Are Your Lights On?

I’ve always appreciated juicy stories- you know the kind you listen to with your jaw wide open anticipating a fabulous ending-but I’ve never been a fan of scary ones. Those usually end up making me paranoid in the early hours of the morning and have me sleeping with all the lights on. However, I never imagined one of those scary stories being about my future, much less about an issue relating to oil!

My ears perked up during one of Daniel’s last segments, as a guest voice suddenly brought clarity on a difficult topic. I saw my life flash before my eyes, and yes, it was an OMG moment - let me explain.

Oil expert Matt Simmons was on with Dan and exposed the hard truths about oil. Now of course, I’m not an authorized judge of character when it comes to analyzing oil experts, but the reason I call Mr. Simmons an expert is because he made such a complex subject easy to understand.
Here is the thing, seriously read on carefully. Have you ever heard of Kübler-Ross’ 5 stages of grief? In case you haven’t, let’s briefly re-cap.

First, there is the stage of denial. We all know what this is. “No, we are okay on oil supply and production” – Yeah, that’s a lie!

Then there is that really attractive anger stage that involves cursing at the oil as if it could ever respond, c’mon we can’t stoop to this pathetic stage.

Next we have good ol’ fashioned bargaining, which goes a little something like this “No really, we have a couple more years left until we should really worry about a back-up plan for oil.”

We can't forget Xanax’s best friend, the depression stage. This is essentially losing hope and living in a state of fear.

Well, the 5th and final stage kills all the lies and brings you back to reality--the wonderful stage of acceptance. This is where Matt Simmons comes into play. He has studied and lived in the world of oil. He has accepted the truth, which is that we need to stop using precious oil!
The problem is not oil scarcity. The problem is the drilling locations; there are so many parameter facets to consider that it simply wouldn’t be worthwhile to do off shore drilling. Not only this, but who in the heck is going to operate the machinery, and is anyone keeping in mind how costly this is going to be? Presidential candidates are presenting their future solutions to defeat the oil crisis, but are they being realistic?

I find myself agreeing with Simmons, it’s all a bit for political publicity. Just like every other issue constantly upheld in the presidential debates.

It’s simply not realistic ,you know? We can’t possibly build oil rigs right now! Last time we did that was, whoof, back in WWII and that was accomplished by shutting down the economy. If we shut it down now, we will fall apart. As a leading country, we can’t afford to fall apart.

Don’t live in those dangerous stages of grief, learn to accept the truth. Simmons couldn’t have been louder and clearer, there is no other way out. We need to stop digging and use less oil. Same idea goes for the gas prices I explained in the last blog, the way to solve increasing prices is by making more money. Making more opportunities and improving your status.

Bottom line is . . . it’s not just another scary flick keeping me awake at night. Worrying about the future because it involves me and will ultimately affect my generation is more than enough to keep this chick sleepin’ with one eye open! So tonight, don’t stop to wonder why my lights are on, because I’m totally freaked out!

When Life Gives You Lemons

4p.m. usually finds me winding down the day and eating a long over-due lunch. Daniel, on the other hand, is adjusting his headphones, getting a fresh glass of H2O, and waiting for Peggy’s countdown to start his show…

I was ready to hear about the market, or what the Fed is talking about these days. I had Google ready to start researching questions I’d have during Dan’s monologue, and a separate notepad to write down notes on the Money-lingo. But to my surprise, Daniel brought up a topic that I truly understood. He exposed what many are talking about but offer no real solution to. Gas prices!

Ok. Seriously, OMG I don’t know one person who isn’t affected by gas prices! Whether you drive or you’re driven, everyone around me is wondering, “When will driving be affordable again, and when the heck will the gas prices go down?” The truth is, as long as people want to keep getting from point A to point B, and keep wanting to get a tan at point C, gas prices will keep going up. C’mon, are you really that surprised? Everybody knows this. The question isn’t when will prices come down, the question is what can I do about it?

