Gene Morphis ' View

That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their ...

Thank you Hawaii Web Services, whomever you are. I've been stumped on how to get my email working on my new laptop with my expensive Verizon Fios. And the Verizon people haven't been too helpful - no one apparently wants to support Outlook - just Outlook Express. So, anyway - these folks http://www.hawaiiwebservices.com/verizon_email_setup.html have been good enough to spell it out. Verizon could spare themselves a lot of help desk time by putting some nice straightforward info like that on their FAQ page, which, BTW, is completely lame.

OK Republicans, we had our day in the sun with President Regan. Time to give President Obama his due: today's speech was very good. Despite the sniping by some conservative talk show hosts, it was a balanced and direct speech. Not tenative. I was particularly impressed by the blunt talk about the Holocaust. No nonsense, made it clear that we aren't buying any Iraqi revisionist denial. And that we were going to do a job in Afganastan, whether they liked it or not. Conservatives should welcome the speech. It was sound foreign policy.

I received a letter from Portfolio magazine, announcing that they were ceasing publication. I'm only mildly surprised and mildly disappointed. Surprised only because it joins a list of magazines that I had paid subscriptions to, which folded, or turned into ezines. Red Herring was a favorite of mine, but it disappeared years ago. I became a convert to Business 2.0 . It didn't really get my attention at first, but over time I began to look forward to it. It closed a couple of years ago; I still don't think Time Warner gave it a fair chance. More recently, PC Magazine converted to a net-only product. In all three cases, it was obvious that advertising was down as once-fat magazines full of ads became as thin as a supermodel, but not as rich. I occasionally go to PC Mag online, but for me it just isn't the same. And I'm only mildly disappointed in that I had paid for issues I'll never receive. I'd already decided not to renew my subscription. In an at...

I attended a conference at Pebble Beach this week. Being a total business junkie, I always ask everyone how business is. At the tony Pebble Beach Resort, it turns out business isn't very good. The staff generally tried to put a good spin on it; blame the general economy. But after a bit they would open up a little about the criticism companies have undergone from Congress and the press about meetings at resorts. My feelings about this certainly haven't changed, some middle manager banker busts his ass all year trying to close a couple of loans while working with clients in trouble trying to collect something without knocking them into bankruptcy and losing all the bank's money, and that guy has a contest that if he makes his numbers he wins a trip and the next thing he knows; trip canceled. The staff at Pebble were courteous, friendly, helpful and went out of their way to thank us for the business. But I learned that as soon as our conference was over, there weren't...

Yesterday, I took United Airlines from San Francisco to Philadelphia. The plane was at the gate before the scheduled departure time. But, it was raining and the pilots for our flight were stuck in Reno. Those things happen; I brought more than enough to read for just such a situation. After about a two hour delay, the pilots made it in and we boarded. Since the flight was only about two-thirds full, there was adequate overhead bin space and we were able to board quite quickly. But, once boarded and seated, we waited. Waited for the luggage to be loaded. How does that happen? How does a plane sit at the gate for over two hours and the ground crew not put the luggage on the plane, so that when everything else is ready so is the plane???? If you fly often at all, you see just exactly how the airlines manage to rack up the losses and have to take a periodic pilgramage to the cleansing water of a bankruptcy court...

Stocks were down today. Party line is that the market was surprised on the downside by retail sales. !!!!! Last week, Target, GAP, Macy's, JC Penney, Nieman Marcus (same store sales -30%!) and just about every one else reported a sales decline. How could anyone expect the government series to be anything but down? We either need new market observers or they need to come up with something different to say...

OK - you've seen here before that I occasionally like to smoke a small Swiss cigar named Villiger. And they pack a bit of a punch. So, UBS has replaced its Chairman Peter Kurer with former Swiss Finance Minister Kaspar Villiger. Connected with the cigar company? A coincidence? I don't think so...

The new chairman of the Republican National Committee sent me a letter soliciting a contribution. So, I sent this letter back: Mr. Michael Steele Chairman RNC Mr. Steele: I received your letter soliciting a contribution to help you "clean house". I certainly agree that needs to happen. However, I have no belief in the veracity or sincerity of the elected Republicans. So, I'm subjecting them to a simple test: a "no earmarks" pledge. Until they are willing to sign up for that, I'm unwilling to sign-up for more money. Respectfully,

Mr. President: The House stimulus bill is awful. Dangerous. Counter-productive. It has a very high probability of making things worse!. Your man Rahm Emanuel is supposed to be a tough guy: turn him loose on the House Dems - they are selling you down the river. Some simple tests: the spending will improve long-term productivity; the spending will reduce our dependence on foreign oil, and the spending will happen fast; very, very fast. There may need to be some legislation to enable spending without years of environmental review. For example, spending on wind farms would improve long-run productivity and reduce dependence on foreign oil. But let's say the wind farm is a couple of miles offshore. You can't have environmental groups stopping the development to see if some fish will be harmed. This spending has to happen now. And, no tax cuts with the possible exception of AMT. People aren't going to spend any tax savings; they are going to pay their credit card bills or r...

I received a letter this week from the Republican National Committee. I decided to send them a formal response: Mr. Robert M. Duncan Chairman Republican National Committee Mr. Duncan: I received your solicitation of January 16Th, 2009. As you know, I have occasionally contributed to the RNC and, over the years, directly to various Republican candidates. However, I feel that the candidates I supported completely betrayed me. For years, I've railed and fulminated about "tax and spend Democrats". But the Republicans over the past decade became something far worse: spend and borrow Republicans. Why is this far worse? President Regan demonstrated that a tax cut, associated with some fiscal discipline, can generate quick results. However, the borrowing created by spend and borrow lasts for decades, damaging the Republic, perhaps for multiple future generations. So, let's cut to it. Forget a "no new taxes" pledge: anyone who believes we are going to get out of this...

