When War Closed the NYSE for Nearly 5 Months November 28, 2010

Silent Cal Knew About America's Business

On This Date in History:  When World War I first broke out, the United States was officially neutral.  Calvin Coolidge would later say as President that the business of America was business and that idea had already taken hold at the outset of the Great War.  America not only wanted to stay out of the war, but also expected the beligerants to adhere to international law and allow Uncle Sam to conduct business as usual.  That meant allowing the United States to continue to participate in free trade.  Well, the Brits weren’t about to give up their advantage on the high seas by allowing Germany to get supplies, even food, from overseas.  Any supplies that Germany got would add to its ability to make war.  So, the Royal Navy used its huge numerical advantage to use with a naval blockade.  The US was not happy that its ships were being stopped and searched or its ships were denied entry to certain ports.  But, typically, American merchants were simply escorted to British ports by the navy and their cargo was searched.  A process was also set up for damage reparation claims.  Fearing that good were getting to the Axis powers in an indirect way, the British expanded the blockade to include neutral Baltic states.

Sinking of Lusitania Changed American Attitude

The Germans did not have a surface fleet sufficient to blockade goods from the Allies so they went below the waves.  The Germans used their U-Boats, or submarines, to sink ships that were supplying the Allies, mainly through England.  The difference between the two was that the U-Boats dispensed with the dangerous, more acceptable practice of stopping and searching ships and simply began torpedoing ships without warning.  If the ship was suspected of supplying the Allies, the fish went in the water and down went the ship.  Activity such as this began to gain the ire of the Americans with the sinking of the Lusitania in 1915.

Solid Line Nominal Prices; dashed "real" prices

Most of the time, people think that war is good for business.  But, in this case, a compelling argument can be made that both before and after US entry into World War I, American business was adversely affected.  One casualty of the war was the stock market.  When war first broke out in 1914, the financial world was fearful of what would happen in international markets;  perhaps European stock holders would sell their equities and the market would crash.  So, in July 1914, the New York Stock Exchange closed and stayed closed for about 5 months.  The thinking was that, with the major stock exchanged closed in the US and others overseas disrupted by war, then it would be much more difficult for anyone to dump their stocks.  But, almost immediately, a curb or street exchange developed with traders working about a block from Wall Street matching up buyers and sellers for securities.  It provided some much needed liquidity and was referred to as New Street.  However, Uncle Sam ran into a problem.  The government needed money and raising taxes wasn’t enough.  They needed to sell bonds but without a market to sell its debt, then it was in trouble.  So, on this date in 1914, the only US exchange reopened on a limited basis.  Equities were still not traded but bond markets were re-opened.  A few days later, stocks resumed trading.  And, there was no crash.  But, there also wasn’t a war boom.  For the most part, the stock market went sideways except when one figures in the effect of inflation.  In that case, the real stock value was decidedly downward. 

Most of the time, we think of the US as being a wild west show when it came to financial markets prior to the Great Depression; that before 1929 there was no government regulation.  But, as this story illustrates, the Federal Government was indeed involved in trying to control market results.  In this case, it had the largest exchange in the world shuttered until the government needed it.  Talk about insider trading.  But, it was all about business and the declaration of Silent Cal was true before he was president and 80 years after his administration.  The business of America is business.

JP Morgan Rejects GM’s Pleas, the Company Thrives; Morgan Bails Out GM, The Founder Lost His Job September 16, 2010

Nice Guess

On this Date in History: I read an article from the Wall Street Journal from January of 2008. It read that oil prices were around $90 a barrel and were expected to remain around that level. It had a quote from a learned man who said, at that time,  that he expected the price of oil  to drop to about $67 a barrel.   While he didn’t put a time qualifier on the statement,  about 6 months after this artcle came out the price of oil was over $140 a barrel.  I related this story to one of my classes and one student said that it sounded like someone sucks at their job. The point is we often hear these great ideas and pontifications from “experts” that turn out to be wrong by a long shot, if not completely opposite of reality.

Durant Was No Quitter

At the dawn of the 20th Century,  animal power remained much of the energy that drove the economy, though certainly not as much as at the turn of the 19th Century.  Aside from the railroads, animal power was particularly necessary for transportation and for agricultural interests. A United States Senator, Chauncey Depew, said with full confidence that “nothing has come along to beat the horse.”  He suggested to those who might invest in alternative forms of transportation to “keep your money.” Now, one who is looked up to as one who had a great financial mind and who was quite savvy in investing was J. P. Morgan. Well, Morgan had a chance to get into the automobile business in 1908 when he was approached by William Crapo Durant for a loan. Durant and Benjamin Briscoe wanted financing for the proposed merger of their two fledgling automobile companies, Buick and Maxwell-Briscoe. Durant told Morgan that automobile sales would reach a half million per year. Upon hearing Durant’s prediction, one of Morgan’s partners sniffed, “If he has any sense, he’ll keep such notions to himself.”

Depew Left Holding the Horse Shovel

Well, the deal didn’t go through and Briscoe is left to the asheep of history. But Durant soldiered on without any backing of financiers and formed a holding company on this date in 1908 with $2000 and without J.P. Morgan. Instead, he sold shares of stock and raised about $12 million in a couple of weeks. He called it General Motors. He acquired Olds Motor Works later that year, then subsequently bought Cadillac, Pontiac (originally known as Oakland), Cartercar, Ewing and Elmore. But, in 1910, Durant was in a tight financial situation and he turned to competitors of Morgan for help. Durant apparently used the financing to continue to acquire other companies. That led to more problems but, by then,  automobiles were getting popular enough that I suppose JP Morgan had changed his mind.   Around 1920, General Motors found itself with $30 million in debt and huge obstacles ahead. Durant went back to Morgan and Pierre du Pont who were two giants of the financial world. The financiers saved the company but effectively finished off Durant at GM. See, part of the deal was that Durant was out and du Pont took over as President. But, don’t feel too bad for Durant. He’s one of those guys who never quit, following the advice of the old gridiron sage, Granville Hambright who often told his Junior High football players that “a winner never quits and a quitter never wins.”    Durant went on to found a new company. You might have heard of it…Chevrolet.

Sloan: Father of Modern Corporation?

Dupont served as President of GM until 1923 when he turned the reigns over the Alfred P. Sloan who focused his attention on managing the company more effectively. Ever wonder why there are new models to cars every year? It was Sloan’s idea. How about the different pricing structure of different brands in the company? That was Sloan too. By the late 1920′s, GM passed Ford as the leader in automobile sales.  For his company,  Henry Ford  focused his attention on more efficient manufacturing instead of management, marketing and finance. Later in the 20th century, GM became the largest corporation in the world…a title it later lost and did so in quite a spectacular fashion.