Follow me for a minute . . . if you sold lemonade for a living, and every summer you took note that your inventory sold out due to the intense heat, it would be logical to increase prices in the summer to bring in the most profit, right? Well, gas prices are the same, except it’s always summertime in gas-land, and gas is selling big no matter what the prices are. Whether you drive a beat up boat of a car or a diesel Dodge truck, you still need to move yourself around, and will learn to manage your money around gas prices.

When I saw the movie, I Am Legend, the whole theatre gasped when the futuristic prices at the pump started at $6. Forget the whole end life as we know it, and how humanity lingered in the hands of Will Smith, right? It shocks me that gas prices seemed to scare everyone else so much more! I didn’t really find myself gasping, because truthfully, it seems like pure logic. $6 may seem cheap in a couple of years!

So what can a poor soul do in such a powerless situation, you ask? Well, complaining isn’t filling up your tank honey, and expecting the money experts to rectify the situation is about as likely as money growing on trees.

Daniel made it a point to say that what you should be doing is learning how to not care. Yes, I said it, who cares about the gas prices! I’m still going to visit my brother in Hempstead, a good 45 minute drive away. I’m still going to go from the office to school, and if the weather isn’t Houston-like (humid & sticky & gross) I’ll take a drive out to Galveston. Do I have an electric car? No. Do I car-pool? No. Do I ride Metro? God no, I am horrible with buses! What I do have is Daniel’s theory, focusing on making more money. (Yup, cha-ching!! Show me the money, right?)

Now, Daniel has the sufficient means to fill up his tank quite frequently without a real problem, but for us students trying to make a dollar out of our chump change, and for those families car-pooling, listen up!

Talk to your supervisors and see how you can make more money. If paychecks increase, then gas prices will be no match for us. Take side jobs, inform yourself! Improve the quality of your work performance. That’s how you forget about gas prices!! Don’t ask for raises, ask for opportunities. What else can you as an employee do to be more successful and earn more money? Think about it.

Next time you find yourself worried about your tank running low, remember what to do when life gives you lemons! You sell them in at growing pace, keep your prices up, look for different ways to improve your lemonade with fruits and additives, and for God’s sake, keep making lemonade! It’s hot outside!

Fear is a State of Mind

"I have learned over the years that when one's mind is made up, this diminishes fear; knowing what must be done does away with fear."
– Rosa Parks

Daily life has changed drastically over the years. Ever since 9/11, things have been chaotic, and it’s become a necessity to look over one’s shoulder. I turned 16 when 9/11 happened and I instantly knew that by my 17th birthday, things would be vastly different within our country. Fear has been instilled on Americans so much that we willingly enforce the banning of liquids as carry-ons on our airplanes will somehow protect our freedom from the hands of terrorists.

Fear however, does more than cause an inexplicable paranoia. It calls for precautions and defense mechanisms. Having a great friend of mine in the USMC, I have come to understand a different side of the war. Although some spend time protesting against war efforts, it is essential to understand that the war is being kept away from home. In an ideal world, a country wouldn’t have to sacrifice lives in the name of freedom.

Among the skeptics, patriots, and enemies at large, there exist minds born to analyze such heavy issues. One such mind is Arnaud de Borchgrave, who Daniel had on his show a couple weeks ago. He has been an authoritative journalist for sixty-two years, has covered eighteen wars, and has written for publications including the Washington Times. As impressive as his journalistic career is, it is not Borchgrave's main focus. He serves as the director and Senior Advisor of the Transnational Threats projects at the Center of Strategic and International Studies. It’s a mouthful of a title because it’s a handful of an occupation. Borchgrave's project was initiated after the 9/11 terrorist attacks. He is an expert in U.S. foreign policy, the Middle East, counter-terrorism, cyber space, and organized crime.

Whether we realize it or not, the conflict in the Middle East affects our daily lives whether we realize it or not. Borchgrave proves how fitting Newton’s Law is, which states that for every action there is an equal and opposite reaction. The main objective as Director and Senior Advisor is to help the current and future president strategize and help prevent future attacks from happening. At the moment, he values Iran and feels that the Bush Administration should be focused on maintaining its stability because they are most likely waiting to see who becomes the next president. He wants to prevent Iran from blowing up and causing the next regional war. He feels that this was an ideologically well motivated war where good intelligence was ignored.

