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Archive for October 2009

Christmas 1979 versus Christmas 2009

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It is a little early to think about the upcoming Christmas holiday season but while I take a break from the business topics, I thought it might be interesting to compare Christmas of 30 years ago to today. 

Let’s begin with what was not in stores or under the tree: 

  • Cell phones – I phones, blackberry etc
  • Garmin or other GPS systems
  • CD’s or CD player and definitely not an I Pod or other MP3 player
  • Laptop computer
  • Wireless internet card
  • Internet (Al Gore did not invent that yet)
  • Xbox or Wii
  • Cordless phone (900 MHz phone approved by FCC until 1994 and still was prone to static)
  • Sony Walkman – introduced in Japan in July 1979 might have been under the tree in 1980
  • Fruit roll ups (early 1980’s)
  • Commercially available Satellite radio
  • Rubik’s Cube (1980)

 What was under the tree back then?

  •  Radio Shack TRS80 computer
  • A Coleco hand held football game
  • Simon, the memory game by Milton Bradley
  • Star wars action figures, Empire Strikes Back released in May 1980
  • Mattel’s See ‘n Say
  • Incredible Hulk Action figure (TV series)
  • Space Lego
  • A Hot air popcorn popper for Mom
  • A microwave oven as prices become more reasonable
  • #1 LP Album’s by: Billy Joel, Barbara Streisand, Bee Gee’s, The Blues Brothers, The Doobie Brothers, Donna Summer, The Eagles, The Knack, Led Zeppelin, Rod Stewart and Supertramp (For the week ending 10/31/09 only Barbara Streisand still is represented in the top 20 with “Love is the answer”)  I’m stunned by that too!

I hope you enjoyed this week’s topic.  Have a good week.

Written by pacelinebiz

October 30, 2009 at 10:46 pm

Posted in General Interest

Managing your time better

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We all want to get more done and have more free time to spend doing what we want to do.  How do we do it?  It seems we are all so busy and we do not have enough time.  Actually we have all the time there is.  Sixty minutes are in every hour, it is how we use the time that is important.  This idea is from the beginning of a very good book on managing your time that I highly recommend.  It was originally published in 1972 and updated most recently in 1997.  The 3rd edition of The Time Trap written by Alec Mackenzie is available for less than $15.00 at most large retailers.  Mackenzie is an accountant so I am perhaps a little biased by his analytical and systematic approach.  In his book he listed twenty things that waste your time at work.  In hundreds of recent studies and opinion surveys six of his original twenty are included on the list of the seven consensus time wasters.  To be brief I will list Mackenzie’s six time wasters and a few paraphrased bullet points for the causes and solutions.

Management by Crisis or “fire fighting”

Cause: Failure to anticipate & develop contingency plans         

Solution: Prioritize potential problems and list solutions

Cause: Treating problems as crises (Not a crisis for you)         

Solution: Respond appropriately, ignore if possible or delegate

Cause: Unrealistic time estimates    

Solution: Build in a cushion of 20%

Telephone Interruptions

Cause: No plan for handling 

Solution: Screen/delegate/consolidate  call back when good for you

Cause: Inability to terminate conversations 

Solution: Develop techniques: use timer, cue an ending, be candid

Cause: Socializing to avoid routine, dealing with urgent

Solution: Keep your priorities in front of you

 Drop In/Unexpected Visitors

Cause: No plans on how to handle 

Solution: Arrange appointments & have a no drop in policy

Cause: Ego, feeling of importance 

Solution: Don’t overestimate the importance of your availability

Cause: Open door policy

Solution: Have planning/quiet time, open only means accessible

 Procrastination

Cause: Inability to identify

Solution: Ask others to help, easier for other people to recognize

Cause: Thinking “I work best under pressure”

Solution: Pure rationalization, no one works better under pressure

Cause: Lack of deadlines 

Solution: Use a deadline for major tasks, develop sense of urgency

 Meetings

Cause: Lack of purpose/agenda 

Solution: Never have a meeting without agenda or written purpose

Cause: Wrong people/too few/too many 

Solution: Have right people arrive when needed dismiss when done

Cause: Not starting/ending on time 

Solution: Stick to schedule

 Socializing

Cause: Your need for the occasional mental break

Solution: Go for a short brisk walk, don’t bother others not on break

Cause: Personal affinity for socializing 

Solution: Stick to priorities, socialize with others who are on break

Cause: Poor physical location

Solution: Consider relocation/escape to unused quiet area if possible

I hope this encourages you to look how you can manage your time more effectively.  It is an investment that can pay nice dividends.  Most time management experts claim that you can save up to 2 hours per day by managing your time.  Even if it is only 1 hour that is a huge boost in your daily production.  Good luck.

