Monthly Archives: April 2014

This ‘N That 4/24/14

Central Planning Always Fails in the End-Now it’s Yellen’s turn to learn.
Ms. Yellen is strong proponent of central planning. Shortcoming is not using practical rules. She prefers economic models with names like “optimal control” or “communications policy.”  To Yellen, ‘optimal control” equates to abandoning current conditions and substituting a policy to keep rates lower longer. She believes that by communicating the Fed’s intentions individuals will “get the message,” making decisions on investments, spending, and borrowing based on promises of lower rates. That in turn will lead to increased demand, strong economic growth and higher employment. When that occurs the Fed can start to withdraw support so inflation doesn’t occur.

That’s her theory. How about reality? The Fed is trying to change consumer psychology. The trouble occurs if it succeeds. Once consumers change philosophy it’s very hard to get them to change back. Kind of like putting the tooth paste back into the tube. The Fed would like inflation at 3% or so. Fed believes they can control it. But like all central planning that rarely happens.
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We live in a bi-polar world. There are practical solutions. This is longer than practical here. Published on SecurEmploy Blog 4/12/14 Just scroll down.
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It’s All a Matter of Perspective. We are all aware of self-serving nature that fill politicians minds, and how dysfunctional our government is. But the larger picture is pretty good and we each need to remind the pessimists of the world how good we have it. We have a stable “democracy.” A military power that is the primary defender of the free world. Our economy is still the largest. Our dollar is still involved in 87% of currency transactions. Our financial markets are the freest. Our free enterprise system is still envied. Our economy is expanding. Unemployment just hit a 5 year low. New technologies are driving additional and new manufacturing.
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71% of US workers actively looking or open to new opportunities. If 71% are looking for new jobs how come we are making recruiting employees so difficult? Only two things are needed for successful recruitment. First, make sure recruiters are spinning the dial…calling prospects, calling peers in position to ask for leads, etc. Second, Require every manager in your organization to refer at least 4 “A” candidates to your company every year. What’s an “A” candidate? The types of employees you need the most. Recruiting should be the responsibility of the managers who have the direct responsibility for the function. Remember: Every new employee should make a contribution to profits = to at least 5 times their salary the first 12 months on the job. Sales people 10x.
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Degenerate Capitalism. What’s implication for our industry? Three thoughts. This one is little longer than fits here. Published on SecurEmploy blog April 23. Just scroll down.
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Foreign Investment. Last year, foreigners invested a record $38.7 billion in commercial property, according to real estate brokerage Jones Lang LaSalle. That’s a 44% increase from 2012.

Ask Employees to Tell Their Friends About Your Job Openings We all know the value of employee referrals. Have you asked your employees to tell friends and family about your openings? Or do you just assume they do that? Expand your network of referrals. Be sure to offer an incentive for any referral hired.
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French social commenter and political thinker Montesquieu once wrote, “There is no greater tyranny than that which is perpetrated under the shield of law and in the name of justice.”
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Why is Russia really interested in Ukraine? Why doesn’t US have a dog in this fight. SecurEmploy blog post 4/21. Just scroll down.
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Crimea is resource rich. Rest of Ukraine is resource poor. Crimean resources are very important to Russia. Without Crimea, Ukraine can not continue to exist. Russia can threaten and bluster but starve Ukraine into submission. Inflation in Ukraine is already at 25%. Russia is Ukraine’s largest trading partner making up 70% of Ukraine’s exports. Take away Crimean commodities and Ukraine doesn’t have enough to export to survive.
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From Chicago: “In Chicago, armed civilians justifiably killed three times as many violent criminals in past 5 years as did the police.’”Civilians defending themselves captured, wounded, killed or scared off criminals in 75% of confrontations.” Professor Don B Kates Jr, St Louis University law professor, Laissez Faire Today.
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China’s trade agreements to use Yuan to replace $. Good or bad?

Already, China has trade agreements with Brazil, Australia, the European Union, and other nations. Most international trade is conducted in dollars

Last year, the yuan surpassed the euro as the second-most-used currency in the world… It made up 8.7% of global trade in October 2013 compared with 6.6% for the euro. In 2012, the yuan only made up 1.9% of trade compared with the euro’s 7.9%.