Borchgrave commented that the economic status quo is out of whack due to companies increasing prices. Meanwhile, fortune 100 CEO’s are working on an 11 million dollar salary averages. This only increases the gap between the poor and the mega rich. This is a truth I'm sure we are all familiar with. Borchgrave currently has 4 million dollars in retirement funds, but due to the market conditions, he is currently not moving any funds because at this point, financial advisors don't know what move to make next.

The reality we all know could change when the next president comes into office, and right now Borchgrave isn’t too confident with John McCain. This is primarily because McCain’s campaign speeches do not consist of realistic proposals if not they ramble and overuse the word “etcetera.” As Daniel says, Borchgrave may not say things we like to hear, but more than often he is right on the money.

Changes Are Happening Now

“We must become the change we want to see.”
-Mahatma Gandhi

Hello BizRadio listeners! As you may have already noticed, this blog is not under the same maintenance anymore. I’d like to utilize this first entry to recognize the wonderful human being who began this blog, Cuc Roettele. Miss Roettele served not only as Dan Frishberg’s Executive Assistant/No. 1 Fan, but also as a wonderful co-worker and friend of the BizRadio staff. Not to mention, an amazing mentor for my writing.

At this moment, I would also like to formally introduce myself. My name is Marylu Rodriguez, I’m 22-years-old, and a firm believer that everyone has a story. I have been entrusted with writing about the sound of your money growing, and I hope I can offer another perspective on Dan’s amazing expertise. Although I won’t be able to fill Miss Roettele's shoes, I intend on leaving fine footprints of knowledge within my future readers. My goal is to become a journalist and bring light to issues that remain unnoticed in the shadows.

My journey with BizRadio started on a hot summer day in 2006. Elisea found me at the Houston Polo Club, where I live and, at the time, worked with my father. My father is a horse trainer who takes great care of Polo horses. I must’ve been wearing the oldest shirt I owned that day, but nonetheless - Elisea struck up a conversation with me. We talked about education, my goals, and most importantly my family. I shared that I was a Broadcast Journalism major and that I took a lot of pride in helping my dad on his ranch. Before I knew it, the conversation turned into an interview, and the next thing I knew – I had an internship set to start that Monday. The rest of the story is easy; I ended up working alongside some of the most creative and efficient people I’ll ever meet.

Now present day, I have come to the great realization that the staff of both BizRadio and FJSK Advisors has become a unity – an extended family if you will. We co-exist together like any other family would, through difficult times and the most spontaneous moments we’ll probably ever live. I’m surprised our IT department puts up with us, and at the same time very thankful for their patience. We depend highly on our technology to broadcast efficiently and carry out our company motto being, “Our success is directly correlated with the number of people we serve, and how big our impact is on their lives.”

We wish Miss Roettele the best in her future, and this blog is evidence that she will be greatly missed. Stay tuned to read about the sound of your money growing.

More Questions!

Investors who don't pay attention to what foreigners do will be completely thrown off.

The question everyone is asking . . .Is this the bottom?

Dan says no. He says that there will be a severe drop further and then what? After all of the euphoria, more people will be laid off and the economy will continue to slow down. The only thing that is still a wild card is the foreign money sitting on the sideline, waiting while our dollar is circling the drain. When the dollar stops falling, it's going to free up this money that has been waiting, and these foreigners are anxious to scoop up all of this real estate, stock and companies, taking advantage of all of these bargains in the United States.

When the dollar starts to get stronger, there will be a giant rush of assets into the United States and it will make everything go up and that would change all of the things that everyone normally expects.

So if I have to base it on what Americans do, I would say no, this is not the bottom. There is more room because Americans are still selling. Demand and buying power is strong and staying strong for the moment. Americans are still willing to sell everytime there is a lil bit of a rally. But if the foreigners come in here and start buying everything, if that's what's happening right now, then they can overpower that demand for a while and then the sellers will stop and hold out for better higher prices, and we can have another year of bull market.

So you can never tell what those foreigners will do. They are part of the game and most of us don't know how to could them in our math.

