Daily Intent

Santa Barbara, CA
Today, President Obama announced the founding of a new “Budget Commission”.  The commission’s sole focus will be to attack the budget deficit.  The goal: a $1 Trillion improvement in the next decade. The commissions job, like many others, will be to put themselves out of business.

In discussions over the budget deficit, people often point the finger at “horribly greedy bureaucrats”.   “A party of a few are ruining our nation.”  “Warmongers”.  “Our children will suffer.”  “Inflation is imminent.”  “The day of America’s judgment is close at hand.”  Such ideas will forever be quibbled over in debates.

But might it be important to analyze it all from a more democratic perspective?  The democratic belief upon which we stand?

The government represents the people, in all ways.  In this context, when the people are smartly managing their own income, debts, spending habits, and disciplines, then often the government fares well.  Tax revenues rise.  Deficits fall.  Jobs are created.  Creativity prospers.  The government as an end results emulates its people and borrows less.

So how do we change the people?  Will a budget commission on Capitol Hill change the individuals’ disciplines, choices and patterns?  Or does it start by educating and reprogramming the way people experience money and interact with their personal finances?

Amidst the “Great Recession” it seems hard not to analyze personal income, assets, and debts.  However, we must go one step further.  We must prevent the false economy of the mid-2000’s from happening again.  We must figure out a way to be consistent with our money for the long-long term.  We must find a way to make saving money more enjoyable.  It may not be as sexy, but it still can be plenty of fun.

Our starting point and challenge: Many absolutely hate the thought of budgeting.  Many dread pulling open their credit card statement and seeing the mound of money owed.  Many want to go on an extravagant vacation, guilt free, despite a lack of savings.

I have my own ideas regarding how to make sticking to a budget more exciting, how to make saving two bucks at the grocery line more rewarding, but I’d like to hear yours.  Next week I’ll be including some of the most creative in the Market Street Report.  So report back to me.  One sentence or many paragraphs.  All are welcome.

For this simple act of individuals creating their own budget commissions will have a far greater impact on America’s budget than any govern-mental commission.
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PLAN
Catalyst for Thought - MINDS Lunches.  Klaus Schauser, one of the founders of Expert City which later became Citrix Online, will be joining us next week.  Register at www.CatalystSB.org to ensure you receive the registration emails.
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LEARN
Buzzword: Camouflage Compensation
“Compensation that is granted to upper echelon employees, directors, consultants and related parties that is not fully disclosed in mandatory company filings. In other cases, compensation is fully disclosed, but in such a way that it is very difficult for the average investor to decipher the true value of gross pay compensation.

Non-qualified deferred compensation plans, SERPs, stock options, stock appreciation rights and share grants are all potential places where compensation can be hidden from analysts and shareholders. The SEC has proposed new regulations to more completely disclose the full cost of compensation to related parties, consultants, directors and employees.”  -Investopedia.com

  Five Points to Ponder:

   1. Winter Waves.  The Markets have undulated over sovereign debt fears, double dips, better corporate numbers, and increased unemployment benefit requests. - The Dow is up to 10,327. The S&P 500, 1100.  And the Nasdaq up, 2228.  Oil is currently $78/bbl.
   2. Microsoft and Yahoo! Unite. In efforts to compete with Google’s search engine, Microsoft and Yahoo! received good news regarding their alliance from the American and European regulators.  All is clear.
   3. Happy Housing Starts.  Hopeful news came in for the real estate industry as January data marked the 6 month in a row housing starts increased.
   4. Sip More Soup.  Campbell’s Soup has lowered their earning projections going forward.  WalMart foresees soft times ahead domestically, too. 
   5. Olympics, eh?   We’ve already seen the highs and truest of lows.  Poles lead in last place finishes.  Tiger Speaks. Tomorrow morning he’ll address past and future. 

Positives:

    * 80% of the S&P 500 corporations are expected to beat the street estimates this quarter for the first time in eight quarters.  This fact coupled with the Fed beginning to feel more confident about the overall state of the US economy boosted stocks prices this week.  The Fed projects unemployment rates to recover in 2011 and 2012 to the 6 and 7 percent range while inflation hovers between 2 and 4 percent.  Inflationary levels at or below 2 percent are most ideal, but given the current market state, 4 percent isn’t reason for intense concern.  Moreover, leading indicators rose at a .3 percent level.  This is meager progress, but progress nonetheless.
    * Bing and Yahoo! coming together will only better internet users experiences, whether they make the switch over from Google or stay with Google.  The increased competition should spur Google on to better, more accurate searches in efforts to stay ahead of the big behemoths crying out for internet eyes.
    * The housing market, since September 2009, has been noticeably different.  Many have been stimulated by the tax incentive to take advantage and buy while rates and home prices are low.  The builders are sensing this increased activity and have begun ramping up their housing starts.  There must be some caution though as leading indicators in this sector look to project a tempering.  Many in the industry believe post “tax incentive”, the end of June, buyers will climb back up on the fence to observe the landscape.  The second half of the year does indeed present some headwinds.
    * The Winter Olympics have begun!  Yesterday, Lindsey Vonn became the first American woman to win the downhill since the 30s.  Shaun White, stud snowboarder, threw a Double McTwist 1260, a trick he failed to land in the X-Games last night, propelling himself into his second gold medal.  And Shani Davis, after passing on the 500m race, out raced a crafty Korean in speed skating to repeat in the 1000m. 
    * Medal Count:   US - 14  Germany - 10  France - 7.

Negatives:

    * Americans aren’t having enough soup says Campbell’s.  I’m a bit surprised by this since soup is one of the cheaper items in which to compose a meal and it is one of the tastiest.  That said, I hope their projections of a soft 2010 doesn’t lead to more Donovan McNabb commercials - “Gotta make sure you’re eating good.”
    * The luger from the country of Georgia who died while practicing on the quick turns of Vancouver.
    * The media surrounding Tiger Woods’ return.  Gossip and speculation continue.
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GET INVOLVED
Local:

DPHS Comedy Night Fundraiser
Where: Dos Pueblos High School
When: Friday, February 19th.  7:30pm.
Cost: $8 - $10
Why:  Laugh while supporting the kids.  Hosted by alumni Josh Duvendeck.  Improv and stand-up comedy.
For other fun ideas, go to www.lovemikana.com

Live and Be Well,

Jeff Bochsler