Help GM Survive Their Loan is only 1% as Large as the Bankers Get

There are three auto makers in our county.  You know – GM, Ford and Chrysler.  (I own small amounts of GM and Ford Stock).

You know that the banks received 1.5 Trillion dollars is support payments.  It will probably double by the time the currently undervalued assets are purchased by the Treasury, courtesy of taxes paid by you and I and loans from the Chinese.

GM is looking for around $20 Billion.   Give it to them.   No brand can outlive the decline in value of its name due to bankruptcy.  There is talk of taking the most valuable ‘good assets’  of GM and selling them to a new company, Good GM, and letting the Bad GM’s $70 Billion in so called bad assets be sold off – liquidated – they say.

I am truly angry over the inequities now coming from my favorite president of all time, who I supported wholeheartedly, and do support.   Why, for a pittance in today’s money ($20 Billion), let a perfectly good manufacturing company go down the tubes  while supporting pompous, feckless bankers to the tune of $1.5 to $3.0 Trillion?  Here I”ll say it: “What the #$%^&*(@#$”.

Our local bank, Sun National, got $89 Million in subsidies.  What??  The money given to banks is pervasive.  Surely Sun National Bank did not threaten the economy.

Surely we Americans are appropriately angry about the misuse of our money.   In days gone by the few bankers who created default credit sways might be tar and feathered in Boston or New York Harbor, satisfying our call for revenge and punishment.  Not today, they just change banks and stay in there mini-mansions.  Polls say 70% and more of us oppose support of GM.  Why?  The banks will still get away.  Letting GM go, and creating a hole in the car market is like hitting ourselves over the head with a lead filled bat.  Nuts.

So what is the reason or reasonableness of tar and feathering our car companies.   This act, letting GM go into bankruptcy, will surely benefit its competitors.  What competitors?  Toyota, Nissan, Hyundai and the new Indian and Chinese cars headed this way.   More American Jobs go overseas. 

Certainly these fellows in the white house did not require the banks to come up with a survival plan.  Rather, those who govern, first the Bushites, panicked and handed out near a Trillion Dollars.  Now with plenty of time to think it through, the Obamerites will give another $1.5 Trillion to the financial industry, and not a drop for the car companies.   What in the world are they thinking - worse - what in the world are they doing?

Who cares about a miserly $20 Billion anyway?  The battle over GM is just a smoke screen protecting the fleeing bankers.  These men and women (although I know of no women identified as rascals) are the modern Merchants of Venice, The Pirate Princes of Wall Street.  First they take our money, then plead guilty, then point guns at our head and take trillions more.

Only in America.

It it was not so sad, I’d laugh. 

Bob

AIG Bonuses

Mitch McConnell is full of baloney and much more.  Use your imagination.

Stop these bonuses now.  How?

1. Just don’t pay them, break the contracts that exist, and let the so-called good performers sue.  This will drag on for years with the 80% stockholder able to keep coming up with new ideas for lawsuits.
2. Call an emergency stockholders meeting and either clean out the board of directors and the management or make it clear they get no compensation if the bonuses are paid.  We, me and thee, are the stockholders.  Our government owns AIG.  Use the power.
3. Form a stockholder Committee to review loss Claims  to AIG from companies that received direct bail out money from you and I.   Was this loss claim included in the request for a bail out? 

Now come President Obama.  Your announcement today is well taken.  Pursue any and all legal means to stop the payments is a must. 

Why are we –  the only practical stockholder of AIG – not able to fire out the people who are both paying these bonuses and loss payments, or get darn good reasons to keep them?   Why not replace the board and the management. 

The people who get the payments of bonuses are going to quit because they know they don’t stand a chance of continued employment if they do take the payments.

Mitch McConnell must be on the payroll to say let the payments go through and look to stop it in the future.  Is he nuts?

An angry Bob Johnson

My Dream Job: Bucking Bronco Riding

So Cathy and I and her sister and brother-in-law went to the Arcadia, Florida Rodeo March 13,09.  We had a great time.

My Dream Job

Start to finish this cowboy got involved, took a few bounces and made it look like a piece of cake.