What do we need? If it is up to Americans to make the stock market rally, I think there are too many bulls, not enough bears--we need capitulation. We need everyone to just give up and sell out, so that it goes down far enough, so that it will be a bargain. Use up all of the supplies--historically, this is how bear markets have ended here, in the United States, with the exception 2006 and the bond market.

Listen to more here.

Frozen by Fear

Many people have been asking Dan if it is way too late to protect themselves. Are you sitting out there thinking is it too late to protect your savings? Maybe you shouldn’t have been so heavily invested in stocks? Are you afraid that you’ve placed yourself or your family in a horrible situation?

My MoneyMan says that it is still a matter of pride –that it would be even more humiliating to make the price move, to protect yourself, and just as you do it, people are running and they start buying and the prices go up and you get whipsawed—and this would feel horrible! Is that what people are really worried about?

Personally, losing my life savings would be devastating enough, but being worried about how horrible I was going to feel, how tiny and smashed my ego would be . . . silly, but simple humanity. The idea that the same idea hits the whole herd at simultaneously and drives them to act out of panic and fear is sadly true.

Dan’s been watching people and the markets for over 50 years, he believes that all of us, as a group, are connected by more than the things we say and the thoughts we have, more so than a strict psychology course could ever teach us in college . . . millions of people around the country are thinking the same thing at the same time--I wish I would have sold these stocks a long time ago, now if I sell them, it's going to turn out to be too late. So what do they do instead? Nothing. They are paralyzed, like deer in headlights.

This one is simple, according to the MoneyMan . . . If you buy more stuff at the bottom, it will make your money back for you and you won't have to lose any money. This is why he’s pretty convinced that we will go a lot lower, based on all of this market x-ray stuff that he does (mostly about the intensity of supply and demand).

It is quite straightforward if you ask me. When there is no demand for stock, the price is going to go down. How can the price of something go up when there are no buyers, right?

When sellers want to sell, and there aren't buyers for them to sell to, the sellers have to cheapen the offer, they have no choice but to take it down . . . the more desperate they are, the more they will bring it down. That’s what Dan says they are doing right now, it’s basic supply and demand.

Now hold on, here's the part that you don’t see.

Demand in the market is way lower than the last time we were down here at this level, which was just a couple of weeks ago, back in January . . . and supply seems to be much higher. The truth is that nobody wants to buy, but lots of people are getting more and more anxious to sell, people are less willing to buy stocks, more eager to sell stocks than the last time we were at this level. You are above the lows in January, you are way above the lows of last July, (as far as the S&P 500 anyway). You have prices still higher at the moment than those times, but demand AND supply are way worse.

Here is the psychology factor: There is an insidious trick that nature is playing on you right now, many of you, not all of you, but according to my MoneyMan, who has been studying this particular thing in bear markets for 20 years, the reason we do this is because . . .

Listen for yourself at BizRadio AM1110 for the sound of your money growing.

To hear this particular podcast, click here.

What's Goin On?

"May you live in interesting times," is an ancient Chinese blessing and/or curse, depending on one’s personal perspective.

Is there a crisis occurring in our economy today? John F. Kennedy once noted, "when written in Chinese, the word "crisis" is composed of two characters--one represents danger, and the other represents opportunity."

Could our choice for president determine our prosperity for the next few years, decade or ever the next generation? I really enjoyed Dan’s last segment with Dr. Laffer where they discussed “HillBama” and the potential effects on our economy.

Dan says that any bad market right now is not being caused by the anticipation of HillBama. He also thinks that if they do get into office, this will cause people to speed up and act quickly, which in turn will make the economy look better when the markets start to go up because everyone is getting ready. Dr. Laffer explains that even if HillBama wins in November, it won’t be until august that congress will start to implement big pieces of legislature, which leaves us looking at new agendas and operations by Jan 2010. Dr. Laffer shares some convincing evidence to back this theory, citing Kennedy, Reagan, and even Harding and Coolidge’s campaign.

Whether we are blessed or cursed, we definitely live in interesting times and how we choose to react to what happens is how we ultimately define our lives.

Listen to the entire podcast here: The MoneyMan Report