World Debt Bubble

U.S. 329% debt-to-GDP. 

Eurozone 446% debt-to-GDP

China 256% debt-to-GDP (if numbers/estimates trustworthy)

Federal debt, state debt, and city debt [unfunded liabilities included] exceeds $200 trillion. China has similar issues with local & providence governments.

Not included above is corporate debt, which has been increasing. Stock buybacks and financial engineering are not good investments for corporations as the effect is temporary. Debt is better reserved for growing income.

Rising interest rates may trigger next recession. “With the Fed paring back its balance sheet and the federal government increasing its borrowing, the U.S. will have to finance by the end of the year “$400 billion a quarter — that’s a lot, that’s a huge shift from the past.” - Jamie Dimon, JP Morgan Chase

Recent debt-to-GDP data from Ned David Research (NDR):

Japan 590%
France 480%
Germany 279%
Greece 360%
S. Korea 357%
Netherlands 725%
Denmark 585%
Canada 332%
Italy 360%
Portugal 488%
Ireland 828%
Spain 397%
Sweden 467%
Switzerland 382%
UK 476%

When bubbles pop recessions happen. Stocks could fall 50% again. Bonds fall in this scenario as rising interest rates adversely affect bond values. 

No hint any economies are falling apart yet. These scenarios are early observations what may come over the next few years or decade. No one really knows what will happen. But with debt and interest rates growing, the next recession will be painful. 

My thoughts are to have diverse holdings, reduce your debt, and raise cash for the next downturn. There are opportunities in recessions. Diverse holdings could include low cost Vanguard Total World Stocks and Total World Bond ETFs. Other options include precious metals, CDs, US savings bonds, and savings accounts with online banks.

Working on my health, and planning working into my 70s or 80s. Based on family history and improving health care, could be healthy into 90s or 100s. Like to raise more savings.

Credit ‘On My Radar’ by Steve Blumenthal for information & inspiration. Suggest you read:

https://www.cmgwealth.com/ri-category/on-my-radar/

Own Your Mistakes

Everyone screws up. Dad said, “The only people who don’t make mistakes, don’t do anything.” Dad was right.

The natural reaction when you make a mistake is to deny it, keep quiet, or make excuses. All 3 are strong temptations. Don’t.

Made an error on instructions I wrote when a new engineer. The number was not clear enough for the machinist to read easy. The gentleman who brought it up to show me was expecting a fight. He had reasons lined up why I had to change it. 

My response when he showed me my error, “You’re right. I’ll fix it.” He was off balance by that response. Started to explain why, and then paused thinking about what I said. My follow up was, “Will do it right now. Is there anything else?”

Reason to own your mistakes, you will learn. Denial takes energy that can be used to learn. Was able to fix my mistake in a few minutes and get back to other work.

Even if something is not your fault, there may be a lesson you can learn in it. Communicating better. Understanding customers. Even not to use that company’s product or service again. Find value.

 Your boss starts talking with you about your performance. You are surprised it is not good enough. Not time to freak out, but time to ask questions. Could you show me what you expected? Do you have a sample what you are looking for? Who does this well? Let me go talk to him to see what they are doing right?

In short you are making a plan to improve your performance. Then set up follow up meeting. Set a time in one or two weeks to review your actions and ask for more feedback. Then thank them for telling you. (They have given you an opportunity to improve)

Answering difficult feedback with questions and maturity are not natural reactions, but can raise your value to your company. Learning often is followed by more opportunities and responsibilities. 

Serving Others

Memorial Day honors fallen soldiers. We remember their service to our freedoms and country. Most veterans I know say were not heroes. The heroes were those who did not come home.

While this is a great point, we have the soldiers’ and families’ sacrifices including missing time with loved ones. While they say just doing my job, it is quite a job the soldiers and veterans preformed.