Written by pacelinebiz

October 26, 2009 at 9:25 pm

Posted in Business

Random thoughts from a deliberate mind

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  • The wheel – The best thing BEFORE sliced bread.
  • What’s so great about sliced bread?
  • If you are sick, at least you have your health… umm never mind.
  • Why is it called a forecast if it is for 5 days?
  • What is the day after 2 straight days of rain? ANY day.
  • Why is the weather man on TV called a meteorologist – instead of a no good stinking liar?
  • If Will Rogers never met a man he didn’t like he either didn’t try very hard, didn’t get out much or never met a politician.
  • If 3 strikes are called an out in baseball and a turkey in bowling what are 3 lightening strikes called?  Really bad luck.
  • Maybe it’s me but I get a little uncomfortable when my Doctor talks about “practicing” medicine.
  • Is the completion of a luncheon call a dungeon?
  • If there are 24 hours in day, 7 days in a week and 52 weeks in a year why is there always one on every crowd?
  • What do you call a guy who hits a little white ball and chases after it in the woods?  Rich.
  • If someone who has a positive outlook is called an optimist and a person who has a negative outlook is called a pessimist, why don’t you call someone who has a neutral outlook a Swissimist?
  • If diamonds are a girl’s best friend and dog is man’s best friend what does that say about the man?
  • I believe that if a baseball pitcher has a complete game it can be called a 9 inning outing.
  • “All’s well that ends well”.  Using that logic you could be confined to a bed your whole life, be miraculously cured, step out into traffic, get killed by a car and your heirs win a million dollar lawsuit.   Aw, it sure is a shame about Jimmy but we did win that lawsuit so “all’s well that ends well”.

 Next week we’ll get back to business.

Written by pacelinebiz

October 19, 2009 at 8:53 pm

Posted in General Interest

Inflation wrap up

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In the summer of 2008, right before the current recession hit with a vengeance, all signs were pointing to inflation hitting levels not seen since the early 1980’s.  If you think back, oil prices were at record high prices and the demand for food was pushing the limits of supply.  Food prices were also increasing at higher rates than seen in many years.  There was much speculation that we would encounter inflation above 6% for the first time since 1982. To add to inflation worries we now have had a year of money printing and a record deficit to stimulate the economy.  

To wrap things up on our topic of inflation let’s look at the effects of inflation on your purchasing power.   Since 1983, inflation has remained at a relatively low rate.  Other than a jump in inflation in 1990, the inflation rate has remained below 5% since 1983.  After 1991, the highest annual rate of inflation has been 3.39%.  See table below*:

Year

Rate

 

Year

Rate

2008

3.85%

 

1990

  5.39%

2007

2.85%

 

1989

  4.83%

2006

  3.24%

 

1988

  4.08%

2005

  3.39%

 

1987

  3.66%

2004

  2.68%

 

1986

  1.91%

2003

  2.27%

 

1985

  3.55%

2002

  1.59%

 

1984

  4.30%

2001

  2.83%

 

1983

  3.22%

2000

  3.38%

 

1982

  6.16%

1999

  2.19%

 

1981

10.35%

1998

  1.55%

 

1980

13.58%

1997

  2.34%

 

1979

11.22%

1996

  2.93%

 

1978

  7.62%

1995

  2.81%

 

1977

  6.50%

1994

  2.61%

 

1976

  5.75%

1993

  2.96%

 

1975

  9.20%

1992

  3.03%

 

1974

11.03%

1991

  4.25%

 

1973

  6.16%

*Source Bureau of Labor Statistics 

 As long as inflation is stable and modest, wages can be adjusted in step with inflation and purchasing power is not affected.  Typically, wages adjust on an annual basis so if inflation is growing rapidly purchasing power erosion will occur.  Inflation can be viewed the same way as interest but in reverse.   Here are few facts regarding inflation’s effects on purchasing power.  An item costing $1.00 in 1973 would cost $4.91 in 2007 due to inflation’s effect.   Let’s compare inflation’s impact on purchasing power over several 10 year periods. 

An item that cost $1 in 1973 would cost $2.31 in 1982

An item that cost $1 in 1983 would cost $1.45 in 1992

An item that cost $1 in 1993 would cost $1.27 in 2002

An item that cost $1 in 1998 would cost $1.29 in 2007

That $5 dollar bill in your pocket in 1973 will spend like a single in 2007.  A twenty from 1973 is now worth about 4 bucks. A fifty is worth about $10!

In the “low” inflation era from 1985 to 2007 the purchasing power of a dollar was reduced to 52 cents in 1985 dollars. 

Stated another way, the item costing $1 in 1985 had almost doubled to $1.97 by 2007. 

Many experts predict that once the recovery begins in earnest we will probably see higher inflation. They believe the increased money supply from the US stimulus and stimulus packages from governments around the world will re-ignite the inflation fire that was temporarily put on hold. One of the few upsides to inflation is paying back debt in devalued dollars.  After the credit bubble of 2008 there is no shortage of individuals and companies with lots of debt.

