Tuesday, April 29, 2008

Seven Dollar Gasoline

It's been interesting to watch the price of gasoline continue to set new records. The inflation adjusted price of $3.40 (with a 1980 baseline) has been passed. At current prices, we are spending about 3.5% of our income on gasoline, compared to 5% in 1980.

We are simply a more affluent society than we were 25 or 30 years ago. At $4 a gallon versus $1 a gallon, we are spending $45 a week more on gas. That's one meal out a week for most families. Not that much of a sacrifice, it appears.

Some have suggested that we raise gasoline taxes, as they have done in Europe. That's bad policy. Let the market handle it. So far, we aren't consuming any less fuel. Gas prices will continue to head north, driven by two primary factors. One is the move toward global price equalization. The other is simply demand.

As the price of gasoline in the states equalizes with gas prices globally, the price will begin to stabilize. The other factor is simply demand. Once we stop buying as much gasoline, prices will ease. Until either or both happen, we can expect a continuing increase in the price at the pump.

What's your take on the situation?

Until next time...

Thursday, April 24, 2008


Wow! Another day of sunshine and blue skies in Atlanta. We are grateful.

It's the topic of conversation - this supposed recession that seems to be upon us. Really? Yes, Ann Taylor and Bombay Company are out of business. That's not a function of recession, but a reflection of the competitive realities of a free enterprise system. The price of gas continues to set new records. That's not a recession, but domestic gasoline prices adjusting on a global basis to the value of the dollar.

It's the earnings reporting season on Wall Street, and the majority of the reports continue to be positive. Have people in America lost jobs? Of course. Again, this isn't a recession, just global competitive realities.

The classic definition of a recession is two consecutive quarters of declining Gross Domestic Product. The last time that happened was 1990-1991. Current surveys show declining consumer confidence. The only documentable correlation these survey results have with anything is the price of gasoline.

One of the best proxies for the health of the economy is Wal-Mart earnings. For the qaurter ended January 31, 2008, Wal-Mart reported revenue growth of 8.3%, while the year ended on this same date saw revenue growth of 8.6%. Income from continuing operations for the year ended 1/31/08 was up 5.8%.

It will be interesting to see the final numbers for GDP for the first and second quarters of 2008.

Until next time...

Tuesday, April 22, 2008

Temple Prostitutes

For thousands of years, temple prostitutes have been a part of ritual worship to a variety of deities. It appears that the latest of these to come to light are the young ladies at the YFZ compound near Eldarado Texas.

Based on media reports, which must be taken with several grains of salt, these young ladies were involuntarily married off at very young ages. Many may have been treated as what we will call temple prostitutes.

The purpose of government is to promote good and thwart evil (which definition itself is problematic for some in society, as they refuse to embrace absolutes). The current challenge appears to be to confirm the identity and story of the teen who called the hotline, as well as to confirm that physical, emotional, and/or sexual abuse did occur.

How can those who have been given the authority of the state confirm these details, and handle a situation of this magnitude, without interfering with the personal freedoms that our country embraces? Even more important, how can the authorities do what they need to do, without infringing on a parent's responsibility to raise his or her children?

The state of California, as intrepreted through its court system, would have us believe that the state's right to educate its citizens trumps a parent's right to educate their children. This is first class, industrial strength, unadulterated horse feathers.

Most likely, the answer for the authorities in Texas is to remember that the state is not the end all and be all, but rather an agent for good.

More later...

Sunday, April 20, 2008


Yesterday we discussed ownership. As we embrace ownership comes the responsibility (that irritating word once again) to embrace stewardship.

The basics of stewardship are fairly simple. In its simplest form, stewardship is the belief that we are managers, rather than owners, of all that is in our care. This includes material possessions, entries on our financial statements, our time, and our relationships.

As stewards, how do we choose to approach life? One approach is to understand that at the end of the day, our lives are not about us. Rather, we exist, and have been given the time, money, relationships and other resources that have come to us, primarily for the benefit of others.

Does this dictate a life of poverty or austerity? Absolutely not. Many have been given the gift of creating wealth, whether that is a wealth of time, relationships, or financial resources. Rather, it is a choice to use or deploy those resources to help others do well.

In almost every case, this is through example. Often, through an encouraging word. Many times, it is through offering a listening ear, or a word of advice or counsel. From time to time, it could be teaching someone what they need to know to prepare for a life well lived. Sometimes, it involved giving of our financial resources.

At all times, stewardship comes with the mindset that what we have we serve as overseers of, to be used for the benefit of others.

Do we need men and women of character and integrity to enjoy the fruits of labor and ideas? Absolutely. The young need to know that a life of character and integrity can yield an incredible lifestyle. These young often see this lifestyle portrayed only by those who live just from the lips out.

Until tomorrow...

Saturday, April 19, 2008


Georgeous day in Atlanta. Sunshine, blue skies, 73 degrees. Braves beat the Dodgers 4-1 in nine innings.

Ownership often leads us to think of cars and homes. How about an expanded definition that included work, time, life, relationships? As a side note, a home with a mortgage is not owned by the tenant, but by the mortgage company. Missing four payments in a row will clarify this detail for those that may have questions.

One approach to life is the idea of leasing or renting. Most people lease their homes from the mortgage company. Most cars on the road are leased, not owned. When was the last time you saw an auto ad that mentioned the purchase price?

95% of working Americans lease their work lives to the highest bidder, in return for a check every couple of weeks, health benefits, a 401k, and perhaps a few weeks off every year. Life tends to revolve around the weekend, as this is the time to recharge. Makes me think of the move "The Matrix".

Many also choose to lease their relationships, such that when the new wears off they simply trade for a new or different model.

Ownership is different, and starts with thinking differently. From a business perspective, those who own are focused on creating cash flow based on physical, technical, and human resources, and the development of replicatable systems.

Those who own their cars and homes understand the value and flexibility of having no debt, and the benefit of a long term holding period.

Those who own their lives have matured to the point that they are prepared to embrace the unpopular "R" word, responsibility. This maturity causes them to make long term commitments to others, with an emphasis on serving others well.

This maturity also gives them the freedom to walk off the plantation, and tell the masters in DC that they prefer to take full responsibility for their own financial future. An ownership mentality embraces the fact that life is full of risk, and that man has been given by his Creator incredible creative genius. This creativity, exercised with focus, and with the purpose of mutual benefit, can create a life and future that no government subsidy, regardless of intent, can come close to duplicating.

My special thanks to Melissa Libby (www.melissalibbypr.com) for encouraging me to pursue this blog. And, a standing ovation to friends Kevin Murray and Rob Coatsworth, of CTR Partners (www.ctrpartners.com), for being nominated as Gwinnett Chamber Business of the Year.

More later...

Friday, April 18, 2008

First thoughts

Here is to one more new experience. We will raise a celebratory glass at lunch. Welcome to our world, and we invite your participation. You'll enjoy some of what you read, and other thoughts will give you heartburn. For the day, we are enjoying sunshine, blue skies, and 75 degree weather.

Once the CEO's of the major financial institutions have their pay cut for stupid decisions, just as they earn bonuses for outlandish risks, we may have sanity in the lending markets. Not much before then.