Saturday, January 21, 2012

"Too Big to Fail" Assures Bigness - and Failure

Guest post by Tom Evslin

This article was originally posted on Tom's blog, Fractals of Change, on 11/15/11
Tom Evslin of Fractals of Change

Reader Bobsv57 asks:

"Tom, a question for you. I am under the impression that most, if not all, of the money used to bail out banks has been paid back with interest and it is actually the money used to bail out GM that hasn't been returned. Am I correct in this observation? and if I am, then why to you make the statement calling for no more bank bailouts? (Not that I particularly support them in any case) It would seem that the bail out was a money maker for the Fed, wasn't the interest they charged the banks for TARP funds greater than the interest the Fed pays on it's national debt?"

Bob is right that the banks paid back their loans with interest. But the eventual cost of the bailout is likely to be the failure of our banking system and massively increased public debt. Meanwhile, middle America is starved for credit while the "too big to fail" banks are getting bigger at the expense of their better managed smaller and safer brethren.

An article in the Wall Street Journal explains one way that corporations are positioning themselves for the next credit crisis:

Saturday, January 14, 2012

The Houston Texans Strategy is Paying Off

Houston Texans NFL football strategy
It probably won't surprise readers of this blog to hear that I like to approach football from a strategic point of view. I avoid being frustrated by our quarterback's latest interception, or our running back's latest fumble by focusing on the bigger picture -- where do we stand compared to our strategic plan?

The Vision: Sustainable Excellence

My vision for the team is what I would call "Sustainable Excellence." By that I mean a team that is consistently among the best in the National Football League (NFL). It's a team that consistently makes it to the playoffs, and sometimes wins the Super Bowl. I firmly believe that is the organization's vision as well. And, I believe we're on the right track.

Clearly, one key to realizing that vision is getting the right people. Let's look at some aspects of the Texans' "people" strategy.

Monday, January 2, 2012

Stock Market Total Returns through 2010

Last year, I archived the "Stock Market Returns through 19xx" post so that the results through year-end 2009 would continue to be available. Based upon the interest in that post, it seems worthwhile to continue the practice. So, for interested readers, following is my archive of market total returns through 2010.

Stock Market Total Return Results Through 2010

  • Since 1900 (end-of-year 1899), through 2010, I estimate the average total return/year of the DJIA (Dow Jones Industrial Average)  was approximately