Reality

New jobs sometimes give us a jolt.   A few newbies get a jolt in the early phases of the learning curve.  Hold on to your hats.  These boys take a shellacking. 

When things don’t go as planned sometimes we have to just get up and keep at it.  If you want to see persistence in action rewatch the third cowboy.  I’d love to have him working for me.  Not as smooth, but my goodness he is persistent.

 

Best of Both – Learn How to Hold On To Your Hat

And finally there are a couple of seasoned riders who teach us the secret to work and to life –> “Hang on To Your Hat” and you’ll be a winner.  Watch closely as both of them get in sync with the horse they are working with.  Then let the horse kind of unwind and help them dismount gracefully.  What a way to end the day.  Celebrate.  You will too.

I’m glad I’m a coffee guy and not a cowboy.

Bob Johnson

Inbound Marketing From Hubspot

There is a great new post on Hubspot about inbound marketing.  Good for all coffee retailers who have web sites.  And every coffee retailer must have a web spot, and a blog.  Go for folks.

Here is the link: Inbound Mareting from Phish

If you want some ideas for Improving Your Profits please go here.

 

Bob Johnson

Warren Don’t Worry It’ll Be Ok

This is what I’ve read is an economic Reset.  It is a Reset to:

• Moderation
• Savings
• Future Rewards or Deferred Gratification
• Less Instant Gratification

The effect of the paradigm shift on auto sales is the most dramatic example.   Americans will have to work through the inventory of cars sitting in their driveways. before auto sales pick up.  Clearly there are many more cars than drivers.  F150’s for bankers, sports cars for the kids or weekends and small motor homes for football games are just a few of types of vehicles we now own.  Auto sales will slumber until we either convert these vehicles to daily use,  or get rid of them.  Only then will we begin to replace aging cars with new ones.

So settle down Warren.  Last Sunday Mort Zuckerman of US News and World Report appeared on NBC’s Meet the Press.  He was in a panic.  “Someone has to fix this problem” he exclaimed.  I know you Warren are not that paniced but using words like a shambles to describe the US economy is not appropriate. 

This is America.  We are a strong people, focused on the future (perhaps a bit too much since many folks missed the signals of impending economic trouble) and we will recover. 

My business, Kaffe Magnum Opus, can bring sunshine and promise to your life.  Think happy thoughts.

The rediculous run-up in the price of oil caused the housing slump, although it is not identified as a cause by many.  Because house prices rose so fast, commuters began to move further and further away from their jobs in order to afford a home.  The commute expanded and then got clobbered by gasoline costs.  So there were fewer buyers for homes in the distant suburbs.  This worked it’s way into the mainstream housing market and kaboom.

Summer Time is coming, trees are turning green, warmth will help us unlock the lids on our wallets.

Lets get going.  Start fixing the things around you within your control and stop grieving.  We are where we are and we are here as a result of all that we have done before.  We steered ourselves into this corral.  We can steer ourselves out again. 

Bob Johnson

I Have The $420 Billion Answer: National Bank of America

The answer that everyone is looking for to solve the banking crisis is to not give money to failed banks, rather merge the bank into a new national bank, then  wait for the mortgage asset values (and other so-called toxic assets) to restore to true value and then give the value back to individual and small business taxpayers in the form of stock in the new solvent bank.

Here is how it works.

The Treasury forms a new bank; call it the National Bank of America.  If a bank is found insolvent then merge it into the new National Bank of America (NBOA).  The capital of the NBOA is the full faith and credit of the United States of America.  No money exchanges hands.  That is, there is no bailout.  The incoming insolvent bank has a negative net worth, but that is not relevant now as the US owns the former bank.

The problem assets will return to current market values and at that time the insolvent bank, now solvent, is given back to American Tax Payers in the form of common stock pro rata to the ratio of their income taxes paid while the bank was held by the NBOA to the total taxes paid by all individuals and small business taxpayers.  Citizens or small business that do not pay taxes during the holding period get no stock.

If the insolvent bank has operating losses, they are funded by the current budget of the US; and there is no write off the toxic assets.  The is no urgency to writing them off since the  onlly public body holding shares in the NBOA is the Federal Government. 

