Review of "Inside Job", Oscar winning documentary and a comment or two

Last weekend, I got around to watching the documentary that created a real buzz at the Oscars for the winner's acceptance speech as much as the movie.  In his acceptance speech, Charles Ferguson said that not one person has gone to jail for what was perpetrated on the American people and the world in the financial meltdown.  When you look at the vast amount of greed that has occurred in the American financial system of the past decades, he has made a film that lays it all out, warts and all, for all of us to see.  AND YOU NEED TO SEE THIS ONE!  As demonstrated in the movie, there is plenty of blame to spread around, particularly with the investment banks, the SEC and the rating agencies.  Even worker bees in the mortgage and real estate business rode the tsunami of cash for a long time.  Yes, many local folks worked very hard and now they all have taken it in the shorts the past couple of years and will continue to feel the pain for another five years, at least.

So who's all to blame?  Oh my, where do you start?  Where do you end?  The thing you have to remember is that blame is not necessary criminal.  That is where I think that the investment banks, the SEC, AIG and the ratings agencies are primarily to blame, but someone needs to look deeper.  If they and others were not making changes in the legal connections over decades between mortgages and derivatives, the financial community would have been hard pressed to create such a calamitous event.

We also know the usual suspects in this case if you haven't been paying attention - mortgage brokers, commercial banks, investment banks, AIG, the SEC, the rating agencies and of course, the politicians.  Yes, we can certainly point a big, fat finger at previous White House administrations (yes, plural and of both parties) as well as Congress.  Too much money, too much greed and too many people willing to look the other way.

I am also going to offer another reason why we ended up in this fix.  Short-term thinking.  For years we have simply decimated our manufacturing sector.  Because we valued short-term profits over long-term strategic thinking (for the reverse, see China), we were willing to send millions of jobs overseas because labor was so much cheaper.  We lost the diversification of our economy, forgetting how to make things or at least not caring because we only want a "heckuva deal".  So in order to keep our GDP growing every year, we needed another sector to take the place of manufacturing.  Enter the construction industry.  For years, we hung on the leading indicators of new housing permits and starts like it was real growth, when in reality it was about bigger and better houses because we can, not because we should.  The "I want it now" mentality, "push a button and get a result", gave us short-term profit expectations in long-term investments.  And we all just followed the pied piper, Mr. Greenspan, as well as others that said that deregulation was good.  So, some of us need to take a good look in the mirror.

Now it's time for the rest of us to play a different tune.  Oh and if you're looking for someone to really focus the gleaming bright light look no further than the people responsible for designing the compensation packages throughout the financial industry.  When you want to change or direct behavior in a capitalistic society, there's no better way that to give an incentive for that behavior.  Now, don't get me wrong, I pretty much dig the capitalistic system.  Yet, any adequate checks and balances that were in the system were swept away with strong lobbying efforts and campaign contributions.  Yep, that other tsunami of cash that also benefited a select few.

Okay, I could go on with this but know I should probably quit while I'm ahead.  If you feel compelled, make a comment on this post.  As long as it doesn't flame anyone personally, I'll post it.

PS. I will say it was a little weird to see Dominique Strauss-Kahn being interviewed for "Inside Job".  Too bad he couldn't keep it in his pants.  He actually nailed it and provided one of the few perspectives that showed a global view (and frankly he should have being the former head of the IMF and all).  Watch his interview in the Special Features section of the disk.

Economic Development and the Tahoe Reno Industrial Center

In all my running around networking in the community, it's always great to meet new people.  This morning I attended the monthly Network Business Connections (NBC) breakfast in Carson City.  The best part is getting out from behind the computer to actually meet people (wow, what a concept these days!).  And you get to sit next to folks and find out about what is happening at the grassroots level in the business community.

The guest speaker was Lance Gilman from the Tahoe Reno Industrial Center (TRIC).  For those that have either met Mr. Gilman or listened to him speak, you definitely have to say he speaks his mind and is a real character.  That said, he spoke about the current state of economic development in the region from his perspective as developer of the TRIC.  For those of you that don't know the basics about the TRIC, this is one of the largest industrial parks of its kind in the USA.  In just the first phase, the park will support 100 million square feet in the first 5,000 acres, nearly tripling the existing industrial space in the Reno/Sparks area.  Completely outfitted with rail, fiber, power plants and other upgraded municipal services, TRIC is designed to make the biggest economic impact the region has ever seen.

A major point that Mr. Gilman promoted during his talk was the key skill of selling.  In his review of his background he talked about selling boats in San Diego during the OPEC oil embargo of 1973-1974 when gas was not being sold for boating, the lack of real selling skills at a well known motorcycle company and the ups and downs of real estate.  In so many words, he said that selling is a matter of mindset and not to listen to the news or read the newspapers and instead focus on the aspirations of our customers.  He also said that we cannot use the past to predict the future anymore, particularly with all the uncertainty coming from our government officials these days (with that last part with a little colorful language - loved it!).

