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Going Full Circle

So, while perusing the front page of the NY Times after a killer evening of climbing, I come across an article titled,  “Gas pedal Flaws Lead Toyota To Stop Building 8 Models”.  It might have well of had an exclamation point at the end.  Seriously.

What a fate in this economic climate!  To be struck by an internal quality control issue, especially in an industry where quality control is the Achilles heel of a reputation, is a situation that will never go away.  How many of you remember that tire issue that Ford Explorer’s had almost a decade ago?  The Firestone tires would give way to high speed rollover accidents….really tragic shit.  I don’t think they’ve ever fully recovered to that market leading high before then.  Explorer’s were the top of the market for the popular SUV.  It was the poster boy for the SUV industry.

Anyway….this article is on the front page of the NY Times.  Exclamation.

A rare condition causing the recall of 4.8 million vehicles.  In a time when you dominate the word’s number one auto market, while your competitors are recovering from a financial one-two punch that has left them tightening their belts and reorganizing themselves, their entities and their debt.  Talk about a bad struck of luck.

So what’s the first thing that pops into my mind?  At 9am I would be buying puts on Toyota like they were going out of style.  Then I would find out who their number one suppliers are and buy puts on them if they’re publicly held.  Then I would find out which insurance company was at the foundation of the health-care provider that provided health-care to all of those employees.  Scratch that last one, they’d be covered on the new unemployment insurance for a while.  But I would find out the service providers that depended on the Toyota production model and buy puts on them too.

Once you realize that there are a ton of other people with the biggest plan you start watching the premiums on these puts going through the roof.  So you start selling certain puts and then buying them again when the supply increases from others thinking like you are.  Before you know it, you’ve doubled your money and someone else is collecting unemployment now too.  Then you start looking for exotic derivatives that tie global aluminum into being the correlate for the yen and how it is a proxy for Toyota stock.  That’s the evil wizard behind the drape pulling levers and mixing potions type of shit.

Since most folks will never get within arms length of people who take part in that side of the financial industry we turn to a different indicator of public health besides the financial indicators that reduce the health of our existence down to an index.  That is when we turn to the life we live every day and look around at the signs.  There are a few less gas stations these days and if you’re in the market for a home it’s a great time to buy.  And people are drinking more and doing less sport…or are they.  What of these not-cheap habits that are fundamental in the who-we-are and how-we-are sequences that make up our lives?  And this is how I get back to climbing.

At the climbing gym tonight it was pretty busy.  Tuesdays and Thursdays always are, but today was pretty crazy.  Tonight I was pretty lucky.  I was climbing with two great individuals and the session was something that had a life of its own.  Before I had realized it, there was no more skin on my hands, I had reacquainted with two or three people that I hadn’t seen in years and I was still climbing.  It’s hard to complain about that, especially considering the updates people had been giving me on their lives.

There are so many professionals out of work right now.  IT folk, mortgage peeps, builders…and a lot of them.  But what I thought was even crazier is that somehow, someway, they’ve still found the psyche to go climbing and pursue something that they enjoy and identify with.  Be it from their savings or government aid, it is something that still allows you to enjoy a part of your life even when the days get dark.

Hooray for climbing.  I think we’ve made it full circle.  Isn’t that always fun.  Though if you’re looking for a car these days I’d say take a look VWs.  My Golf has brought me to a lot of incredible climbing spots.

Maybe the next thing will be on wind power or home remodeling…ciao

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Financial Planning: As pivotal in our lives as learning to ride a bike

From a young age we are taught skills and lessons that should stay with us throughout our entire lives.  Simple tutorials that are most often hands-on and that entail a few small mistakes.  All of this is to ensure that the most complete comprehension is gained, in a knowledge sense and in respect of consequence.  The physics in riding a bike seem all so uncertain in the beginning, while we start to understand about equilibrium and momentum, rudimentary conservation of energy and, of course, impact forces.  There are many things that we add to our scope of understanding in life because it will greatly alter our ability to meet goals and find footing in this world, knowing what to do with your hard-earned income is the same.  Why should personal finance be any different than riding a bike, learning to make pancakes or mastering the rules of the road?  Besides being basic knowledge that we should all have, not having this understanding can lead to even more precipitous falterings in life.

Having a solid grasp on our individual finances is key to keeping our reality in check and our futures in our controls.  Long term goals do not mean that your life must be planned out and that we are locked into all decision we make at an early age.  Instead it is about learning how to initially balance and manage the wages, salaries and incomes that come our way, with our ability to spend money and live life.  The first time you overdraw an account without having overdraft protection it is like that first fall off of the bike.  Luckily the sting is usually only to the tune of $35 or so, but when you start equating that dollar value to what it could have been, we quickly begin to understand the prospect of loss.  Speaking for myself, I would prefer to have those bottles of wine or other accouterments to daily existence that it could have been.  A lesson such as overdraft, for good fortune, is one of the easier ones that we learn before heading into the lands of retirement benefits, group insurance policies, qualified plans and non-FDIC insured securities that could lose us as much as they gain for us.

For the ease of the conversation, let’s assume that most people understand good basic financial behavior.  That we always know approximately what our bank balances are, know that our expenses must be less than our net income and, perhaps, have already begun to put funds aside for future income or whatever need will arise.  There is a laundry list of investment vehicles sold by knowledgeable and trustworthy individuals who operate, according to their commitments and licensure, to find the best-fit products for their clients, while staying prudent and accurate for the benefit of the companies harboring the bulk of the risk that provides the guaranteed returns on our investments.

