Monthly Archives: August 2011


It is fascinating theatre. The Washington discussion on the debt limit as well as the credit rating. I am amazed at the apparent intercession of the two in virtually all the political rhetoric. The sky is falling asserts the folks on the hill. If we don’t raise our credit card limit we will be cast downward by the rating agencies. Be serious, learn a bit of finance. The fact that we increase the credit limit on someone’s credit card, particularly if he his bankrupt, doesn’t improve his financial health. It actually only increases the risk to the creditor, as the bloke can’t pay for what he already spent. So why give him more credit? Would Chase all of a sudden, because someone is clamoring for an additional thousand dollars on his card, grant the increase, because he said he needs it to aid his bankrupt status? Maybe, but not likely, since he is years in arrears already. The rating agencies could care less (or limitedly) on the debt limit. The fact is that the US can’t pay what it owes. That’s the issue. Like Greece, or Italy or others. The diatribe over the last month has been deafening. And clueless. As bankers, we learn to understand the five c’s of credit. Certainly here, cash flow is keen. The basic problem is in the inability to pay what’s due has implications. True the government has the ability to issue more money, or can raise the debt limit or what. Fact is, the financial health of the country is in serious trouble, and the bandaid solutions proferred by both sides of the aisle are both inane and yes, unconscionable.

Use the analogy of a company experiencing financial woes. What are the options? Restructure. Both sides of the aisle seem inept at agreeing to what and how? Go BK and operate under the provisions of the law, allowing time to regroup while creditors wait. Countries don’t have that flexibility. Tap into the IMF and others for liquidity, as the only other way to float the boat is print your way out of it, or as some companies do, sell excess assets and shrink the debt that way.

We have a much bigger problem. It’s not about finances or debt limits or printing more money. It’s about planning. In reviewing a company, we look at projections, what’s expected over the next two or three or five or even ten years. One of the basic questions that I typically pose is to ask management to describe what the company looks like in three or five years. If that is a target everyone agrees with, then everyone sticks to a plan to get there. Attain one billion in sales, make two hundred million in profit, or two hundred thousand, have offices in twenty-two states, whatever the case may be. But establish a view (a goal) of what you should look like years forward to claim success. The core problem we have as a country is that we don’t establish the forward view and if we did, it gets upended. Can anyone in government state and then commit to a financial position of the country, say five years out? Further, can they stick with it? Nadda. But, unfortunately, they are really dealt a short hand….

The basic disconnect is, that as we are in a world of hurt, and that short term solutions will not work, yet we continue to legislate in parallel with election cycles rather than what is in the fundamental best interest of the country. Flipping the congress every two years with different agendas and different constituents cause changes in directions every two years. It is virtually impossible to establish a longer, even five year, plan. Take Obamacare. How long did it take to debate, so it passed and now it’s getting taken off the table? Even before its deployed. I personally wasn’t keen on its elements, but it was intended to address a larger longer-term issue. But no. New guys in the driver’s seat, and kaput. Repeal it, disembowel it, hang it out to dry. Good try but DOA.

Our fundamental problem is that our method of governance is I believe a key detriment to fixing matters. We have core, long term, and potentially fatal problems. If you were a patient in a hospital, and every so often a new doctor would come in and prescribe something different, so you’re taking x times the meds you should be taking to actually become cured, you are actually accelerating your demise, by overdosing on way too much stuff that shouldn’t be mixed and counteracts the stuff previously given which may have been doing something positive. If good health is the target five years out, stick to a single (or at least consistent) regiment for those five years. We as a country cannot though. We play musical chairs with new actors speaking new lines and changing the prescriptions. Doesn’t any one sense that the multiple doctors and multiple prescriptions supplied with the frequency of changes are actually killing the patient? Putting the poor bloke in a coma; stifled. First give him uppers, then downers, maybe an antibiotic, then some vitamins, add a bit of pot, and waalaah, you expect a healthy patient?

We need to take a step back and figure out what we want our country to look like financially five years out, or even ten. Strong GDP, strong currency, debt levels of x, the ability to reinvest to grow to the next level. Our functional two-year horizon with election gibberish appearing literally after one year in office for our illustrious members, fails to lay the discipline for a longer and much needed business plan. Is there a strategic and financial plan for the US that actually can both stay constant and be executed upon for five years and beyond? I think not. Whether it’s too many doctors prescribing too periodically, or to use a more common metaphor, too many cooks in a kitchen with a revolving door, we are only creating a weaker patient and/or lousy food. Put together a financially sound plan that stands not just the test of time but one that is etched in proverbial stone that new electorates can’t make wholesale changes to. We are all working for the same company. Get a plan and stick to it. And that may mean to change the way the doctors treat the patient in how long they can continue prescribing. Maybe we should consider longer terms for our elected officials, to ensure a plan is executed through its term. Maybe a single six-year term for all elected officials. You have your shot, no need to get reelected. Just develop a longer-term plan, stick to it and achieve the end game. Business planning 101. How many companies would survive if you constantly changed the plan? Besides frenetic fatigue, the health suffers. Certainly there would be those political constituents that would get upset during certain periods, but at least those trying to guide and govern would have the opportunity to execute, “stay the course” and deliver. The only execution taking place now is of each other and no movement terms of achieving financial health for the long haul.

The US is in desperate need of a longer-term plan, and one that not only can but WILL be stuck to. Otherwise, the constant changes in prescriptions, multiple diagnoses and surgeries, and even the overdoses of therapy, will only accelerate the mortality of the patient.



The tide slides in and rolls out, calmly, gently

The water glistening, as there she walks along the shore

Her simplicity, her beauty, sparkling even brighter, I know there’s more

She has this mood, that attitude

She knows she would, that she could, why she should

Her vices become her verses

Her magic gives way to curses

She sinks men to their knees with just her ask of please

Can she be captured, enraptured? Such is her way,

Don’t know, as she is

Hiding behind the screen of life.

Like water, she is free; she’s a seashell, a natural beauty formed by nature

Pick her up, hold her close and you can hear the sound of the sea

Connect with her and she shares the movement of the water

And she flows with a rhythm unknown

As in sea, she is cold at first touch, but envelope yourself with her and you become one, your temperatures become the same, all is at peace.

She inhales your breath, you exhale your soul and we are one.

A lady of the water, creating jewels from the sand with the sleight of her hand

And like the sea, her calm can give way to storm only to form

A passion untold, with no end in sight.

One needs to grab on and hold tight, dismiss the fright

This child of the water, she crests like the waves, so one need be brave

To explore the patina of Cristina.