Ford Legacy: Don't Give Up Control

Some interesting aspects of this story. First off, it took the geniuses like Morgan a dozen years to figure out that a visionary like Durant was right all along. Durant had the vision but he didn’t have the know-how regarding making his dream come to fruition. What is interesting is that Henry Ford rebuffed the attempts of outside financiers to take over Ford Motor Company when things turned tough in the Depression. Yet, General Motors has an early history of near disaster before they got it right.

At the first part of the 20th century, General Motors needed help and so they went to private financial institutions for that help. When they were denied, founder Durant figured out a way to move ahead while some of his competitors went by the wayside. Then additional help came in the form of the previously reluctant Morgan. Ford probably worked with Morgan on a number of deals, but none with the expressed intent of saving the company. In fact, in the early 1920′s when Ford faced potential bankruptcy, Henry Ford turned down financing from big investment houses who required that Ford turn over control of the company, like Durant did. In the early 21st century, it’s deja vu. But, this time, General Motors turned to the Federal Government (taxpayers) to get saved and private investors (stock holders, bond holders) ended up with the short end of the stick. Instead of financiers like du Pont taking control of the company, the government fired the head of GM. Meanwhile, Ford did not take government money and continues to move forward and maintain control of the company, in the same tradition of the company’s founder, Henry Ford.   While Ford Motor Company in late 2010 still had about $27 Billion in debt, it had reduced its debt by $4 Billion, had positive cash flow and the outlook for Ford looks bright in some circles with some analysts project Ford having more cash than debt by 2012.  But, be careful, those are just “expert” opinions and remember, Morgan’s experts thought that the automobile was a loser investment 100 years earlier.  What a difference a century makes. In some ways, not one bit. In other ways, a huge difference.

Weather Bottom Line:  We got the light rain in the morning but it doesn’t look like it will help advance the notion of rain, let alone thunderstorms on Thursday evening or afternoon.  It’s just too stable an atmosphere and that’s too bad because we need the rain.  This was our big chance and it wasn’t too good to begin with.  Look for a pleasant Friday with a return to hot, but relatively dry, conditions for the weekend into early next week.

Villified Corporate Bosses Sometimes Are Great Americans February 25, 2010

Union Pacific Stock Certificate Artwork Symbolized Innovation and Progress of E.H. Harriman

"Think you used enough dynamite there, Butch?"

On This Date in History:  Do you remember the movie, Butch Cassidy and the Sundance Kid?   It starred Robert Redford as Sundance and Paul Newman as Butch.  It had some amusing scenes and some were actually based on some true events, though maybe not events associated with Butch Cassidy.  For instance, there was the great scene in which the Hole in the Wall Gang try to rob a train.  Woodcock was the man inside the car and he had been held up by Butch and Sundance before.   So, the second time, he refuses to open the door of the car and Butch uses dynamite to blow the door only to blow up the entire car.  Sundance asks, “think you used enough dynamite there, Butch?”  Well, I suspect that this type of event really happened only it was an event in the life of whom I called the worst outlaw in the old west, Al Jennings.  Now, part of the comedic aspects of these train robberies was Woodcock’s outspoken loyalty to Mr. E. H. Harriman.  As it turns out, E. H. Harriman was indeed a real person and a very powerful and influencial man.

Union Pacific Fell Hard and Fast After Triumph At Promontory, Utah in 1869

Episcopal minister Orlando Harriman and his wife, Cornelia Neilson, brought Edward H. Harriman into the world in Hempstead, New York on this date in 1848.  Young Edward hated school, dropped out at age 14 and became a broker’s boy.  He amazed the stock brokers at his ability to pick stocks.  By the time he was 21, he had his own seat on the stock exchange.   He got interested in railroads when he tried to revive some distressed rail lines owned by his wife’s relatives.  He apparently was the type of man who dove into his projects because he became very astute when it came to managing rail flow as well as the technological aspects of steam locomotion.  He also seemed to enjoy the challenge of rehabilitating depressed railroads.   So, he moved on to a more ambitious project: saving the Union Pacific Railroad.

Harriman Rebulding the Union Pacific in 1899

The Union Pacific had been one of the railroads that completed the transcontinental railroad.  But, by 1897, it was but a shadow of its former self as its equipment fell into disrepair, the business had become extremely inefficient and in general was behind the times.  In about a decade, E. H. Harriman had turned the Union Pacific into one of best run railroads and companies in the nation.  As part of his revival of the Union Pacific, he gobbled up weaker railroads in the West and Southwest in order to maximize profits and efficiency.  His business created a concentration of power in the transportation business that was vital to the American economy.  That got the attention of the great “trust buster” President Theodore Roosevelt.  He sued Harriman and the Union Pacific for violation of anti-trust laws and the US Supreme Court ordered that Harriman divest in 1904. 

Railroad Was A Wreck Until Harriman

Because Harriman adamently refused to explain his rationale, he is viewed in history as a robber baron who only wanted to make more money for himself at the expense of others.  But, like John D. Rockefeller, Harriman went about his business in an effort to maximize efficiency and a more efficient transportation system was a benefit to the economy and the nation as a whole. He didn’t buy railroads for a quick profit but instead believed that a more efficient operation and improvement to the railroad property would maximize profitability.  It can be argued that monopolies are the most efficient way to bring a product or service to the public but, that is dependent on having an honorable person at the helm.  However, pragmatically, the temptation to take advantage of the opportunities presented by a monopoly is extreme and the risk involved is just  too great to allow that to happen as a matter of  normal business.    Rockefeller defended his position and left a large portion of his enormous fortune to build the University of Chicago and the Rockefeller Institute and also greatly improve education of minorities in the South. 

John Muir Painted A Different Picture of E. H. Harriman

Harriman did not defend himself and, regardless of what he did, is largely remembered as an evil Robber Baron.  Nevertheless, had someone like Harriman not come along and improved the transportation system, the American marketplace and economy may not have evolved as quickly and with such gusto as it did from the late 19th century into the 20th century.  Harriman established standards for locomotives, cars, bridges, structures, signals, and even such items as paint and stationery.  And, he spearheaded an expedition to Alaska in 1899 that brought valuable knowledge to the science community.   He probably should be praised, not buried.  Naturalist John Muir, who founded the Sierra Club, wrote this about Harriman:

“Comparatively few have gained anything like adequate knowledge of the extent and warmth of his sympathies, but none who came nigh him could fail to feel his kindness, especially in his home, radiating a delightful, peaceful atmosphere, the finest domestic weather imaginable. His warm heart it was that endeared him to his friends, but in almost every way he was a man to admire—in apparent repose brooding his work plans, or in grand, overcoming, enthusiastic action shoving them forward, rejoicing and influencing all the country like climate; when silent in company, or at long intervals giving out something striking, saying the commonest things in unforgettable ways and making them seem uncommon in the new light flashed upon them; when severe and rigid as fate; or merry in friendly conversation, eye striking eye, thought clashing against thought making wit sparkles fly.” 

Does that sound like the Robber Baron presented to us in history?  Often, labels given by historians or popular culture do not fit the man.