People overlook the benefits of military service. You know your work is important and matters. The camaraderie and respect of your peers is hard to replace. As much as they served our country, they served their fellow soldiers. Wartime vets talk about how they fought for the guys with them. They were part of a bigger team and purpose carrying them through hardships.

Blue Angels

We all aren’t soldiers, but we can all serve other people. Charity and service are the biggest joys of life. It gets us out of our heads.

Activities and sports help children grow into responsible adults. Pastors and counselors help people grow through hard times. Charities improve the lives of the suffering. Take comfort with small triumphs. Together we create a better world.

Help a neighbor or relative. Pack or help them move. Lend a skill you have to a stranger or a child. Never know how good you will feel.

This weekend remember those who are no longer with us. Honor veterans and soldiers around us by serving someone who needs it.

Persevering

Life does not go as planned. We have dreams, goals and hopes for life. We are going to win the championship, get a scholarship, perform on TV, be famous, be rich and meet the spouse of our dreams. Raise perfect kids. Live in a mansion.

Real life is more challenging. We are awkward. Very interested in a boy or girl. They aren’t interested and find someone else. Work hard, fail and learn. Try again. Don’t get the promotion. Starting a business or restaurant and it closes. 90% fail in first 5 years. 90% of us don’t have enough or any retirement savings.

Never anticipated:

Failing Junior year of college. (Graduated on time)

Leaving home for work. (Repeated relocations to stay employed)

Getting laid off, being fired, or seeing coworkers laid off.

Being broke.

Months or years unemployment.

Not finding a spouse in 20s. (Married at 46)

Being sued (won, but cost thousands)

Bankruptcy (side effect of lawsuit & investment failure).

Being injured or ill. (Months of rehab & recovery)

Falsely accused of misbehaving & lying in career & marriage.

Family members with mental illness.

Losing loved ones.

It may get depressing. Don’t be.

Met and worked with so many great, talented people. Tried many things and learned skills accumulated. Learn resilience. Got better jobs and businesses. Learning investing. Found joy in serving others, giving away time & effort. Parents tell me how much they love it. When we need help, we learn how wonderful it is to be cared for. Life is good.

Goals change as we live our life. What were your dreams at 18 or 30 does not sound like a dreams at 50 or 60. We adjust. Persevere through hard and frustrating days. We get humility. Work harder and smarter. We develop new talents. Get resilience. We have fun. Tough times don’t last, tough people do.

Don’t be afraid to fail. There are few things more liberating in this life than having your worst fear realized.  Conan O’Brien talked how losing the Tonight Show led to reinvention and growth. He created a nationwide tour and landed his own show.

Remember you are a child of God. What we wanted is not as good as what He wants for us. You will get through your trials.

“Work hard, be kind, and amazing things will happen.” - Conan O’Brien 

The Powerful United States Economy

The US economy is so Productive, it is hard to understand or visualize it. Despite all the news reports and political positions to the contrary, the US competes well worldwide and is well positioned for future growth.

The US produced 24.3% of world’s GDP in 2017, with ~ 4.3% of the world’s population. 

China is the 2^nd largest economy producing 14.9% of the world’s GDP, but with ~18.2% of the world’s population. 

Mark Perry, University of Michigan economics and finance professor, has created a chart showing “how ridiculously large and powerful the U.S. economy is”. He compares each state to an equivalent country. 

California - United Kingdom

Texas - Canada

New York - South Korea

Florida - Indonesia

Illinois - Netherlands

Pennsylvania - Saudi Arabia

…

#11 Washington State - Iran

(See MarketWatch article for chart.)

  

California, Texas and New York would be among the 11 biggest world economies if they were countries.

Many reasons for the US dominance - Education. Financial Markets. Banking system. Military and Space investments. Airplane system. Trading ports on two coastlines, the Gulf of Mexico and the Mississippi River system. 

The main reason for success has been our wiliness to let entrepreneurs and investors create new businesses and products. We encourage people to create new intellectual property like software, products, movies, music, books and art.