In the end, the point that we all heard loud and clear, was that if the business community wants more efficiency from our government entities, it is up to us.

A big thanks to Kris Holt for bringing Mr. Gilman to speak to the group and providing assistance to economic development in the region and the community at-large.

ProNet presentation - Getting the Most from Social Security

This week's presentation was quite timely for many of the members of ProNet that are over 50.  While all of us are thinking more about getting our next job, retirement is one of those things that is looming in the background.  And a big component of that retirement equation is Social Security.

While there may be some that will preach "doom and gloom" about Social Security, this was not the focus of our time with a regional representative from Principal Financial Group.  The strong message was that while the federal government is making cutbacks in service (no longer printing reports and not printing checks soon), there are many investment organizations such as Principal that have retirement experts that can help wade through the complicated process of how to best manage your decisions on when to claim and when to wait.

A nice, shiny handout covered the main points: know your benefit, understand your options and determine a plan to maximize your benefit.

First, in knowing your benefit, the primary issue is knowing your full retirement age and whether you choose to start receiving benefits at 62, full retirement age or age 70.  There are many factors involved in making this decision.  There are no cookie cutter solutions.  Much depends on your financial situation regarding how much you have saved, your current health, your marital status and your spouse's social security status.  This is where good advice is a must.

Second, in understanding your options, there are choices that you have that will make a significant difference in your overall retirement income and your tax situation.

• Regarding eligibility, you need to determine if you are eligible by working the minimum number of quarters (right now it's 40).  
• Regarding timing, you need to make a decision if you are going to elect to take benefits early or late (big difference in the amount of the permanent benefit).  
• How about working?  You need to consider if you want to continue working and earning a wage.  If you do, it could mean an issue with having benefits being withheld.  
• Taxes are always a concern and you should consult your tax person to determine the tax impact of receiving social security benefits.  
• There also is a spousal benefit.  If there is a significant difference in individual benefits you may want to consider the spousal benefit to help maximize your total household benefit.
• And, of course, there are special provisions - "claim and suspend", "claim now, claim more later" and "do-over". To find out if these apply to you, ask you investment representative, CPA or go to the Social Security website.

And last and the bottom line - just like anything these days, you need to determine your plan of action in order to get the most out of a government program, such as Social Security, that will be even more instrumental to our retirement going forward.   Just so you are prepared before you go to that first meeting with a financial professional, get all the following items together: your most recent Social Security statement, your most recent tax return, your most recent pay stub (if applicable), your latest statements from your IRA's, 401K's and other retirement plans, your latest statement of mutual funds and investments, copies of your life and disability insurance policies, copies of annuity contracts and your latest wills and trust documents.

A big thank you again to staff from Principal Financial Group and Wells Fargo Advisers for taking the time to present to ProNet on this critical and valuable subject.

Are you ready to play the "role" of your life?

Every Monday morning, ProNet Reno incorporates a great speaker in their general meeting.  (Full disclosure: I am the Director of the Outreach Committee for ProNet Reno.)  This week, Clare Dreyer, SPHR was our presenter this past Monday and she courageously asked a bunch of unemployed professionals to pay attention to the rapport that we can establish with just our body language and eye contact.

Clare Dreyer, SPHR

Clare began with using a movie production metaphor.  It worked great in getting the point across that as in the audition process for an acting role, we are "trying out" for the part of the successful job candidate.  If you have ever been in a situation where you have been rejected for a job that you really want, Clare made us all feel very comfortable.  She had been there before...  in spades.  From personal to professional relationships, she had seen the ugly side, emerged from those setbacks and started a successful consulting firm.  It's called Evolve³.  To find out more, check out her website - www.evolve3consulting.com. 

Above all, her main point was that relationships were key.  And what is key?  Understanding that hiring managers hire a person that fits into the role that the open position requires to be productive and fit into the group (read: it's a culture fit).  So how to get there?  Network!  Talk to people in the organization about working there.  Ask someone to give you a strategic introduction.  Ask lots of questions.  Create a relationship so that when something does come up, you are "top of mind".

We played a rapport building game that really got everyone thinking about how about the importance eye contact and body language.  With three people to a group, one presented a story while the other two acted out different levels of attention.  Putting us all in different roles made us all feel what it was like to be in someone else's shoes and then look at how to react when someone is really listening or not.

Clare's enthusiasm, southern charm and passion for creating success was felt by all in the room.  So much so that many felt that she should come back in the future to present to the group.