Currently there is no arms length transactions taking place in the housing market.  Owners are under duress, bank owners are under duress and so too is Fannie and Freddie.  Without arms length transactions the market collapses.  But if the Federal Govement owns the failed banks then there is no duress.   It holds the assests with asking prices at least equal to the mortgage amount granted when the house was purchased last.  So housing prices will restore to proper values.

Bob Johnson

Be Committed: Stay the Course

We all are committed to a much changed approach to ‘management’ of the economy.  Holy Cow is that an understatement.   WE are committed now and I’m going to work as hard as I can to maintain focus, concentration and committment to Kaffe Magnum Opus so it can play a part in turning the economy around.  As I say in the credits to new music posted on Bob’s Music Blog: “The secret to a good day is a good cup of coffee, every day”.  So I know that I’m, and you, are in the right business.  We bring sunshine and promise to our customers with every cup.

I’m in Florida at the moment and just finished a three day planning session with Robert Kraeuter, president of the company.  KMO  is committed to good coffee  and providing the best customer service in the coffee industry.   I mean we are committed.  While meeting in Florida, for example,  we called the office and reached an answering system.  Immediately we set out to hire an additional customer service person, and on the phone reminded, gently of course,  everyone in the office that “people always answer the phones’.   You can check on our success by calling 800-652-5282. 

So, no one is perfect, but when you find a situation that is not as you see it in your vision, you must make good on the promise, and make change.

Committment.  Either you have it or  you don’t.  The waves are rolling now and we must all pull hard to maintain our course.  Look at your facilities, take a video of your store and critique it; is it what you saw when you started.  Perhaps it is what you saw;  but is it working?  Do you have to change?  Please work fast to evaluate the people, products, promotion and any problems you know about.  Start with the building.   Then decide on a course of action. 

Robert and I had the pleasure of spending three days in a coffee house that provided a meeting room for our sessions.  We saw many things that in our opinion need change and when the owner and the main investor asked for our ideas we gave them in the form of a video and a ‘quick’ checklist of 35 things we would change.  I think the changes could double the sales.  There were many missed opportunities.  There is no charge for this evaluation.

When the waves are rolling  you have to move fast to stay ahead and watch closely for rouge waves.  You don’t want to be blind sided.  Listen to  your customers and give them what they want.  Today I believe that consumers want good service and good communication.  They want you to see eye to eye with them, no shades.  Pay attention and greet them in some way no matter what is up or down at the moment.  However, it can not stop with a greeting, we must deliver what we promise. 

If you have a broken machine, get it fixed, now.  The store we were in had a broken Gellato freezer.  It was down for three weeks (this is the season no less – winter in Florida)  before we got there and as I write this it is still down.  These are people who have money, a lot of it.  But the committment to the business is noticeably absent.  There is instead ambivalence and indecisiveness; these are fatal conditions in a storm.

Most times problems in a business are brought about by the person you see every day in the morning in the mirror, so don’t fret too much, you can change things without getting permission from someone else; just decide.  Talk to yourself.  Are you committed or are you thinking about moving, getting out, or getting a job (ugh)? Well you might have to get a part time job in order to convert your committment into action by raising capital at a second job.  If you are committed, you have to do it.

Obama this weekend said he knew the lobbyists were mounting a big push to get ready for battle against him.  His response was priceless.  He said: “I am too”.  And he isn’t kidding as we all can see – a couple of trillion dollars is getting to be routine.

So get ready to do battle.  Change things, get new allies, maybe get a new coffee supplier that is on your side, not hassling you for more and more and more.  Demand that they provide more and more and more.  This is the time to make change.

I have a vested interest in this business;  KMO is my creation and I love it and work on it and want it to succeed, and it is.  Robert and the staff got a 24% increase in our business in 2008 which means customers get what they want.  The same trend is developing in 2009.  But growth is not the point.  Sure I have a vested interest, but I too will provide what knowledge I have about business, the coffee business in particular, hoping and working so that we may move forward together.

Please listen: You Are My Sunshine or Battle Hymn of the Republic

Sunshine is a happy song; “you make me happy when things are gray”.  You and your product do this.  The Battle Hymn is a call to action, a marching tune that is impossible to resist.  Lets get moving.

Thanks for reading and listening.

