Saturday, August 29, 2009

Since Wall Street is Now a Casino, We Need a CA Solution for Forming Capital

If you know me well you know I have been preaching about the need to find new ways to form capital ever since Wall Street  abandoned its role of supporting growth in favor of the "Trader's" model during the Internet Crash of 2000.  My view is that this makes Wall Street a Casino and playing in that Casino is a fool's paradise.

Think about it- Wall Street lures in billions through 401K and other consumer and corporate investment programs that are set up to be about buying and holding. They pay their sages to speak to America about the value of long term investing...they hire brokers who spend all of their time telling customers to stay in the market!

Then they build these trading rooms that short every stock the 401K folks are holding as soon as there is any kind of bad news about any stock.  The cool thing (if you are a trader or making profits with traders) is that in this age of information, all one needs to do stay tuned to the computer screen to know who your friends are shorting.  In the old days (think Boesky/Miliken) you had to use the phone and form a conspiracy to get that kind of information and you ended up in jail.

So, what better business to be in?  I have friends making fortunes doing this and God Bless 'em because they are very generous with the millions they make shorting your 401K investment program.

But, if you are like me and your heart and soul and wallet are invested in developing cool new things with entrepreneurs and small companies, you feel a strong need for a capital formation system other than the big casino in NY since it does not help new companies any more.

Ironically those companies in need of growth capital are mostly in CA, so solving this is a CA issue of the first order.

I'll write more on this later, but the essence of the idea is for CA to pass legislation that supports its growth engine and does not rely on Wall Street.  We need to look to Asia and the Mideast for support from countries and organizations that appreciate product and service development and invest carefully for the long haul and based on revenues and revenue driven equity appreciation.

It all starts with the creation of a market and we have that.  It continues with freedom to make deals and minimal restrictions that support careful, deserved liquidity.  My ideas on this next time.

Friday, August 28, 2009

California Independence!

It is time for California to take matters into it own hands.  Again.  And this time for good.

I'll explain.  California is home to the three most important industries in the United States, arguably the only innovative industries developed in the US in the last 75 years- Entertainment, Information Technology and Life Sciences.  The rest of the US rides the waves set off in CA and poorly at that.

US Innovation happens in the Golden State because it is the only place with a 'prove yourself' culture that accepts all people based on what they are thinking and doing rather than where they have been and who they know. That culture saved the US through the Depression and WWII with the emergence of Hollywood Entertainment, the presentation of new ways and places. CA brought the US out of the backward culture of social serfdom and into the opportunities and upbeat outlooks of Camelot, the Sixties, Outdoor Sports and Sunshine- in short a culture of possibility. Later, the economic breakthroughs of  Internet technology and the delivery of new ways of using materials, physics, biology and chemistry saved US in the eighties, nineties and will do so again in this new century.

The East coast is parasitic, sucking on sweet CA success with bloated Government and Wall Street Casinos that add no value and prevent the development of new generations through a culture of entitlement, spendthrift habits and riverboat gambles on old ways of doing things.  Middle and South USA is plain ignorant, an abused sector with no imagination and little understanding of the power of possibility.

So it is up to CA to drag the US out of the economic mire again, but first there is some tie cutting to be done and some reorganization.  Each time we have inspired the world with innovation, the inevitable down cycle has hit US hard because of abuses in the financial sector and incompetence in the government sector.  The latest RECESSION is no exception.  We cannot call CA a center of innovation and intelligence if we continue to allow the thieves and incompetents to drag us down.

175 years ago I'd be calling for secession.  Today we don't have to.  Instead we can innovate and elevate. We innovate by developing a CA based financial system for feeding our engines of innovation- declare our financial independence from Wall Street.  We elevate by delivering a homegrown, progressive, populist, libertarian government that solves CA issues but is agile and intelligent AND comfortable to fade into the background when times are good.  Most importantly, we ignore the US government- yes, pay taxes and observe US laws, but stop counting on the US to do anything that is good and helpful; those categories will only happen in CA, so we must take care of things like health care and the other elements of the social contract.

Big thoughts and challenges I know, but this is easy when compared to doing what Google or Genentech or Tesla are doing.

So, What the Frac!   Let's get this done.  Now!

More on how in the coming days.

Tuesday, August 25, 2009

If you think paying $ to the Middle East to support our oil habits was bad, wait until the #s are in on what the current direction in solar panel conversion will do to us. With the low cost of manufacturing in China driving the market, we are about set to convert- Europe is way ahead of us- but the financial wins are are headed to Beijing.  Check out this article in today's NY Times.

Michael Shellenberger  of the Breakthrough Institute has been warning us of this direction and the need for the US govt. to enable the market for low cost solar and wind technologies with aggressive purchases from US energy providers. It's time to follow this direction.  See below:

Sunday, August 23, 2009

A friend asked my opinion on Obama's Presidency to date.

It is a terrible domestic start:

1. He has not done a single thing to advance the cause of the populist base that elected him.
2. He has been snookered over and again by Wall Street in a very embarrassing way. Worse, the financial result is the strengthening of nonproductive financial institutions and a system that abuses poor and middle class people and enhances a culture of entitlement. His revelling in that culture (trips to NY for a play and Martha's Vineyard) is embarrassing.
3. His health care initiative fails to take a fundamental position (to wit, a premise- government provided health care for everyone not currently covered) and the destruction and likelihood that nothing gets done is reminiscent of the failures of Clinton on this very issue (not surprising given that Clintonites are running the show)
4. He has allowed the conservatives to steal the populist initiative; something that will be hard to recover
5. He has allowed his most potent weapon,, to atrophy, an inexcusable error.

Obama has had some success- stimulus package, Sotomayor, foreign policy- but the high profile failures and lack of understanding who got him elected and not advancing critical initiatives on their behalf is mind boggling.

I hope he wakes up in time, but I am afraid we misunderstood what he meant by Change. We thought he meant to Change some terrible policies and restore the American Dream. Apparently, HE meant to Change the system to a more cordial bipartisan one...he has tried and the other side only views this as weakness and an opportunity.

Obama's need to be liked is crushing his every initiative.

Hopefully his desire to be like Lincoln will allow him to (eventually) be like Lincoln who floundered before he woke up and steamrollered everything in the path of his initiatives. Unfortunately BO does not have a John Hay- strong young patriotic intellectual - around to urge him to do this.