Early Afternoon Saturday NAM Shows Low to Mid 30's....Dont Look For a Warm Up

NAM Nudges Us Over 32 by early Afternoon Despite less than 5400 thickness

Weather Bottom Line:  Now, yesterday, I told you that I am a bit handicapped by not having access to a Skew-T/Log P diagram, though I may have said Log P/Skew T.  This would be helpful as general rules of thumb come into conflict with reality when we have a change of seasons.  It’s good to be able to analyze what is happening.  So, I often have to rely on experience.  For instance, I saw forecasts for Wednesday that called for highs of 36, 37 or 38 degrees.  Now, a rule of thumb is that freezing conditions can generally be found when there is a 1000mb – 5oomb thickness of 5400 meters or less.  Different times of year and other variables mess that up but, in this case, we are still in winter, the forecast was for cloudy skies and with light snow or flurries all day which would tend to drag cold air down.  The thickness forecast for the models had it going from 5230 mb to 5130 mb.  I could not figure out how in the world we would get above freezing if all of those factors came to pass.  For all practical purposes, we did not.  The high at the almost always warmer than everyone else airport was 33 and that was at 12:39 AM.  The low was 27 at 1:25 pm and we stayed in the upper 20′s for most of the day.  So, its stuff like this that often causes my puzzlement.

Our Adopted "Paintbrush" Fits the Bill

Anyway, I had surmised that we we’d have light snow all day but because it fell over a long period, accumulations would not be an issue and that was correct, though I think most people got more than the trace of snow reported at the airport.  Now, by Wednesday evening, we had some decent light snow bands coming through and the ground became covered in snow and the roads slick in spots.  It was enough for Snow White to go out and cover up our adopted outdoor kitty cat, Paintbrush, though she refrained from using the expensive robe I gave her and instead used fleece blankets.  That has got to be the most pampered stray cat of all time.  He gets all the food he wants, has time to chase birds or the ladies at his leisure and can return to a pampered bed.

Early Sun AM, GFS has freezing line well south and wrap around moisture from Low in New England over Ohio Valley. Doesn't look like the 40's to me.

The outlook continues to be cold.  That little warm up we had last weekend was simply an fluke and the pattern shows no signs of changing.  Over the next couple of days, the thicknesses do increase a bit and we get sunshine.   So, even though after lingering snow flurries or light snow early Thursday the thickness only rises to about 5300 meters, we get some sunshine so that should get us to 34 or 35, if the sun does show up.  So, that call has some merit.   After that though, through the weekend, its hard to draw a conclusion to support temperatures much beyond 40.  I mean….maybe some of the forecasts that I see of 43 or 44 come about, but I don’t get it.  In fact, there is a big fat snow snowstorm that you will hear about because it bombs out going up the east coast, stops off of New York Harbor and then backtracks into New England where it stays put.  Parts of the Northeast should get buried in a couple of feet of snow and David Letterman will probably be talking about weekend snow on Monday night.  I suspect that storm will help drag down cold air for the weekend, perhaps some clouds and maybe even some flurries or weak light snow bands.  So…I don’t get how we get to 40.  After that, there had been indications of a potential event around here…first it was snow then it looked like maybe a severe outbreak in the southern plains, but now some indications are that the big trof in the east persists and we get nothing like that.  I’m guessing that the longer range models are having a conflict between reality and the climate parameters built into the programming.  For that reason, long range modeling will probably be in flux and the data largely unreliable.  Eric…that is your answer.

Car Ahead of Its Time For All Time February 17, 2010

1946 Volkswagen

Volkswagen 1975...not much difference after 31 years

On This Date in History:  Back in the early 1930′s, the world was mired in a global depression.  Europe was still reeling from the effects of the First World War.  Consumer consumption of products was low.  So, in 1933, the United States swore in a new president.  Franklin D. Roosevelt went about trying to revive the American economy.  In Europe, the leader of a nation went to a young automobile engineer with a proposal that was in the form of a demand.  Ferdinand Porsche had developed a reputation as an outstanding designer during his tenure at Daimler-Benz and Auto-Union and had developed his own consulting business.  He was asked to come up with a small car that seated four people, had a durable air-cooled engine that got 4o miles per gallon and was priced at less than $250 (1000 German Marks).   The leader of Germany even had a name for the yet-to-be-created car:  The Volkswagen which means “people’s car.”

What was mistaken (by me) as a 1944 Volkswagen Wartime Staff Car Variation Is Really A Mercedez Benz 170 Da OTP(Open Touring Police) as per it's owner, Richard.

Of course, the leader was Adolph Hitler and a few months later, he ordered 3 prototypes to be built and also more or less ordered the nation’s manufacturers to supply the parts.  Porsche was in a fix.  The engineering was not the problem but instead it was the economics.  The man who perfected the mass production of automobiles, Henry Ford, turned out cars at a low cost but even his cars ran about $800.  It was a daunting task to undercut Henry Ford by over 2/3 and still produce a quality car.  Given that the request came from the German Chancellor who was gathering unrivaled political power through both legal and violent means, the pressure must have been enormous.   But, old Ferdinand had a secret.  See, Hitler demanded delivery of the prototypes in just 10 months but Porsche was ahead of the game.   The year before he had designed a rear engine, air-cooled small car on his own.   But, there was the issue of the cost.  So, it was back to the drawing board.

VW Kubelwagen 1944-Germany's Answer to the Jeep

But Porsche had other interests as he split time with his efforts to help German racing teams and he was more interested in that than in living up to Hitler’s public announcements that soon there would be an affordable car for all Germans.  And the German Automobile Manufacturers Society wasn’t exactly racing to provide materials because they knew all they were doing was helping create a new competitor in the market.  Porsche though was still pushed so he went to America to take notes on how the Americans mass-produced cars.  He determined that there was no way that the German financial system could support the development of such an endeavor and that the government would have to do it.  As it turns out, before production of the people’s car could get off the ground, Hitler started invading countries all over Europe.  The factory never delivered what has become known as the Beetle.  Instead, the factory was retooled and an stronger, more powerful rear engine  open vehicle was created called the Kubelwagen.  It had similar capabilities of the American Jeep.  It also served as the German Staff Car during the war.  Later, the Kubelwagen variation created by Porsche came back to life as the VW Thing.

1974 VW Thing Looks A Lot Like 1944 Kubelwagen

But, the Thing came about after the Beetle and the Beetle, aka the people’s car, did not come to life until after the end of the Second World War.  The factory fell into the British zone of divided post-war Germany.  The British needed to keep workers busy so, after finding the blueprint of Porsche’s design, the put the factory personnel to work.  By 1948, the British put BMW designer Dr. Ing. Heinz Nordhoff in charge of Volkswagen.  Nordoff remained at the helm when the plant was turned over to the new West German government and by 1955, Beetle number 1,000,000 rolled off the assembly line as the first European car to ever achieve such a production level.  But, they weren’t done.  Americans stationed overseas had first brought the Beetle to the states as a second car.  But, quickly, the car that was dwarfed by the mammoth cars put out by Detroit fulfilled Hitler’s promise to the American people.  While it was slow and quite small, the Volkswagen was very durable, required little maintainance, was very miserly with gas compared to American gas guzzlers and was generally affordable for people who otherwise could not afford cars. 