Bob Johnson

Nationalize the Bad Banks – Here’s How

Nationalize the banks.  Oh my God, for so many years I thought this idea was blasphemous.  But not now.  The nature of the problem is so severe – or so we think – and the absence of lending is so dangerous, that action must be taken.

Leave the good banks alone.  They are doing ok, and there are advertisements from many local banks saying they have plenty of money to lend.  TD Bank purchased Commerce Bank, the bank Kaffe Magnum Opus, Inc. does business with, and they claim to have lots of money to lend.

No Bail Out – Merge the bad banks into a new National Bank of America

Nationalize the bad banks.  Here’s how.  Form a new National Bank of America  – NBOA – using the faith and credit of the United States as capital.  Then, as the bad banks implode merge them into the new national bank.  When the markets find a way to properly value the so called toxic assets now in the portfolio of the National Bank of America,  it must issue shares to every individual and small business taxpayer in American. 

The number of and value of the shares will be proportional to the amount of taxes paid in relation to the total tax paid by the group of individuals and small business taxpayers.  If people or small businesses have not paid taxes in the period beginning when the NBOA is formed and ending at the time it issues shares, then they get no shares.

Pretty Cool.  This targets the solutions directly at the banks that are needy.   Please write to CNN or Politico

As a founder of a successful business I’ve decided to express both business and other ideas that effect business in this blog.   Please listen President Obama

Bob Johnson

Mortgage Appraisals are UnderPriced by Fannie Mae and Freddie Mac

Appraisers approved by Freddie Mac and Fannie Mae are now providing appraisals that are way below the real value of the homes they appraise.   This is helping to slow the economy, defeat the low mortgage rates that are out there in order to drive the economy, and not permit consumers to transfer debt that is not deductable on tax returns to home interest which is deductible.  Low appraisals will permit banks and mortgage companies to collect fees and not provide the financing because the appraisal is too low to allow the refinance or worse too low to allow the purchase of a new home.

It is preposterous.  In this example the appraisal may defeat an investment in a new building for my coffee roasting company, Kaffe Magnum Opus, Inc.  Here is a first hand example.

My home mortgage is $287,000 on a home I purchased for $340,000 on December 31, 2003.  Since then I’ve spent more than  $125,000 improving my home and property.  Most of this went into creating 1700′ of new space including a gym, a very large music room for jams where we have had 30 muscians at one time and a space designed for a kitchen, but now used as a workshop.  All of this is heated, and finished very nicely. 

In June 2006 realtors told us to list the house for $600,000.  In February 2008 three realtors gave us list prices of $650,00-.  So the house would likely have sold around $599,000.

My home appriased yesterday for $420,000 by an appriaser hired by Wells Fargo Bank, who holds my mortgage.

I am refinancing my mortgage and locked in a rate of 5% to pay off my current %6 loan.  I paid 1/2 point for this lock-in.  The question is should I accept this lowball appriasal. 

No.

My plan was to increase my mortgage to 80% of whatever the appraised value would be, which I planned at well over $500,000 plus or minus, given the terrible market, but $420,000 never entered my mind.

The additional cash is going to be invested in Kaffe Magnum Opus, Inc.   Kaffe Magnum Opus would use this money to support expansion into a new building – a new building.  Do you see that Fannie, Freddie, Wells and Tom the appraiser, and Mr. President, who I support wholeheartily.

The appraisal is bunk, and I will not accept it.  And KMOCoffee will go forward with its project.

So the appraisal may stop an expansion; certainly it keeps the $100,000 mortgage proceeds and really more like $600K  (the lowball estimated cost of a new building) out of the economy. 

It is a good example of how a bank can avoid lending money without it showing up in the newspapers.

Our Great Country is in a bit of trouble and I’m willing to spend a lot of money for expansion that will help it, and Kaffe Magnum Opus, Inc. out.  So I hope the Administration will take a closer look at this practice and make the mortgage companies and the people who buy these mortgages enact appropriate practices.

Bob Johnson

Give Anonymously – The More You Give The More You Get

We need each others help.  Please help get 1 million donors quickly.  Pass this video along.  Lets get the country moving by doing something for others.

This really needs every bloggers help.  Pass it along.

Bob