Better yet we understand failure is part of the process. It is an event, not a description of ourselves. We applaud people who comeback to succeed. Anyone from any background and anywhere can succeed in America. This is essential in people believing in what they are doing to work hard and struggle through the challenges building some new takes.

What can we do? Support ideas and processes to start new businesses. Buy from someone new. One of the failures in the last decade is more businesses closed than new businesses opened.

Work on simplifying government regulations. The idea is have laws be simple to follow, not take everything to court. Do you think other countries are wasting their businesses?

Create new ideas and work hard to build them, for we need everyone.

 “Economy has frequently nothing whatever to do with the amount of money being spent, but with the wisdom used in spending it.” - Henry Ford

https://www.marketwatch.com/story/heres-how-big-every-states-economy-is-if-compared-to-a-foreign-countrys-2018-05-09

Develop Your Sense of Thriving

We know life is challenging - work, school, college, health issues, family, activities, news & politics. There are relocations, break ups, divorces, funerals, and difficult people. Hard work and stress are givens in daily life. In spite of it all, life is good.

You need to be your own advocate. Who knows better what you need?

Appreciate the work you do. Make a customer happy. Anticipate what the boss or a coworker needs. Find a mistake and fix it. Mentor someone. Perform a complicated task. There is always something to appreciate in work you participated in and accomplished.

Find what you enjoy. Sit in the sunshine. Walk on the grass. Garden. Cut the lawn. Help a child. Take a run. Draw. Drive somewhere beautiful. Exercise. Take pictures. Pray. Take time for small pleasures. 

You only have to convince yourself. No one else needs to be convinced. We all see how well you are thriving. 

“You have more control than you think. Your attitude, mind-set and willfulness can make all the difference.” - Christine Porath, ‘Mastering Civility’

First Resume in Years

Wrote my first resume in years last weekend for a job within Boeing. Is there a harder way to present yourself for consideration?

First you write accomplishments and keywords to get through the computer prescreening. Then create short bullets. Sum up major projects that you spent months working on and sweating out. Get a problem/action/result story down to a few words.

Can’t take risks because HR is trying to eliminate candidates first. Nonstandard, out you go.

How do you let your personality through? Your persistence, work ethic, humor and willingness to help the team? How will they know you are exceptional?

Worse you spend hours on a resume that is glanced at for 5 – 10 seconds.

A bland boring resume. Hire me!

Now you know why referrals are still the preferred way to hire employees.

Nice Guys Finish First!

At work we were talking about some people we worked with, who retired or transferred to other projects. Remembering them fondly, their quirks, and how they helped us. My program is in sustaining / cost saving mode, so there are a lot of former teammates. 

Interesting thing is no matter how successful they were, manager or higher, the people who came to mind were all nice. We did not waste our time on difficult people.

Later in the day thought about other co-workers over my 4 decades in manufacturing and business. Wondered where they went, their careers, retirements, and how they were doing? These people taught skills, they helped with problems, they asked for input and help as well. We do business with people we like and trust.

Have great friends from college freshman year, 43 years ago we started having Saturday dinners together. Still in touch though spread out over the country. 

Met their fathers, and like mine they were successful. More importantly they had character and were nice to those who could not help them. They raised us to stand on our own, ask questions, try something new, to fail and succeed. Our parents raised our siblings and us to be good citizens, charitable, as well as nice to people. 

What we learned has helped us through hard times, layoffs, relocating, new assignment, illnesses, marriages, and divorces. We pass on what we have learned to coworkers and the next generation. My family and friends have great children, and we get to spoil the grandkids.

Leo Durocher famously said, “Nice guys finish last.” He was wrong.

Nice guys and women build families, build churches, build teams, build great businesses and build communities you want to live in. Nice Guys Finish First!