Porsche: The Real Genius Behind the Beetle

Henry Ford with his Model T had acheived that objective before the Beetle, before Hitler and before anyone else.  But, by the 1950′s Detroit kinda moved away from that business model and the Beetle fit that nitch market quite nicely.  And it continued to do so.  On this date in 1972, Volkswagen put out Beetle number 15,007,034 rolled off the assembly line to surpass Ford’s Model T for the most produced car in all of history.  While Volkswagen became the name of the company instead of the car, and the original Beetle model was eventually discontinued in the United State and replaced by a new, more expensive Beetle with more of the luxuries that Americans demand, the old model Beetle remains in production in Mexico.   Seems that every time I’ve been in Mexico, the cab I rode in was either a Beetle or a Thing…both relics of World War II.  Most people though think that Hitler came up with the Beetle and he didn’t;  it was Ferdinand Porsche.  And what became known as the Beetle wasn’t even offered to the public until after the war.  I think the story of the People’s Car is a good metaphor for Hitler in some regards because he falsely took credit for someone else’s genius and he then made a promise to the people that he never kept.

NWS snowfall depiction through Tue Feb 15 2010

Weather Bottom Line: I don’t have much to add today except that I had about 4.5 inches of snow at my house and the National Weather Service had an official total for the event through early Tuesday of just around 4 inches with the weather service office closer to 5 inches or so.   Yet, the newspaper trumpted in it’s headlines Tuesday morning “6 Inches and Counting.”  It reminds of of the flood in parts of the city in early August when the paper quoted all of these rain totals that were based on rumor and not fact as no measuring device could come close to verifying what city officials and the paper claimed.  But, to be sure, some folks got a little more than 5-6 inches of snow and some got less.  From driving around it seems like Jefferson County got 4-5 inches in general with the 6-8 inch totals falling north of the river or northeast of Louisville.  The NWS made a very general map seen above.  A few flurries on Wednesday and it stays cold.  The next system seems to be falling behind with the models and there is a better than fair chance that we warm up a little and get rain for the second half of the weekend before a little snow on the tail end for Monday.  But, there is no consensus with this solution except that the GFS is starting to show some consistency. We’ll have to see how it shakes out over the next few days but I strongly suspect its more of a rain event than snow.

Hundreds Dead, Thousands Homeless and Hungry in El Salvador Following Hurricane Ida November 12, 2009

Is Flooding In El Salvador News To You?

Thousands Homeless in El Salvador

While Hurricane Ida fizzled, as expected, prior to making a US landfall near Mobile, AL it’s previous life was much more eventful and devastating.  In El Salvador, well over 100 people are dead and scores more missing after some of the mountainous areas of the Central American nation got 14 inches of rain in just four hours.  (See photo gallery)  Some 10,000 in El Salvador are in need of food.  However, from reading the reports, one can surmise that all of the rain that El Salvador received was not directly related to Hurricane Ida.  Reports claim that it rained for 5 days and US Navy Meteorologists suggest that an area of low pressure was drawn in from the Pacific in the wake of the tropical cyclone as it passed by.  But the bottom line is that rain brought mud and boulders cascading down the side of a volcano that buried towns and villages.  There was fear of such an event in the Philippines when Typhoon Mirinae crossed the region of the active volcano Mount Mayon.  Those fears were not realized but El Salvador did not fair as well.  Nicaragua took the initial impact of the minimal hurricane on November 5, 2009 and reports of damage and flooding as well as contaminated water supplies have prompted relieve efforts from Catholic Relief Services to that nation.  Some are comparing the rain and devastation to Hurricane Mitch in 1998 that killed some 11,000 in Honduras, Nicaragua and El Salvador and neighboring Central American nations.

The Commodore Was Stylish

On This Date in History:  Commodore Cornelius Vanderbilt was worth $104 million when he died on January 4, 1877 at the age of 83.  That was about $2 million more than the US Treasury had in its possession.  Literally, richer than the government and, therefore, perhaps almost as powerful.  In 2007 inflation adjusted dollars, the figure comes to over $2 billion.  He made 90 percent of his fortune from railroads.  The odd thing is that Vanderbilt hated railroads and wanted nothing to do with them until he was 68 years old.   In his lifetime, railroads represented the new emerging market, so why would he be so adverse to such a once-in-a-lifetime investment opportunity? 

Early Locomotive on Camden & Amboy RR More Like Iron Pony Rather Than Iron Horse

Well, Vanderbilt had done quite well for himself with a fleet of schooners that he contracted out to the US government to supply forts. That’s where he got the nickname “Commodore.”  As the steamships came about, he took advantage of that new technology and also subverted to law to make gains in that business.  Ultimately, he was vindicated by the US Supreme Court that broke a New York State monopoly granted to Robert Fulton.  Steamboats were fine for him but not steam locomotives.  His aversion dated back to this date in 1833, when he lay near death.  Cornelius Vanderbilt had the unfortunate distinction of being part of the nation’s first railroad accident the previous day.  He was a passenger on the Camden and Amboy Railroad bound for Perth Amboy, New Jersey.  An axle broke and the train jumped the track.  In America’s first fatal train wreck, two people were killed and the Commodore was left with two broken ribs and a punctured lung, which was often a fatal condition in 1833.  Riding in the car ahead of him was former President John Quincy Adams who was not hurt.

NYTimes Saw Vanderbilt as the New Colossus

The Long Island Railroad provided service between Boston and New York with a steamboat transfer.  Guess who owned the steamboats?  In 1844, Vanderbilt was elected as Director of the Long Island Railroad and in 1857, he got the vote as the Director of the New York and Harlem Railroad.  I suppose as director of two railroads, he could see the potential financial windfall and the dollar signs in his eyes overcame any psychosis he had in his head.  Secretly, he began selling his assets in the steamboat business and began buying up shares of the New York and Harlem Railroad in 1862.  He was worth $11 million when he began he started riding the Iron Horse and he never got off.  The stock soared to $50 a share.  He then bought the Hudson River Railroad in 1864 and then the New York Central Railroad in 1867.  While the Civil War raged on, it was business as usual for men in the North like Vanderbilt.  His acquisitions continued with some controversy but, eventually, he owned a railroad network that connected the eastern seaboard to the western frontier in the northern plains.  Wonder what he would have done had he really liked railroads?

