. Once the economy recovers, most companies will give raises that are larger than normal to "make up" for the previous suspension, while hopefully the inflation rate stays below or around 4%, which will maintain a slight increase in purchasing power that we have been used to since Reagan. 

Maintaining a 4% or lower inflation is the trick the Fed has to ensure.

Check out Mankiw's blog: http://gregmankiw.blogspot.com/ or this other blog by James Hamilton http://www.econbrowser.com/archives/2009/03/quantitative_ea_1.html

Now I want your dissertations and dissentions!

Tijs Limburg
Chairman and CTO of DMX - Digital Media eXceleron, Inc.
Get eXcited!
www.dmxed.com

Blogs:
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http://getoutofthedark.blogspot.com/

The "Don't Tread on Me" Flag: The First Navy Jack is enjoying renewed popularity these days thanks to an order from the Secretary of the Navy that directs all U.S. Navy ships to fly the First Navy Jack for the duration of the War on Terrorism.