If the world rejects the dollar in favor of the yuan – or any other standard for trade – it would end US ability to print a limitless number of dollars and issue limitless amounts of debt

OR WOULD IT?American public seems to have no ability to stop government printing presses. Politicians certainly have no reason to stop the presses. Perhaps the only thing that will get US to address our issues is by losing the Dollars position as world currency of choice.
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Two numbers the government can’t fudge. Employment-to-population (currently just under 59%) and Participation Rate the actual percentage of the population, of working age, that is working (currently 63%, down from a high of 67% in 2000). US had 118.5 million full time and 26 million part time workers in 2013. That means that 37.5% of residents are working to support the other 62.5%. That’s not sustainable. Only part of that 62.5% are children.
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Current Career Opportunities Corporate, Hotel, and Resort opportunities.

Training for Revenue Generation by Ed Iannarella.

 

Degenerate Capitalism Returns…Again

Degenerate Capitalism is term that’s starting be thrown around…again. Term originally used may years ago by economist Dr Kurt Richebacher. Degenerative capitalism occurs when a capitalist economy is taken over by the financial markets. When economists view economic data only on the basis of what impact the data has on the immediate financial markets.

In 1970’s economists universally agreed a nation needs savings to assure prosperity. Fast forward to 2013 and we have the view that consumer spending makes any nation prosperous. If deficit spending by the government is bad, then deficit spending by consumers has got to be equally bad. Media, economists, and Federal Administration (and many states) are ignoring it.

In healthy economies, consumption has to be fueled by production. Americans are getting poorer at rate of 2.3% per year.

What’s implication for our industry?

  1. Look for industries that are expanding production and increasing their margins.  Get greater share of your business from them.
  2. Recognize that general public is going to have less and less to spend every year.
    How much of your business is dependent on discretionary spending by the consumer? How successful can your business be going after a shrinking percentage of upper middle class Americans? Can you upgrade your amenities as fast as chains think you should, and still keep the margins you want?
    If not, what’s your plan? Those that anticipate will do ok, others will lose profits…too quickly .
  3. Use creative thinking to identify how to restructure hotels to a different business mix.
    Perhaps you can rent out some rooms to professional businesses that have base of customers coming to town consistently. Office services you currently provide can help those businesses reduce expenses. Then get tie in to have those customers stay at your hotel rooms. Means their customers can do business without having to leave your hotel…reducing their expenses. Many hotels already have tie-ins with local restaurants to deliver meals. Done right, you may not need that expensive franchise affiliation. Or you can get a less expensive affiliation without losing rate.

Industry emphasis has been expanding/upgrading amenities. That’s forcing businesses to go after the same upscale customers…a customer base that is increasingly affluent…but declining in numbers. How long will you be competitive in that environment? Maintain your desired profit margins? Understand if the overall market by your hotels is upgrading, staying the same, or starting to slip.

Like all businesses…to thine own self be true. Trust me, the franchisors are.

Tell Friends About Your Job Openings

Ask Employees to Tell Their Friends About Your Job Openings.

We all know the value of employee referrals. Have you asked your employees to tell friends and family about your openings? Or do you just assume they do that?Expand your network of referrals.

Be sure to offer an incentive for any referral hired. (What get’s rewarded gets done.)

Why is Russia really interested in the Ukraine

We hear a lot from Russia about historical significance of Ukraine . That’s only a small factor.

Energy breakthrough is driving it. Russia is losing it’s dominance as world player in gas and oil. Ukraine is key player in pipeline that can go down into Europe to deliver oil and natural gas from Middle East, by-passing Russia oil and gas production, and avoiding expensive shipping.

As long as Russia controls the Ukraine they can extract tariffs from the pipeline to keep their revenue up. Probably can also tie in with pipeline for distribution purposes to reduce their expenses.

Oil and gas make up 70% of Russian export earnings. It also makes up 50% of Russia’s tax percentage. Controlling the Ukraine is critical to them. Short term for reasons above. Longer term, if they get by with grabbing Ukraine without world doing anything it gives them leverage to take over the rest of the former Soviet Union, a long time goal of Putin.