Stock Market Crashed in 1929; 80 years later some say we are in recovery October 29, 2009

Brooklyn Newspaper Oct 30 1929

Until you have a job, it's a depression, not a recession or recovery

The GDP numbers for the third quarter of this year came out today and after months of contraction in the economy, the US Gross Domestic Product rose by about 3.5%. How can that be? Some say we are in recovery while others say it can’t last.  Critics point out that there was about a 23% increase in durable goods and that the overall increase cannot be sustained. They point to the US government’s “cash for clunkers” program and that created a one-time, artificial jump in new car sales. It is said that it is not sustainable. Then there was the real estate numbers which also rose about 23%. That too, critics say, was a result of another government program of giving several thousands of dollars in tax credits to first time home buyers. That too is seen as unsustainable. Interest rates have been near zero for a long time now and now there are fears that the Fed will raise interest rates, though others point out that a rise in interest rates would indicate that the economy can handle it and that the economy is indeed pulling out of the recession.  Then there is this oddity.  Edmunds.com is a site that is an advocate for car buyers.  Their analysis of the cash for clunkers program says the government spent $24,000 per car sold, which is about 6 times more than the actual allowance provided.  They say that only 125, 000 of the 691,000 cars sold were directly tied to cash for clunkers.  While that’s a criticism, is that not also an argument that car sales were indeed real and not a facade?  Yet, the government disputed their numbers as if to say, “hey…those car sales were too ginned up by our program and not a real indicator of growth!”    Of course, theI have yet to hear about this duplicity in the media.

Who knows?  No one predicted the big decline in the economy, yet we are supposed to believe that the sages know what will happen in the future.  If you look at the chart below, you see that after the crash of ’29, the markets rose several times over the next 3 years, only to fall farther.  So, who knows what will happen.  One thing that is for certain.  Millions remain without jobs and until those who want to work can get work, it matters little what the data shows or the experts say.  If you have a job, its been a recession.  If you are out of work, it’s a depression.  Which is what began 80 years ago.

1929 Wall Street Panic

On This Date in History: On this date in 1929, the stock market crashed. The Dow had been quite

Dow Chart Before & After 1929 Crash

volatile before suffering a sharp drop on Oct 24 and then again on Oct 28. On Tuesday October 29, 1929, a day that became known as “Black Tuesday,” The market collapsed. 16 million shares of stock were sold as prices tumbled with a loss estimated at $9 Billion, which was a lot of money back then. The decline continued and by mid-November losses totaled some $30 Billion. (Video from 1929)

Fortunes were lost and eventually jobs were lost

Panic at the Exchange 1929

and then there was the Depression that followed. Many historians of economics suggest that it was not the stock market crash that caused the depression, but rather governmental action and reaction that caused the economic malaise. Congress passed the Smoot-Hawley Act that raised tarriffs on 3200 imports by 60% in late September. On October 21, Congress defeated an attempt to exempt agricultural goods. Three days later, the market began its decline. President Hoover could have vetoed the measure but instead signed it 7 months after its passage and the resulting market crash. Prices on many good rose. Taxes were also increased. This is why you hear politicians today say that now is not the time to raise taxes and not the time to be closing the global market place.

Why would they say this now?  Last year, we were  in a stock market decline with shares falling some 40% from the all time highs from the prior year. I have compared this with the panic of 1907.(Click Here) However, I must say that history is not prescriptive and what happened in the past does not necessarily repeat itself. The times and conditions are different on a number of levels.

Dow: A Long Recovery

Nevertheless, if you must look at history as a guide, you need to know the truth. In general if you bought stock at the highs in 1929, you did not see your portfolio back to even for 25 years. Some individual stocks took longer than that. The speculation running rampant in the “Roaring 20′s” was probably more comparable to the run up in the market in the 1990′s than this past run. The decline in the late 1920′s into the 1930′s was about 87%. An 87% of a drop from the Oct 2007 highs would be about 1700 which would take us back to the 1980′s. Last fall’s decline took us back to numbers we had in late 2001 and early 2002 then they fell even farther before bottoming out in March 2009.  Now, we have rebounded to near 10,000.  So, we’ve gone up and down and up and down again in the past 10 years, which is not comparable to the 1920′s, 30′s, 40′s and 50′s.

Anyway, with all that in mind, I offer you this. It is an excerpt of a letter written by Earnest Elmo Caulkins to

Caulkins: Confident Investor

the New York Times on this date in 1929, the day after “Black Tuesday.” Caulkins was a successful advertising executive who had a rather extraordinary life story.(Click Here) He was deaf but was an achiever who did not let his disability get in his way. It’s really remarkable when you consider that he did this in the late 19th and early 20th century when it was particularly difficult for deaf individuals living in a hearing world.

He began by saying “I have a feeling that fewer persons are affected by the stock market drop than one would infer from the figures, just as fewer persons were affected by the previous rises.” That can be said today but not entirely. Today, millions of Americans have pension plans and 401K plans that are affected. For instance, I have a 401K but its decline does not affect my standard of living today.

He goes on to say that one day, the men on the market decide his AT&T stock is worth $310 and a few weeks later $232. He bought the stock at $98, so he is disappointed but he doesn’t consider it a loss. First off, he points out that its still more than twice as much as what he paid for it. So, to suggest that lumping he and other together and say that millions have been “lost” is a false implication. Compared to the previous day its a loss but compared to a few weeks before, he’s even and compared to prior to that, its a gain. I think what he is pointing to is the only difference is time. Millions of shares were NOT traded and for those who did not trade, what was a great position of happiness and wealth in September was being characterized as a position of gloom and despair in late October.

He went on to review his portfolio and said that his previous high profits were on paper and his recent losses were on paper and reasoned that the two cancel each other out. He concluded with a story of a farmer who told his friend that Mr. Stebbins offered him $200 for his horse. The friend replied, “But Stebbins ain’t got $200.” The farmer answered, “yes, but ain’t it a good offer?”

Much of what Caulkins says here is true today. The Dow at the end of Jan 1980 was at 874.40. Oct 28, 2008 it closed at over 9,000. Yet, in October 2007, the Dow hit 14,000. When I worked at Merrill Lynch, my office mate, Martin Feinberg, used to say “Stocks go up and stocks go down.” They do. The question here is time. We like it when stocks go up quickly but then get upset when they fall quickly, as if one is normal and the other is a crisis when, in fact, both signal volatility.

I have always reasoned that it is not wise to “play the market.” Over the past 30 years, people have entered the stock market like they are going into Churchill Downs to bet on the ponies. Men like Caulkins entered as investors.

