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Archive for January, 2009

Capping salaries to create jobs? It really works!

January 31, 2009 6 comments

Rocky just read the most brilliant idea to create new jobs in this post-financial crisis world.

Jan. 30 (Bloomberg) … Earlier today, Senate Democrats took the first step toward limiting pay for workers at companies receiving federal bailouts. Senator Claire McCaskill of Missouri introduced legislation to restrict compensation at such companies to $400,000, the equivalent of the U.S. president’s salary. Another measure being proposed would create a court to restrain executive compensation.

Rocky observes that if the government “caps” compensation on the best and brightest employees at a company, those employees will quit. The capped employees will then either launch or join an unregulated company.

Once they settle into their new positions, these employees will count as “new jobs created” in the monthly statistics of the Labor Department (even though they are just moving around). The old positions will not count as “job losses.” (Although the regulated company performance will deteriorate faster, that’s a problem for the Treasury Department, not the Labor Department.)

Perversely, the lower the cap, the more jobs that will be “created.” So, if Obama wants to “create” millions of jobs, he can pick random industries, force them to accept a few government dollars, and just keep lowering the salary cap!

Note to Senator McCaskill: You wrote that the $400k cap is based on the salary of the President of the United States. Does your cap for executive compensation permit the following tax-free FREE perks: Company Residence (White House); private chef and dining room; private jet (Air Force One); private helicoptor; 34 member domestic staff; private security detail; and a personal “needs” expense account, which total tens of millions of dollars each year?

The life & times of Rocky Humbert

January 30, 2009 3 comments

Since starting his blog, readers have inundated Rocky with questions, comments and spam.

He answers the most common questions below:

Is Rocky available for speaking engagements?
Yes, Rocky is a sought-after motivational speaker for corporate retreats, trade shows and Gambler’s Anonymous meetings. He also ghost writes offkey-note speeches on a pay-by-the-word basis. [Important Update: After an unfortunate fly-fishing accident, Rocky had to cancel all speaking engagements until further notice. He remains available for on-line chats and telephone interviews. Clients: If you previously booked Rocky, send an email to receive a refund. Police Officers: If you previously booked Rocky, he WILL appear in Court.]

Can you tell us about Rocky’s family?
Rocky’s mother came from a prosperous Cuban family that cultivated world-famous chile peppers. Shortly before Fidel Castro came to power, Rocky’s mom escaped on a small boat with just the clothes on her back, and a handful of Habanero seeds in her hand. She left her family behind, but brought her secret BBQ recipe to America, with dreams of freedom and the perfect sauce.

Rocky’s father grew up in The Bronx, and served his country with pride as an anti-aircraft gunner during WWII. Trapped by the enemy without food or water, he ingeniously turned his gun skyward, and shot down a flock of Golden-Maned Hornbills to nourish his battalion. For this brave deed, he received a Bronze Star. Returning to the USA, Rocky’s father worked his way through college by selling brisket door-to-door.

Through a common acquaintence, Rocky’s parents met and fell in love. With his mother’s BBQ sauce and his father’s brisket, they decided to start the first and only Kosher BBQ joint in The Bronx. Unfortunately, they were ahead of their time, and the restaurant closed inauspiciously after just three weeks. Rocky’s father then joined the burgeoning Military-Industrial complex and designed inertial guidance systems for nuclear missiles.

Rocky acquired the love of nuclear missiles from his father, and following in his dad’s footsteps, became a Rocket Scientist in his own right.

Why does Rocky always write and speak in the third person?
Rocky thinks this is perfectly normal, and wonders why most people do NOT speak in the third person? When pressed on this point, he offers three more possible explanations:
1) Elmo from Sesame Street as a role model. Elmo’s inspirational quote: “Just because you don’t know what is going to happen, doesn’t mean you are unimportant.”
2) The Wizard of Oz as a role model. The Wizard’s inspirational quote: “Pay no attention to the man behind the curtain.”
3) Mental illness.

How do I contact Rocky?
The best way to reach Rocky is to post on his blog at http://www.rockyhumbert.com However, if you have a sensitive issue that requires discretion, you may send him an email:rocky (at) rockyhumbert.com.

What is Rocky’s favorite music?
Rocky is partial to Gregorian Chant and Bluegrass. His favorite single is Ed Seykota’s Whipsaw Song.
For your “edge-ification”, click below:

Memo to Ford: Burn natural gas not cash

January 29, 2009 2 comments

ford1Rocky supports the major automobile manufacturers’ initiatives to reduce American dependence on imported oil. This includes research into fuel cells, natural gas, and the combustion of leftover General Tso’s chicken from Rocky’s local Chinese Restaurant.

The following news story from Bloomberg surprised Rocky:
Jan. 29 (Bloomberg) — Ford Motor Co., insisting it can survive without federal loans, said it burned $5.5 billion in cash in the fourth quarter.