The initial wading into financial waters begins with one key step: identifying your financial needs and wants.  Maybe you want a home or to retire early?  Perhaps you want to not burden your family with any expenses you have chosen to take on in your lifetime?  Or it could be as simple as wanting to grow a nest-egg for the future for an undecided purpose, like a child’s education, a real-estate investment, a horse or supplemental income to balance out any funds that might be received from social security.  The important thing to keep in mind as we realize these goals is that they need not be permanent goals, as many investment products that are qualified plans have laws that allow them to become other investments for minor service charges, without losing the advantage of tax-free growth or access to the aggregated cash value.

If you have already taken on large obligation in life that have long-term financial implications, like a mortgage or other liability, you may want to limit the risk exposure to your family if something were to happen in the long run.  Starting at low initial investments, there are manners to transfer the highest level of pure risk to companies that use the statistics based off of the averages of large groups of your peers to evaluate your risk.  Upon evaluation of your personal health, your occupation and the amount of funds you ultimately want to ensure are present in case of an untimely accident, an offer is made to you by the company that will buy your risk and hope that you life a long and healthy life.  In this manner you are protected from financial ruin in case of life-altering accidents and a company will gain from your fruitful life and use what you paid for protection to fill the void in the unlucky individual who has walked the same path as yourself and not arrived as healthy.

Once you start looking into the profile you create for yourself, it will become easier to realize how malleable this experience and situation can be.  Many investment vehicles allow you to use the tax-free grown savings for large purchases, like homes, or to turn cash value from your risk-protection (insurance) into an income stream that you will never be able to outlive.  The flexibility is reality limited to how well you communicate your needs and how you want to go about establishing them.  A producer, broker or financial planner is just a guide through the complicated variety of products and laws to get you the best solution to your needs and wants.

Investments are as simple as riding a bicycle, when you know where you want to go.  For a simple roll down the street, a basic self-tutoring would probably be enough, but with a more extended journey do the potentials for hazards increase.  Just as you would consult experts before riding bicycles down mountains or in touring foreign landscapes, you should consult financial experts as a means of making yourself more aware of your options in life and what is required to minimize the risk in all of the the endeavors in which we choose to engage.

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the road less traveled

wenden >< wenderstock, switzerland

wenden >< wenderstock, switzerland

sometimes the road less taken is that way for a reason.  sometimes, avoiding the path of resistance means there is a support network, a mechanism in place that is sophisticated enough to allow you to pursue your life without binding you in the webs of others.  sometimes the road less traveled just ends in a cul-de-sac, leaving you to turn and head back.

i can remember topping out on half dome about eight years ago with Alex McAfee.  it was later than we wanted it to be, part my fault, and we had very little food and water and just knew it was best for us to get down.  walking off of the backside was kind of a surreal endeavor at night with headlamps.  there is a great slab, like a sea of granite melting away from you.  somewhere in the middle is a walkway with some metal wire handrails to guard the average person from a hideous, yet eventful death.  we crisscrossed that slab for twenty minutes expecting to hear each others’ last screams, denoting that we did not find the handrail and not to go toward the scream.  eventually we found the walkway and followed it off of the slab and turned to find the trail that would lead us back down to the front of the formation where our bags were safely stowed (or so we thought).

jingling away with rope and rack, probably still in climbing shoes and disco shades, we slowly made our way down picking through the bushes on what seemed to be the trail.  the caveat being that too far in one direction could possibly end up in a large fall and a bummer of a story for the other to have to pass on to the park service.  let alone the loss of gear that would never be used again.  hiking through the thicket, especially around climbing areas, you generally rely on these paths of least resistance, meaning that someone has possibly travelled there before.  this is often a good thing.  it means you are probably not far from where you should be, especially since you often do not know exactly where you should be, but know where you would like to be.  this is often more interesting in the middle of a large rock face when you realize you have climbed two pitches in the wrong direction because you convinced yourself that the topo and description led you up these ‘obvious’ features.  that situation, however, is a different story.

in the end, the path that was easiest to follow brought us down safely, though hungry and bedraggled, to our campsite to discover that marmots had clawed holes into Alex’s bag and eaten his snacks.  whereas my bag had oddly been unzipped and also emptied of its aromatic contents by some small mammal.  thank god tuna comes in a hermetically sealed can.  the trickle of water that seeps out of that face and some unstolen snacks got us through the unplanned second evening under half dome.  the next day we ransacked the cafe next to the yosemite post office for a three course lunch.

at the time i thought our feat was stellar.  two guys who had really never climbed before, minus a quick romp on middle cathedral, had sent the northwest direct route in 14 hrs.  now i look back and think, shit, we could have done it so much faster if i didn’t get all scared up in the zig zags and crawl my way through the ‘thank god’ traverse.  maybe next time.  but i think it would be more fun to free the whole thing and not start stepping in slings.

the moral of the story is that sometimes, to get where you’re going, the path most traveled is requisite.  often the journey is the path less traveled with an occasional leg that has seen the wear and tear of others.  it is in this moderation between us and society that our true individual path lies.

seeing the news feeds with hints at a partial nationalization of some of the US’s largest banks is what made me think of this path.  for we would not be the first, nor the last.  yes, true enough, we often aim to forge our own history here in the US.  but sometimes there are lessons to be learned from having only watched others.  the UK just nationalized a bank, japan nationalized many banks, and there are a slough of other examples.  actually what we would be doing probably would not be called nationalizing due to the nation’s anafalactic allergence to socialist ideals.

in some way we need to get the financial sector on track.  its hard to put the patients back in charge of the asylum but order is needed.  unfortunately, all of the dollars spent on the financial industry in the name of the tarp plan are tax payers dollars.  in the end, we want a return on our investment.  we cannot just buy bad debt in a new federal-entity and wipe them out.  no, we need to get some percentage back from functioning loans and other revenue streams.  this is not a path of least resistance by any means, nor can it be the path of most resistance.  at least for our nation’s sake.