Lombardi:Inspirational Quotes

I guess what I am saying is that it’s silly for people to claim this is 1929 all over again. I took a look at 1907 but I never suggested that this was 1907 all over again. That was then. This is now. The future has yet to be written. It is often said that it’s not whether we face adversity but how we react to adversity that counts. I’ve read a quote from Vince Lombardi(inspirational quotes) (origin probably elsewhere) that said “the greatest accomplishment is not in never failing, but rising again after you fail.” The past is the past and its how we conduct our future, whether it be governmental policy or personal actions, that really counts. With global intervention, coordination and new policies, this may be the beginning of a turnaround and, then again, it may be the beginning of a long fall. Who knows for certain? But, I do know that nothing lasts forever either way. If you believe that the sun rises every day and will again on this nation, this economy and the global economy, then invest in the future. If you do not, then stay out of the market. In my view, its as simple as that. Mr Caulkins overcame his disability and had great confidence in the future. You need to ask yourself if you have the same ideals.

Rain but not as much as feared

Weather Bottom Line:  I made a mistake yesterday.  I thought that Halloween was on Friday. It’s on Saturday.  I never know what day it is.  I took a quick looksee at the models and I’ve got a bit of a dillema.  See, the GFS numerically claims that rain begins lightly on Friday morning then more in earnest by late Friday and then carries it through Sunday for a total of about 1.33″.  Yet, when you look at it graphically, it advertises all of the rain is out of here by Saturday afternoon.  Now, the NAM is a bit more consistent as the numbers reveal .77″ from Friday evening through midday on Saturday and the graphic presentation shows the same thing.  Either way, neither model is bullish on the big rain event that loomed in yesterday’s numbers and some folks on TV decided to take as Gospel.  It was never really forecast but, the area was reasonably close to keep an eye out for that possibility. 

Now the HPC rain forecast has come in line with what my contention was several days ago, which was that the convergence zone is really in the lower Mississippi Valley and I had reasoned that would be the area of big storms and that it might tend to cut off the moisture our way.  Well, now the 3-day total QPF from the HPC indicates over 4.5″ inches of rain in that convergence region and just about an inch around here.  All of that seems reasonable.  So, my bottom line is that it will be cool for the trick or treaters but probably dry.  Look for rain activity from say noon on Friday to noon on Saturday.

Brits Selling “Imitation Liquor” to High School Kids in Maine? Keep Up with your Zipper! October 28, 2009

No Drinking in Class!!

Imitation Liquor?

No Booze for the Kids!  Seems that Fentimans has been selling lemonade in Great Britain for over 100 years.  It marketed their product as Fentiman’s Victorian Lemonade.  They say that its effervescent and” it’s not cloyantly sweet…you don’t even notice the sugar.”  Apparently, you also don’t notice the booze.  The company encourages one to “drink it straight”  or to “use it as a mixer with gin, vodka,  Pimm’s N0. 1 Cup or any other cocktail that uses bitter lemon.”    What they don’t say is to take it to school and apparently a school in Maine objected to a kid having a kid of Fentiman’s Victorian Lemonade with 0.5% alcohol.   Apparenlty, the kid in question had it in school and looked at the bottle’s label and noticed the alcohol content.  He didn’t want to get into trouble so he took it to the teacher. Since he had no intent to break school rules, he was not disciplined,which is a far cry from the case of the kid who got suspended for bringing a pocket knife to school.  End of story? No. That’s because according to the Bangor Daily News, “officials from the Aroostook Substance Abuse Prevention Coalition and the Maine Alliance to Prevent Substance Abuse recently learned that a Houlton High School student brought a bottle of Fentimans Victorian Lemonade to school that was purchased at a local store.”  In other words, another group of do-gooders can’t just leave well enough alone.  Perhaps this will start another War of 1812.

Who Invented It?

On This Date in History:

Back in the day, there were no zippers. Pants were fastened in the front with buttons. For some reason, some jean manufacturers have gone retro with buttons. But, zippers are everywhere. Quite handy, they are. There have been some attempts to improvement with the space age velcro but the original zipper just keeps zipping along. It has been described as one of industrial America’s “most successful products.” It’s one of those little items that, if you think about it, would make you a fortune if you owned the patent. But, the genesis of the device did not exactly slide along…there were hitches.

Whitcomb Judson-Quit Too Soon

In 1891, Whitcomb Judson applied for a patent for “Clasp Locker or Un-Locker for Shoes.” The patent office had never heard of such a thing, he got the go ahead. He teamed up with the only person who saw any promise in the apparatus, Col. Lewis Walker. Walker set up the Universal Fastener Company in 1894 as a manufacturing source. Trouble was, they couldn’t develop a machine to make the contraption until 1905. Walker scheduled a demonstration, ordered a keg of beer and I guess everyone got drunk because the machine didn’t work. Back to the proverbial drawing board they went and Judson came up with a simpler version of the fastener. The called it the C-Curity fastener. They advertised with the slogan, “A pull and it’s done! No more open skirts…ask the girl!” Well, they should have asked the girl first because the fasteners tended to pop open at most unintended times. The whole campaign and the product became a joke and Judson quit in humiliation.

Sundback's Patent

Walker continued on working through meager personal financial times and came up with the prototype for the modern zipper in 1913. However, saying Walker was “working” on it is a bit of a misnomer. See, he was a entrepreneur and lawyer, not a tinkerer. Judson was the one who did all of the work. Walker’s company, the Universal Fastener Company, had hired Swedish

Gideon Sundback-Not Left Out

engineer Gideon Sundback (aka Gideon Sundbach) who is the one who perfected the zipper and it worked wonderfully. But, memories were long and people remembered the garment opening experience with the C-Curity fastener. On This date in 1914, the first true zipper, the Hookless No. 2 was sold. But the sales mainly were for actors costumes and novelty items. The public relied on the trusty button…that is until 1917. That is when a tailor made money belts for sailors with zippers. The moniker “zipper” was attached by BF Goodrich…the tire guy. They made galoshes and put the fasteners on them, though I can’t imagine how practical that was since galoshes generally get wet and I bet the original zippers were made of steel that rusted. Anyway, BF Goodrich promoted the product by exclaiming “Zip’er Up, Zip’er down!” Zippers became the trademark for the galoshes. Even though the overshoes went out of style, the zipper carried on….and carried Colonel Lewis Walker all the way to the bank. He owned the company and got the money while Gideon, who was given the patent, got credit….hopefully that credit was not backed by sub-prime mortgages.

Black a benificiary of the sage Hambright Advice

Unlike other stories in which the guy who does the work gets the shaft, Gideon Sundback also invented a good machine to mass produce the zippers. Zippers were mainly used in Tobacco pouches and boots until the 1930′s when the zipper came into widespread use in clothes. Sundback ran his own company, the Lightning Fastener Company…so everyone did well with the zipper…except for Judson whose fate reminds me of what my old Junior High Football Coach, Granville Hambright, used to say. “A quitter never wins and a winner never quits.”  One guy who learned under the tutelage of Coach Hambright and did not quit but perservered and it led to great success was none other than Clint Black, who sat next to me in Mrs. Wagner’s art class.  Maybe coach was on to something.