For next week’s blog we will take a break and discuss something a little more light-hearted.

Written by pacelinebiz

October 12, 2009 at 8:10 pm

Posted in Business

Inflation – part 2

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Since 1973, there have been 4 major spikes in crude oil prices.  3 of those spikes have coincided with high inflation.  The 4th spike occurred in 2008 and has been interrupted by a deep worldwide recession.  In 1973 an oil embargo increased the price to about $40/barrel in today’s dollars which about doubled the price in a matter of months. In 1979 unrest in the Middle East caused the price to rise to about $106/barrel in today’s dollars – a record not broken until early 2008.  By the late 1980’s the inflation adjusted price/barrel had dipped back down to below $40/barrel.  By 1990 the first Gulf war had caused another spike in prices and they reached nearly $60/barrel in today’s dollars.  During the 1990’s the actual price fluctuated around $18 to $22/barrel as the inflation adjusted price decreased.  Even with the steady rise from 2000 to 2005 the price was lower than what was paid in the 80’s – adjusted for inflation.  Please visit the website below for a chart of Oil Prices from 1946 to the present in current US dollars. (Click the “back” arrow on your browser to return to the blog after viewing the chart)

    http://inflationdata.com/Inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm

 The previous 3 periods of supply shocks that occurred with crude oil had their origins in political unrest rather than an identifiable monetary reason.  The recent increase in crude oil prices may be a classic case of Demand-Pull Theory or “too much money chasing too few goods” At the Federal Reserve Bank of Boston’s 53rd Annual Economic Conference on June 9, 2008, Fed Chairman Ben Bernanke gave some interesting facts regarding the demand for oil coming from non industrial countries.  In his speech on the topic of inflation he stated; “Rapidly rising prices for globally traded commodities have been the major source of the relatively high rates of inflation we have experienced in recent years…”   He continues by saying, “In particular, it seems clear that commodity prices have been importantly influenced by secular global trends affecting the conditions of demand and supply for raw materials.  We have seen rapid growth in the worldwide demand for raw materials, which in turn is largely the result of sustained global growth –particularly resources-intensive growth in emerging market economies.1  And factors including inadequate investment, long lags in the development of new capacity, and underlying resource constraints have caused the supplies of a number of important commodity classes, including energy and metals, to lag global demand”

  • 1According to one study, if the share of world trade and world gross domestic product for non-industrial countries had remained at its 2000 levels, then by 2005, real oil prices would have been 40 percent lower, and real metals prices 10 percent lower, than they actually were (Pain, Koske, and Sollie, 2006).  Since 2005, continued strong growth in the demands for resources of emerging market economies have likely put further considerable upward pressure on commodity prices.  For contrast, the demand for oil by members of the Organisation for Economic Co-Operation and Development (OECD) has been essentially flat since 2004.  The 30 member countries of the OECD are: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece,  Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg,  Mexico, the Netherlands, New Zealand,  Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.

I will end this week’s discussion with another chart (please visit website provided below) that gives a good picture of the demand pull theory as it relates to scarcity in the oil supply relative to demand for crude oil.  The web site below provides evidence of the supply and demand forces at work.  In the 1970’s crude oil production by OPEC nations was at roughly 30 million barrels per day. By the late 1970’s through most of the 1980’s it had plummeted to only 15 to 20 million barrels per day.  To further reinforce Chairman Bernanke’s statements, the chart of oil production shows OPEC production since 1973 and in particular shows that production has been on a steady general upward trend since the late 1980’s with some disruptions in production occurring during the 2 gulf wars. This general steady increase in production has not reduced the price as demand has been greater (as referenced by Chairman Bernanke’s comments).  The cause of the dip in production in the late 70’s until the early 80’s had much to do with the Iranian revolution and the Iran-Iraq war.  During the war, production was down 6 to 7 million barrels a day.  Even today, both countries production is less than pre war levels accounting for about 3 million less per day. (Click the “back” arrow on your browser to return to the blog after viewing the chart)

http://www.wtrg.com/oil_graphs/PAPRPOP.gif

 The lesson to be learned from today’s discussion is that we are experiencing a brief respite from high crude oil prices due to the recession.  Unfortunately, once world demand picks up when the recovery begins we may see crude oil at $100 per barrel or more and gasoline prices around $3.50 per gallon.  My advice is to take action now to be better prepared for higher fuel prices in the not too distant future.

 Next week we will wrap up our look at inflation by taking a look at the effects of inflation to your purchasing power.  It has a dramatic effect even in times of “low” inflation such as the past 25 years.

Written by pacelinebiz

October 2, 2009 at 4:26 pm

Posted in Business