It also explains why EU is anxious to have Ukraine in the EU fold. EU will benefit the same way US will benefit from the pipeline from Canada to the Gulf of Mexico.

Why doesn’t US have any clout in controlling this? Because this Administratiion has dragged their feet on permits  to build export LNG facilities for over 5 years. US only has one LNG facility at present, in Houston. Administration just approved a second one for east coast in last few weeks.

These facilities cost billions and take several years to build. Had those permits been issued 5 years ago the facilities would have been completed. US could have exported massive amounts of natural gas to Europe. Lessening dependence on Russian natural gas exports. That would have put tremendous economic pressure on Russia. Right now Russia provides huge percentage of oil and natural gas to Europe. Enough that Europe doesn’t dare defy Russia by cutting off Russian oil and gas imports.

As usual, US Administrations, of both political persuasions, have had very little understanding of world economics and less interest in preparing US to exploit our advantages. Instead we have relied on military. Now that country is no longer willing to do that we will play catch up for several years. Putin is smart enough to know that, thus he’s moving now in hopes he can take over all of former Soviet Union before world can do anything to thwart him (short of military involvement.)

71% of US Workers are looking/open to new opportunities

71% of US workers actively looking or open to new opportunities.

 If 71% are looking for new jobs how come we are making recruiting employees so difficult?

Only two things are needed for successful recruitment.

  1. Make sure recruiters are spinning the dial…calling prospects, calling peers in position to ask for leads, etc.
  2. Require every manager in your organization to refer at least 4 “A” candidates to your company every year.

What’s an “A” candidate? The types of employees you need the most. Your ‘A’ candidates are different than mine.

Recruiting should be the responsibility of the managers who have the direct responsibility for the function.HR Departments can be responsible for recruiting hourly associates, but individual managers are the most efficient when it comes to identifying the people they need to meet their goals.

Remember: Every new employee should make a contribution to profits = to at least 5 times their salary the first 12 months on the job. Sales people 10x.

 

We are interested in hearing and sharing steps you are taking to make sure your key employees are in the 29%.

The Bipolar World

The Bipolar World-The Problem with Politicians is their inability to say “no” to runaway spending and special interest groups. Today the problem is bigger than individual countries.

In USA, entitlement spending is projected to grow at more than $8 trillion per year. Let’s see, corporate income tax from all US corporations is $1.6 trillion. Adjusted gross income of all Americans making more than $66,000 is another $6.7 trillion. Not enough to cover just the increase in entitlement programs.

While I’m certainly no fan of Obama, there’s a good reason he didn’t mention spending reform. It’s got to start with cutting benefits to seniors, political suicide.

Public sector regulations cost American’s $1.8 trillion a year. (That’s $14,768 per household. Throw in deficit and unfunded liabilities and it works out to $1,250,000 per taxpayer.

There’s always a solution for every problem. The above can be defeated by commerce which always trumps politics. Government is about coercion. Business is about individual choice and freedom. Private sector strives daily to bring people better goods and services that are longer lasting and cheaper.

Congress has 6% approval rating…and 91% re-election rate. With that result don’t expect them to quit kicking the can down the road. Voters either have to kick them out of office or impose term limits. Until that happens don’t expect responsibility from elected officials…at any level. Expect some nasty things to happen in the investment and business world from time-to-time. Swings like we experienced in 2008-09 are going to happen with increasing frequency.

That means more business disruptions. Understand and invest accordingly both personally and professionally. And push for term limits. We each need to be more active politically if we hope to mitigate the damage done by politicians and governments. Ideally we need to have federal balanced budget annually, just as states do. With nothing off-budget. That would force politicians to be little more pragmatic. When you are with young people and others who support the government grab for power and wealth, point out how close it is to hitting them in the pocket book.

“Tell me your philosophy and I turn off and go to sleep. Tell me something that negatively affects my spending money and you get my interest.” (Perhaps reluctantly, but you will get it, especially if you just give facts without editorializing. Think about the way we all need to communicate with teenagers to get our point across. The velvet hammer works better than the sledge hammer or pile driver.)

Take a more active interest in politics.