Friday Morning-Triple Point Near

HPC QPF (Forecast Rain Total Wed Eve. thru Sat Eve)

Weather Bottom Line:   Look for a period of excessive rain to end the week. In other words, Halloween looks like it will suck, which is fine with Snow White because she can’t stand the day.  Oh and by the way…these news people keep on referring to it as a holiday. It’s not a holiday!  Silly day maybe..but holiday NO! Anway,  as I had mentioned previously, we have a situation of strong convergence in the lower Mississippi Valley.  It is in this region that the SPC has the slight risk for Severe Thunderstorms for Thursday morning into Friday morning.  That is not so much the issue for us.  We had generally over an inch of rain on Tuesday night, which was a little bit of a victory for me considering that I had called for the main rain on Tuesday night but got bit on the backside with the light rain that fell from midday into the late afternoon on Tuesday.  Anyway, The main storm system is lifting up to the north into the northern plains.  As it does so, it is becoming a mature system which means it is developing an occluded front.  Typically, that means slowing down.  And that is the problem.

GFS Rain Accumulation Thru Midday Sat

All of that convergence to our south is bringing in all sorts of Gulf of Mexico moisture.  As we go through Thursday, that moisture will be surging up the Mississippi River Valley into the Ohio River Valley over the top of a warm front  Boom…there is the rain.  Now, the occluded front extending down from the slow moving main low to the north will be crawling and the triple point of the occluded front, the warm front and the cold front will be quite near.  I would not be surprised to see a secondary low begin to develop just to our southwest at this triple point.   All of this means is that its gonna rain.  We may get too much rain or we may get way too much rain. 

NAM Rain Accumulation Thru Midday Sat

The GFS is more bullish with rain totals of about 2.5 inches through midday on Saturday.  The NAM is more tame at about 1.25″ through midday on Saturday.  But, in both cases, the main channel of even more excessive rain is just to our west.  The Hydrological Prediction Center has its QPF total (quantitative precipitation forecast) for Wednesday night through Saturday night has Louisville getting about 1.5 inches of rain.  BUT…you only have to go to the western part of Southern Indiana…about half way between Louisville and St. Louis…to get to a forecast amount of around 4 inches.  Given that forecasts are not always that accurate this far out and with that type of certainty regarding coverage areas (which is understandable given that the earth is 25000 miles around so 100 miles is not that big of an error) then it is reasonable to assume that we at least have a risk for excessive rain.  The National Weather Service has made such a preliminary suggestion.  Given that it is not out of the question that a low could form on that triple point nearby, I would say that it is at least something worth considering.  In any event….you may want to find an alternative for trick or treaters or at least give them some sort of plastic covering…and maybe something warm as it will probably be fairly cool to go along with the dampness.

Once Upon a Time, General Motors Didn’t Get a Bailout September 16, 2009

Nice Guess

On this Date in History:  I just read an article from the Wall Street Journal from January of 2008.  It read that oil prices were around $90 a share and were expected to remain around that level.  It had a quote from a learned man who said that he expected the price of oil at that time to drop to about $67 a barrel.  Now, he didn’t put a time qualifier on the statement but just about 6 months after this artcle came out, the price of oil was over $140 a barrel.  My student said that it sounded like someone sucks at their job.  The point is we often hear these great ideas and pontifications from “experts” that turn out to be wrong by a long shot, if not completely opposite of reality.

Durant Was No Quitter

At the dawn of the 20th Century, animal power remained a large part of the energy that drove the economy.  Particularly when that involved transportation.  A United States Senator, Chauncey Depew, said with full confidence that “nothing has come along to beat the horse.”   He suggested to those who might invest in alternative forms of transportation to “keep your money.”  Now, one who is looked up to as a great financial mind who was quite savvy in investing was J. P. Morgan.  Well, Morgan had a chance to get into the automobile business in 1908 when he was approached by William Crapo Durant for a loan.  Durant and Benjamin Briscoe wanted financing for the proposed merger of their two fledgling automobile companies, Buick and Maxwell-Briscoe.  Durant told Morgan that automobile sales would reach a half million per year.  Upon hearing Durant’s prediction, one of Morgan’s partners sniffed, “If he has any sense, he’ll keep such notions to himself.”

Depew Left Holding the Horse Shovel

Well, the deal didn’t go through and Briscoe is left to the asheep of history.  But Durant soldiered on without any backing of financiers  and formed a holding company on this date in 1908 with $2000 and without J.P. Morgan.  Instead, he sold shares of stock and raised about $12 million in a couple of weeks.   He called it General Motors.  He acquired Olds Motor Works later that year, then subsequently bought Cadillac, Pontiac (originally known as Oakland), Cartercar, Ewing and Elmore.  But, in 1910, Durant was in a tight financial situation and he turned to competitors of Morgan for help.  Durant apparently used the financing to continue to acquire other companies.  That led to more problems but  I suppose that automobiles were getting  popular enough that JP Morgan changed his mind.  Around 1920, General Motors found itself in $30 million in debt and huge problems ahead.  Durant went back to Morgan and Pierre du Pont, two giants of the financial world.  The financiers saved the company but effectively finished off Durant at GM.  See, part of the deal was that Durant was out and du Pont took over as President.   But, don’t feel too bad for Durant.  He’s one of those guys who never quit, following the advice of the old gridiron sage, Granville Hambright.  He went on an founded a new company.  You might have heard of it…Chevrolet.

Sloan: Father of Modern Corporation?

  Dupont served as President of GM until 1923 when he turned the reigns over the Alfred P. Sloan who focused his attention on managing the company more effectively.   Ever wonder why there are new models to cars every year?  It was Sloan’s idea.  How about the different pricing structure of different brands in the company? That was Sloan too.  By the late 1920′s, GM passed Ford as the leader in automobile sales and Henry Ford had focused his attention on more efficient manufacturing instead of management, marketing and finance.  Later in the 20th century, GM became the largest corporation in the world…a title it later lost and did so in quite a spectacular fashion. 

Ford Legacy: Don't Give Up Control

Some interesting aspects of this story.  First off, it took the geniuses like Morgan a dozen years to figure out that a visionary like Durant was right all along.  Durant had the vision but he didn’t have the know-how regarding making his dream come to fruition.  What is interesting is that Henry Ford rebuffed the attempts of outside financiers to take over Ford Motor Company when things turned tough in the Depression.  Yet, General Motors has an early history of near disaster before they got it right. 

At the first part of the 20th century, General Motors needed help and so they went to private financial institutions for that help.  When they were denied, founder Durant figured out a way to move ahead while some of his competitors went by the wayside.  Then additional help came in the form of the previously reluctant Morgan.  Ford probably worked with Morgan on a number of deals, but none with the expressed intent of saving the company.  In fact, in the early 1920′s when Ford faced potential bankruptcy, Henry Ford turned down financing from big investment houses who required that Ford turn over control of the company, like Durant did.  In the early 21st century, it’s deja vu.  But, this time, General Motors turned to the Federal Government (taxpayers)  to get saved and private investors (stock holders, bond holders) ended up with the short end of the stick.  Instead of financiers like du Pont taking control of the company, the government fired the head  of GM.   Meanwhile, Ford did not take government money and continues  to move forward and maintain control of the company,  in the same tradition of the company’s founder, Henry Ford. 

