Not a Recovery Story

8 05 2010

I used to work for a startup that provides tools (software) for medical/pharmaceutical research. We managed to survive the dot-com bubble and its aftermath. The company was on its way to being profitable, however, the current economic crisis seems to have had a bigger impact than the dot-com bubble bursting.

Recently, I got an info about the company needing to sell most of its stock on fairly bad terms in order to survive. This being a tech startup, large percentage of the shares were  Common Stock already purchased by current and ex- employees, plus there were still many outstanding Common Stock options. That stock is getting diluted to pennies for a dollar, which will surely kill the morale of many long time employees.

Some things that are mentioned as contributing to current bad condition of that company are: “decreased research”  and “healthcare reform”. Great work Nancy, Harry and Barack — that is some kind of health care reform that you brewed – one that negatively impacts companies in medical/pharmaceutical research. But who needs some fancy-schmancy new drugs while we have Aspirin.


What do you think about Obama’s tax cut promises?

13 11 2008

Obama has promised me $1800 tax cut.

$1800 dollars in tax cuts that Obama has promise me and my family

$1800 in tax cuts that Obama has promised my family

Does it make sense to bail out GM and others?

12 11 2008

Cadillac CTS Coupe

Cadillac CTS Coupe

Does it make sense to bail out GM and others? On the one hand, they are starting to have a lot of good products, so they might have future. On the other hand, they are mired in UAW contracts which make it difficult to be competitive.

Because of the UAW, Obama will probably bail them out. But it might be just money thrown away, and they will be asking for more handouts again in a few years.

Maybe bankruptcy would be better. Then whatever would remain of the Big Three would be more competitive.

Total worker compensation per hour in auto industry

Total worker compensation per hour in auto and other industries

Here are some interesting posts about the financial problems of the Big Three:

Here is what happened to British Car companies after the British Government bailed them out.

British Leyland Shares -- Valueless

British Leyland Shares -- Valueless

Dow Jones U.S. Coal Index down more than 15%

6 11 2008

DJUSCL index down 15.% on 11/6/08

DJUSCL index down 15.% on 11/6/08 (click to enlarge)

DJUSCL (Dow Jones U.S. Coal) lost today, second day after the elections, 15.67%. For comparison, DOW lost 4.85%.

Could this have something to do with Obama’s promise to bankrupt coal?

Obama: “electricity rates would necessarily skyrocket”

2 11 2008

So yesterday we learned that Obama thinks that painfull price signals are necessary. Today we learn about his extreme plans for CO2 cap-and-trade that would bankrupt coal industry and make electricity rates skyrocket.

[Obama] … I was the first to call for a 100% auction on the cap and trade system, which means that every unit of carbon or greenhouse gases emitted would be charged to the polluter. That will create a market in which whatever technologies are out there that are being presented, whatever power plants that are being built, that they would have to meet the rigors of that market and the ratcheted down caps that are being placed, imposed every year.

So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.

…. You know, when I was asked earlier about the issue of coal, uh, you know – Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it – whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.

BTW, 48.5% of electricity in the US is generated from coal. So if Barack is against coal, against new nuclear power, against drilling off-shore, what is his plan for the Energy?

He wants to ratchet up the electricity, gas, and generally energy prices so that consumers will no longer be able to afford it and will be forced to cut on consumption or spend money on “energy efficiency”, like new AC units ($4k a piece), smaller and/or more expensive cars etc.

Regarding commercial energy consumers, their higher energy cost would certainly trickle down and result in increases in prices of goods manufactured in the USA.

So what Obama giveth you with one hand (e.g. $500 refundable tax credit) , he with the other hand taketh away (higher energy and goods prices).

As expected media keeps silent about this.

Stupid e-mail I got from Obama Action Wire

1 11 2008

Here it is (my comments are in red):

Obama for America

Friend —

Yesterday morning we woke up to news that America’s GDP has fallen for the first time this year, meaning we’re producing less and selling less.

In short, our economy is shrinking.

Also yesterday, ExxonMobil announced the highest corporate profits in United States history.

[Great! Most certainly some of my 401(k) is invested in ExxonMobil. If they are doing good, my 401(k) will be doing better.]

John McCain’s economic plan? Give $4 billion in new tax breaks to Big Oil companies like ExxonMobil — and leave 101 million American households with no tax relief at all.

[McCain’s tax cuts have enough for me. Plus I can trust McCain more than I can trust Obama — If you do not agree, give me one reason why I should trust Obama.]

We don’t have to take another four years of this. Sign up to help get out the vote for Barack.

Corporate profits won’t heat Americans’ homes this winter or put food on the table.

[Yes, they will. If my company does not make profit, I will be unemployed. How will I then heat my house?]

We need change.

[Yes, but not Barack-change]

Barack Obama has an economic plan to give tax breaks to 95 percent of working families [including those who do not pay taxes] and create jobs by investing in people. [Is this some new “work from your home” scheme? I’ve always thought it is companies that create jobs.]

See what you can do before Election Day to help bring the change we need:

Keep fighting the good fight,

Obama Action Wire

Obama about to “fundamentally transform the United States of America”

1 11 2008

Here is a video (from Obama rally in MO) that makes clear what the stakes are of these elections:

And here is a transcript that puts it into context:

“We are 5 days away from fundamentally transforming the United States of America. In 5 days you can turn the page on policies that have put greed and irresponsibility on Wall Street before the hard work of Main street. In 5 days, you can choose policies that invest in our middle class, create new jobs and grow this economy so that everyone has a chance to succeed. Not just the CEO, but the secretary and the janitor. Not just the factory owner, but the men and women on the factory floor.

The last sentence proves that Obama knows a lot about economy, i.e. the Marxist theory of it. It is all about class warfare. The eternal enemies: on the one side the evil factory owner (who owns the means of production); on the other side the poor alienated workers on the factory floor. You can read more about it here: Marx’s theory of alienation.

But the rest of the quote proves that he knows nothing about how real economy works. How does he want to “invest in middle class” and “create new jobs” without the help of the “factory owner”? If the “factory owner” has no benefit from being a “factory owner” then why bother. (I have worked for start-up companies for the past 7.5 years, and believe me, if not for the promise of a big pay-off I would not have worked as hard as I have in those years. Instead, I would have sought some easy, 9-5 job, preferably for the government.)

Anyway, the thing that I do not like the most from this speech is the idea that America needs to be “fundamentally transformed”. It is true that USA is not perfect, but what is perfect but a Utopia. I like America a lot. I have lived it several European countries, and I think that America is the best.

Or course, I would not mind some improvements here and there. But, heck, I do not want some Obama to “fundamentally transform” it.

UPDATE: His promise of fundamental transformation is probably related to his ideas why America is fundamentally flawed.