Issues with Generic Drugs and How To Avoid.

Purpose of following is to educate people on questions to ask their doctor when considering a generic drug. Generic drugs are required to be close to, but not identical to a brand name drug. As always, knowing right questions to ask your doctor or pharmacist is very important…in all things medical.

Following is abstracted from May 14 issue of Dr David Eifrig Jr’s Retirement Millionaire (Issue #66). http://stansberryresearch.com

FDA has ruled that generic drug manufacturers can’t be sued.

“The FDA requires generic drugs to carry the exact same labeling as their name-brand counterparts (not including the brand name or trademark). All of the safety precautions, warnings, and related text must be copied exactly. They also  must carry the same warnings as the branded drug. So far, so good,  but if the branded drug doesn’t have specific warning, the generic isn’t required to have the warning either. This is huge loop-hole should a patient have a problem with the drug. FDA is working on changing this rule so generic drug manufactures could be sued.

Generics are not identical. They strive for “bioequivalence.”   “Bioequivalence” means things like the dosing, strength, method of administration, and intended use should be the same.  Measuring bioequivalence is a difficult process to explain, but it is the crux of the problem.

The scary part?  The FDA won’t release the bioequivalence studies that determine their judgment. “Bioequivalence” doesn’t always mean the generic drug will act same way the name-brand drug does.

What’s advertised as the same drug with the same dosage may have anywhere from 15% less to 25% more of the drug’s activity in the body. This means the generic could be slightly more or less effective than the brand-label version.

The ingredients can also be different. The only ingredient that generics need to have in common with the name-brand drug is the active ingredient. That means all preservatives, binding materials, coatings, dyes, and flavorings are fair game. The generic maker will often switch to lower-cost ingredients (another reason generics are cheaper).

This is all legal and approved by the FDA.”

Dr Eifrig continues, “Don’t get me wrong… not all generics are bad. But I believe in transparency and empowering consumers.

Before you start using a generic, ask your doctor or pharmacist some specific questions:

  • If you are on a blood thinner, ask about how often you should get your blood checked. Make sure to ask if you should get it rechecked when/if your prescription gets changed. The answer should be yes.
  • Do your research before you harm yourself. Remember… generic-drug makers CANNOT be sued if you have a reaction. They are required to copy the label verbatim from the original drug. Watchdog groups and online forums can help if you start feeling like the drug is causing problems.
  • Certain kinds of drugs require delicate and tight therapeutic dosing regimens. With things like mental illness, epilepsy, blood thinning – ask your doctor about generics and which ones are the best substitutes for your name-brand drug.

Once you start the generic, make sure you monitor your symptoms. Any re- currence of symptoms could mean the generic isn’t working. If that’s the case, ask your doctor if you can switch to the brand name.”

Practical tip Dr Eifrig suggests:

“… keep a log of your medications. Every time you get a refill, make note of the name, brand, distributor, color, and medication dose. Give this journal to your doctor/spouse/kids – everyone. This is a simple way to keep track of your medications, and it can save your life if you’re ever in the hospital.”

Saving money on prescriptions:

“If you want the brand name, some insurance companies will make you pay a higher co-pay or claim the drug is not approved and refuse to pay for any portion of it – making you cover the full cost.

If you’re worried about the added cost, there are ways to save money on prescriptions.

-An “authorized generic” is a generic-label version sold by the brand-label manufacturer. It’s a lower-cost version of the exact same drug.

The same company makes it with the exact same ingredients. This allows the manufacturer to corner the market on the generic form of the drug, push- ing out other potential generics. For consumers, it means getting the exact same drug as the brand-label drug… avoiding any variances that come with using the generics from a different manufacturer.

The FDA maintains a list of authorized generics. You can see it at http://www.sbry.co/qlGIet.

Another way to save money… Take a double dosage of your medicine every other day. So instead of taking 5 mg a day, you’d take 10 mg every other day. Since a 90-day supply of 10-mg pills costs the same as the 5 mg, you’d save 50% instantly on your drugs. Just check with your doctor to see if this could work, as some medications work best taken every day, regardless of the amount.