Rocky knows of no internal combustion engines that efficiently burn “cash.” This opinion is based on independent research he conducted many years ago:

As a political science experiment, Rocky replaced a Chevy’s gas cap with a rolled-up copy of the editorial page from the New York Times. He then set the newspaper on fire (Chevy “Blazer.“) He believes that the test results can be extrapolated to Ford vehicles and a wad of US currency.

Rocky applauds the news that Ford will not seek Federal loans. He also ponders whether Ford’s R&D Department may actually be wiser than they appear: “Is cash trash?”

[Disclosure: Rocky is currently bullish on gold. But his opinion may change at any time.]

Boneless pig farmers lobby for their pork

January 28, 2009 3 comments

pig1McDonalds is bringing back the boneless McRib Barbeque Sandwich in selected markets. Rocky believes that lobbying by the Boneless Pig Farmers of America for their piece of the “pork” in Obama’s $800 Billion stimulus package may explain this controversial culinary development.

From today’s Wall Street Journal:
“When you’ve got 800-plus billion dollars to spend, you’ll have an equal number of opinions on how it should be spent,” said Chris Galen, spokesman for the National Milk Producers Federation, the dairy industry’s main lobbying group.

Rocky respectfully disagrees with Mr. Galen’s comment. The world population is only 6.7 Billion, and there are far too few economists amongst that total to create 800 billion opinions.

Nonetheless, Rocky believes that much of the lobbying may be for naught. No matter what Obama tells him to drink, Rocky still prefers a Diet Coke with his McRib, rather than a pint of milk.

The Official website of the BPFAA (Boneless Pig Farmers of America): http://www.bonelesspigs.org/bonelesspigs_MMH.swf is well worth a visit.

The Car Wash Index: leading economic indicator?

January 27, 2009 2 comments

car-washOn a recent frigid Sunday morning, Rocky noticed a long queue of cars at the full service cash wash ($12), but the self-service car wash ($3) next door was completely deserted. Rocky hypothesized that this might be a leading indicator of improved consumer sentiment — and perhaps a bullish omen for the stock market.

Rocky needed a car wash, and he didn’t like to wait. He pulled into the deserted self-service car wash, and fed a five dollar bill into the change machine. Only a single quarter came out. The car wash owner explained that the change machine dislikes the new $5 notes, and the owner handed Rocky five $1 bills. (Rocky now had a 5% profit.)

Instead of taking his $0.25 windfall and driving away, Rocky turned the machine to “soapy wash” and began to douse his car with a high pressure stream of soapy bubbles.

The soapy stream lathered the vehicle, and instantly turned into a frozen coating of thick white custard — denser than the shaving cream an old-time barber uses. The liquid froze solid as it reached Rocky’s car!

The wash cycle ended after five minutes, and Rocky’s car had a white frozen shell. Rocky scraped the ice from his windshield and drove off, having mummified the encrusted road salt and sand under this new protective ice finish.

Rocky glanced in his rear-view mirror as he drove away, and saw shiny, clean cars pulling out of the expensive full-service car wash down the street. Perhaps a little early to aggressively buy stocks, he concluded.

Guaranteed to never lose value: Another scam?

January 26, 2009 3 comments

Rocky rubbed his eyes upon receiving an advertisement from a Fortune 500 company that promised an investor would “never lose value.” Rocky knows that such statements are either fraudulent or “qualified in their entirety by the Private Placement Memorandum” (i.e. legal but money-losing.)

Rocky’s initial reaction was to call the Securities Exchange Commission, but based on recent whistleblower experiences, he decided that his time would be better spent buying a new pair of non-prescription reading glasses … so he could independently read the “fine print.”

    Click here for details on the one place where “your money never loses value.”

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Nouriel Roubini: Stock Market Bull?

January 23, 2009 1 comment

Rocky suggests the following question for the 2009 College SAT Preparation Guide:
_________________________________________________
Question:
“Lex Luger is to Hulk Hogan, as Nouriel Roubini is to ___?”

Choose from:
(a) Timothy Geithner
(b) Robert Rubin
(c) Henry Kaufman
(d) Elmo
(e) None of the above
_______________________________________________________

The correct answer is (c). Roubini, known for his premature and Nostradamus-like prognostications, recently claimed the Worldwide Title of “Dr. Doom” from Dr. Henry Kaufman, who held the coveted Title from 1977-2008. By analogy, Lex Luger took the World Wrestling Championship from Hulk Hogan after a similarly long string of “victories.”

Rocky suggests that Roubini, who is forecasting a further 20% stock market decline, may be (relatively speaking) a stock market bull! Rocky just checked the December 2009 S&P500 ETF 640 Covered Call, and discovered an annualized stand-still rate of return of about 14%. This BULLISH trade will make an attractive return even if Roubini’s 20% decline forecast proves correct. See http://www.optionseducation.org/strategy/covered_call.jsp for technical details.

Rocky concludes: The market is more bearish than Dr. Doom-Roubini and/or options prices (“implied volatility”) are too high. Rocky shuns forecasts, but he tends to think that the latter may be true. He strongly believes, however, that Noriel Roubini’s reign as Dr. Doom will be far shorter than Henry Kaufman’s.