“Never lose sight of the fact that the most important yardstick of your success will be how you treat other people -- your family, friends, and coworkers, and even strangers you meet along the way.” -- Barbara Bush

Artificial Intelligence Not Replacing All Humans

Saw an article this week the 100% of all human jobs will be replaced with Artificial Intelligence by 2050. I respectfully disagree.

Computers are easy to program to do linear thinking well. But that is a group of humans telling computers what to do. Computers do not extrapolate and apply knowledge to different situations near as well as a child.

Humans know how to experiment, to combine lessons learned, and to make jumps in logic to solve problems.

The first hint is the self-driving killing a pedestrian in Arizona. She was walking a bike across the road in the dark. There were no vehicles nor obstacles to possibly block the lidar & radar views of her. Yet the car still hit her.

Self-driving cars should have been programmed to avoid people walking into the street, and avoid bicyclists. But were they programmed to avoid a person walking a bicycle? 

Suspect the issues is what happens when the self-driving vehicle comes into situations it does not expect. Nature, other drivers, pedestrians, skateboarders, bicyclists and children do not always act in predictable ways. Can you program a machine to avoid a tornado driven house on the road?

As a technologist / engineer think quite likely we will see self-driving vehicles. It will take longer than the optimists think. Self-driving trucks are set up for well mapped out freeways with limited on and off ramps. City streets and country roads are still too difficult. What would they do in a blizzard without human intervention? 

Drove from my brother’s rural house in New York down to JFK airport on a narrow parkway and city freeway. Was able to use the radar cruise control most of the trip, and appreciated the lane drift warnings. However could a self-driving car on an unfamiliar road know to move to different sides of the lane or straddle the lane markers to avoid potholes and wet patches? 

What about dogs, cats, deer and other animals crossing its lane?

What about the parking at McDonalds with a dead truck in the middle of parking lot lane and cars parked all over? Would it know how to figure a safe place to park out of the arriving tow truck’s way? Could it manage the drive thru?

Does AI know a ball rolling into the street means a child may follow?

AI will be a helper for humans, and make roads safer in the long run. Lets face it the biggest safety problem today is distracted drivers. Computers will not replace creativity and deep thinking.

Scientific American interviewed Leonard Mlodinow about his new book, “Elastic”. Leonard Mlodinow believes the future belongs to the elastic mind. Read here: 

https://www.scientificamerican.com/article/the-power-of-flexible-thinking/?utm_source=World+Future+Society+Members+and+Supporters&utm_campaign=732627831c-WFSNewsletter_032818&utm_medium=email&utm_term=0_0898ed6394-732627831c-283213941&mc_cid=732627831c&mc_eid=910ad0ceeb#

Free Time for Professional Growth

Life is too short to think only about work.

“Those who are wise won’t be busy, and those who are too busy can’t be wise.” - Lin Yutang

There is no way to be healthy, wealthy and wise working 14 hour days. You will be too tired and frustrated to learn anything. Your productivity started to fade hours before the end of the day. Monday may have been productive, but by Wednesday or Thursday you are not sharp. Friday you come home and fall asleep on the couch.

How are you supposed to think? Thinking and learning are how we get more efficient and productive. New skills earn us more money. Not brute force.

I use to schedule an hour or two a week to read the business articles I cut out during the week. Found ideas and tools from other industries that improved factory productivity. Reading was not a waste of time.

Your goal is not to be a good worker. You want to be a complete, well-rounded person. Emotionally healthy, physically sound, and mature are desirable goals.

It is not the long workdays you think about when you get older. You think about time with friends, family and loved ones. Think about adventures and experiences. You think about mentors and classes who changed our life. Successes and the strange paths they all took. 

Hard work is necessary to be successful. But choose the right work to do. Happiness is important.

“The three American vices seem to be efficiency, punctuality and the desire for achievement and success. They are the things that make the Americans so unhappy and so nervous.” - Lin Yutang

Credit Mark Skousen’s “The Art of Letting Go” inspiring these observations.

http://mskousen.com/2007/03/the-art-of-letting-go-2/