-Another way to save is with coupons. Like other consumer-product providers, drug companies offer coupons. The coupons are distributed to doctors and pharmacists. Not all companies provide coupons. But feel free to call up your doctor or pharmacist and ask if any coupons are available for your prescriptions.

You can also find printable coupons online: www.GoodRx.com and www.RxPhar- macyCoupons.com.

-You can also buy your drugs in bulk. Buying a 90-day supply of your medications can save you up to 40%, versus buying your medication every month. The simplest way to do this is to ask your doctor to write out a prescrip- tion for a 90-day supply, with multiple refills as necessary.”

Retirement Millionaire is published monthly. Excellent tip on an investment, good medical tips, and 2 page section with a variety of short, quick tips. It’s worth checking out. http://stansberryresearch.com/products/retirement-millionaire/

Recruiting Better Employees-Quickly & Effectively

71% of US workers are actively looking or open to new opportunities.

What are you doing to keep the top 29% of your employees? Do you know who they are? Do you know why 71% of your employees are looking? (Money is rarely the reason.) Share your stories so we can pass them along.

Why are we making recruiting difficult?

If 71% are looking for new jobs how come we are making recruiting employees so difficult? Come on! 7 of 10 people you see are looking or willing to listen.

Only three things are needed for successful recruitment.

  1. First, make sure recruiters are spinning the dial…calling prospects, calling peers in position to ask for leads, etc.
  2. Second,  require each manager in your organization to refer minimum of 4 “A” candidates every year. You need to build an ongoing pool of “potentials” to shorten time jobs are vacant.
  3. Effectively work employee referrals. (Standard of Performance for  hourly Associates: Refer at least 3 people qualified to work for you. Not warm bodies, qualified candidates.)

Quit relying on job boards, LinkedIn and social networking.  2/3rds of those employed are not watching those sources. Why would you want to ignore 2/3rds of candidates? Those sources sometimes are effective, but the hours spent makes them very expensive. Additionally it means your jobs are vacant to long. That impacts morale and reduces profits.

Who Should Do Your Recruiting?

  • Management Candidates should be recruited by the Department they are going to work in, NOT HR.
    Managers know best the traits they need today to drive revenues and profits, and to improve management and morale in their Department. Next, they won’t waste time recruiting in the wrong places. HR should be used to  set up interviews, run references, do background investigations, make job offers, handle orientation paperwork, etc. BUT NOT the actual recruiting. Why? Two reasons:

    1. HR staffs are rarely given enough information to effectively do cold recruiting. (A Job Description is a terrible source for recruiting information.  Actual skill sets are about 20% of any job, 80% is how well people supervise, train, motivate and mentor to improve revenues and profits. It’s not what you know, but how you use what you know.)
    2. Most HR people dislike (many say ‘hate’) recruiting.
  • Hourly Candidates should be recruited by HR Departments. HR Departments need to use employee and peer referrals much more effectively to reduce the time HR spends on recruiting.   80% of hourly Associates should come from promotions or referrals.

What’s an “A” candidate?

The types of employees you need the most. Who knows which traits are needed better than the manager responsible for the function?

Remember: Every new employee should make a contribution to profits = to at least 5 times their salary/wages the first 12 months on the job. Sales people 10x.

Every person we hire must help increase revenues and profits. Otherwise they are not needed. Goal is to continually grow a business so it can expand to create more opportunities for more people.

How About Employment Companies?

Two times to use them:

  1. Jobs that historically are very difficult to fill.
  2. Positions that have critical economic impact and need to be filled quickly to avoid drops in revenues or profits.

 

 

It’s All a Matter of Perspective

We are all aware of self-serving nature that fill politicians minds, and how dysfunctional our government is.

But the larger picture is pretty good and we each need to remind ourselves and the pessimists of the world how good we have it.

  • We have a stable “democracy.”
  • A military power that is the primary defender of the free world.
  • Our economy is still the largest.
  • Our dollar is still involved in 87% of currency transactions.
  • Our financial markets are the freest.
  • Our free enterprise system is still envied.
  • Our economy is expanding more than 4%.
  • Unemployment just hit a 5 year low.
  • New technologies are driving additional and new manufacturing.