Many of my favorite magazines continue to wither away - joining Look and Life in magazine heaven. I was a dedicated reader of Red Herring, loved the practical - and occasionally snarky - Business 2.0. PC Magazine announces on the inside that the January issue is its last print version; from now on it will be an e-zine. It really isn't all that surprising. There aren't dozens of PC producers anymore fighting for our business. No more Eagle, Brick, WYSE, DEC, Tandy, Packard Bell, Swan or even IBM. And not much invention happening in software either. No competition=no advertising. I understand it even though I don't like it. Editor-in-Chief Lance Ulanoff wrote a "Dear Reader" letter bound into the January edition. In it he tried to convince me that the e-zine format is just as good. His first two points are: "It arrives in youre-mail automatically." and " It is portable". Well, Lance, the magazine arrived in my mail box automatically, a...

Here's the problem with bankruptcy: according to the best numbers I can find, legal and related fees for the UAL bankruptcy were approximately $300 million. Fees in the Enron bankruptcy were about $700 million. Fees for GM would certainly be in the billions. Unimaginable number of certified classes: sr. secured lenders, jr. secured, participants in revolver, unsecured, retirees, trade credit, dealers, spun-out parts manufacturers, each with lawyers and accountants. So, those billions to legal fees have nothing to do with building better cars, becoming more efficient, funding retiree pensions and the like. But the bailout option isn't much better. The unions will reluctantly play ball, dealer base will shrink and more managers will lose their jobs. But, what motivation do the retirees have to go along with anything? The only solution I see is for them to go back to work - but only get paid their pension benefit. And work might be washing cars in dealer lots...

As I posted here weeks ago - general agreement is emerging that the FASB/SEC's stuborn insistence on mark-to-market accounting, even if there is no market. (The FAS mandarins refused to consider the possibility that there could be a market freeze and no prices as they built their mathematical models.) Well, widespread criticism now has a chance to get them to at least modify their position.

Louise Yamada is the doyenne of technical sotck analysts. She was recently on Bloomberg (available on the Bloomberg site) and fundamentally (ok - it is a pun) said that we are in a 13-16 year bear market. If I had followed Ms. Yamada's advice a few years ago, I would be a much richer man today. I recommend that you watch the video. I'm switching my 401(k) contributions to cash and near-cash investments until she declares the sructural bear market over.

Every recession plants the seeds for economic advantage in the future recovery. In the very tough 1973-1974 recession, prices fell so low that it enabled the creation of the leveraged buyout industry. With many manufacturing companies in particular trading at 3-4 times cash flow, new market entrants like KKR, Forstmann Little and Dyson Kisner Moran came in and created gigantic wealth for themselves and early investors. In the 1991-1992 downturn, engendered in part by the massive office space overbuilding funded by Savings and Loans (Resolution Trust Co, anyone?) made it possible for telcom and internet start-ups in Austin, San Jose, Northern VA, Boston's Route 128, Dallas, etc. to rent offices at a fraction of the cost had those communities not been overbuilt. And the 2001-02 downturn gave us cheap fiber and bandwidth, and bargain-priced software to feed productivity gains in corporations everywhere. So, where is the upside? At this moment, all that I can project with some confid...

MSFT has announced a significant stock buyback - $40 billion as I recall. In this economy, I view that as a big mistake. As stock prices plunge everywhere, the opportunity and flexibility afforded by a cash horde can't be overestimated. Steve Ballmer - hold the cash buddy.

If you work for a company and the President, CEO or COO - especially if he is new to the company, says "we are going back to basics", update your resume' that day. Don't hesitate; begin networking for a new position, post on Monster/Hot Jobs/Career Builder, etc. as soon as you can prepare a competitive resume'. Your company is in big trouble and the leader most likely is clueless to the nuances of the market, competitors and internal capabilities. If you own a stock and, in a presentation or earnings call, the CEO says "we are going back to basics", sell the stock, and give strong consideration to shorting it. Of course, by the time they are spouting that, the stock has probably already been pummeled.

I ordered a sampler of the new, much-discussed and much-promoted Nub cigars. From Oliva, the concept is that regular cigars have a sweet spot, generally in the middle, where it most richest and most flavorable. So, they attempted to develop short cigars (shorter than robustos) but rolled so that the entire cigar is the sweet spot. I'm not too sure they succeeded. But I am sure that they are far stronger than I expected. Even the Cameroon wrapper, suposedly the mildest blend is one charged-up stick. I would only recommend to someone who likes them really, really strong...

Let's parse the credit crisis and explain what really happened rather than all the silly and illogical explanations bandied about. There are actually multiple causes, not just simply one. Actually, we'll discover seven. Each type has its own backstory. Start with Freddie and Fannie . While widespread fables attribute this to inadequate regulation, nothing could be further from the truth, or, to be direct, a dumber explanation. Fannie and Freddie were incredibly regulated - in fact, there was a regulator OFHEO that had nothing to regulate but Fannie and Freddie. (As an aside, when you hear one of our outstaning elected officials say that this all happened because of inadequate oversight, just remember OFHEO. Your tax dollars were at work on oversight right there. Feeling better?) Rather, F & F's demise, at enormous cost to the now-frequently-abused American taxpayer, was directly caused by a failure by the slimy gutless weasels we elected to run our government. F&...