What a difference a century makes.  In some ways, not one bit.  In other ways, a huge difference.

Rain Mainly South Thu Evening

Weather Bottom Line:  The other day I told you about the inverted trof to the south and the front to the north and I opened up the possibility that the front might sag farther south and, if it did, our rain chances would not be so good.  Well, that’s the story.  While we may have a errant shower or two, particularly to the south, rain chances probably won’t get to anything worthwhile until the second half of the weekend when a storm system from the southwest may lift at least toward our way.  Hey, it’s September….one of the driest months in Louisville annually.

Telephone Development Aided by the Undertaker August 27, 2009

Smart's Shoe Phone Never Really Took Off

On This Date In History:  We’ve come a long way with telephone technology in a relatively short period of time, but the shoe phone didn’t really catch on.  Nevertheless, the genesis of the modern telephone system has an unlikely twist.  Almon Brown Strowger was a late 19th Century undertaker in Kansas City. For some reason, his business was in decline. People were still dying but somehow he missed out on much of the action. Then one day, a good friend passed away. Either through sloppy work or skulduggery, the operator of the local phone exchange failed to notify him and his competitor got the work. Convinced that the operator was in cahoots with the guy across the street, Strowger set out to invent an automatic exchange so that people could contact him directly and avoid operators on the take. Up until the late 19th Century, if one wanted to call someone, they had to crank up the phone for power to talk to an operator. The caller would tell the operator to whom they wished to speak and the operator connected the call. Strowger eliminated that. After filing several patents, Strowger first introduced his Automatic Telephone Exchange in 1892 in La Porte, Indiana. By then he was out of the mortuary business and declared that the “telephone girl would have to go, but she would only be following in the footsteps of the messenger boy whose services were dispensed with by the invention of the telephone.” Strowger wasn’t finished.

 

Obnoxious Operator Ernestine

In 1896, the Bell System, which until 1894 had a monopoly on all phone systems, came out with a battery at the central exchange that eliminated the need for at-home hand cranking. Around the same time, on this date in 1896, Strowger came out with the first rotary dial phone that was installed in the Milwaukee city hall. It didn’t have holes but instead had what amounted to the sprockets of a half exposed gear. More like a rotary disk. The photo to the above left is the 1897 version. Strowger went on to be a big competitor of the Bell System, until his patents expired in 1914. From that point, his company and Strowger disappeared from history. I suppose he took the money and ran…or rather died. Strowger passed away in 1902. No word on

whether his former competitor in Kansas City got his final bit of business. But, without a competitor, the Bell System didn’t come out with a rotary phone until 1919 and it had the holes with the disc that went all the way around the dial.

Two things. First off, competition inspires invention…Bell had no more competition after Strowger’s death and so dragged its feet on developing a better phone. Second thing…don’t ever make the undertaker mad. His revenge can kill you.

Friday Evening, secondary Push still lagging behind

Weather Bottom Line:  A strong cold front is on its way.  We may even get cooler than the last one with afternoon highs possibly only in the mid 70′s early next week…maybe even low 70′s for some.  The long wave trof is consistently showing up on the models but will be a bit slow to get here.  There is a boundary out to the west that will be sagging our way but really doesn’t get here until early Saturday or late Friday as it awaits for the big kick from the main trof digging down.  So, look for fairly humid conditions and seasonally hot temperatures for this afternoon and Friday.  Wouldn’t be surprised to see some scattered activity late Friday.  The front will slowly move through on Saturday so rain chances will be the highest on Friday night and Saturday with pops tapering off by late Saturday.  The real push of cooler air does not get here until Sunday.  I could forsee a number of clouds holding temperatures down on Sunday as a shortwave rotates around the base of the trof…kinda like last Saturday.  A light shower might show up here and there but it wouldn’t last.  Then it would be Monday that we really back down to the low to mid 70′s in spite of some sunshine.  Sunday may not get out of the 70′s either due to colder air filtering in and clouds.  The 850′s are showing up below 10 C.  Very odd for this time of year and the trof set up with the long wave pattern suggests that it may stick around for much of the week with a warm up not going on until the second half.  My sunflowers need water so I hope we can get some decent rain.  The SPC is not too enthused concerning severe weather as we just haven’t had time to destablize as per the latest data, but with afternoon heating, late t’storms Friday would not be surprising.

Your College Famous For Billionaires or Athletes? Carl Fisher was simply a Great Man. August 16, 2009

Harvard Rugby Team-Any Future Billionaires?

Top 10 in Billionaires and Many sports-A rarity

A New Way to Rate Colleges: If you visit a university and talk to their alumni, you will often hear them say “we are ranked number such-and-such” or “our widget school is ranked thus-and-so.” More often, they won’t be as specific and simply say that “our widget school is one of the highest ranked.” Almost every time, in my experience, when I have gone to the US News and World Report ranking, the claims are not matched. Several times I’ve been told some great thing and found that particular discipline at that school is ranked somewhere between 100 and 150. I suppose that if you have to tell me that your school is highly ranked in academics, it’s probably won’t live up to the billing.

Not in Top Ten in Football or Billionaires

There are different ways of ranking schools but at least part of the criteria is based on outcome. Many undergraduate programs will encourage their better students to go on to advanced degrees because the more of their students that can attain a Masters or PhD, the better that undergraduate school looks. Beyond academic achievement, another way to grade a school’s performance is the working world performance of its graduates. There is one famous school that one always hears is so great yet I am unaware of any high-profile business successes from that school, but they are famous for football.

Gates-Richest Harvard Dropout

Forbes magazine came out with an interesting way of ranking schools. How many billionaires are products of that academic institution? The Forbes list of billionaires hailing from particular universities is headed up by Harvard with 5% of the world’s billionaires. I’m not sure, but I don’t think that it includes rich guys who dropped out like Bill Gates. New York University made this list, but also sports 5 drop outs that have gone on to great riches. The University of Pennsylvania is on the list and boasts the famous Wharton School of Business and its most famous graduate, Donald Trump.

An interesting note is that the only state schools on the list are ones that are also known for football prowess, or really athletic achievement in general.   The state schools that  round out the top 10 are USC, UCLA and The University of Texas at Austin. These schools all were tied for 9th place with nine billionaires in their ranks. I’ve often wanted to ask a university president if his objective was to entertain the alumni or to produce students who gain a quality education. It’s kinda tough to do both.

On This Date In History: Not all success stories are college graduates or even college drop outs. On this date in 1909, entrepreneur Carl Graham Fisher was looking ahead to a big day. In just a 3 days, he was going to stage the first race at the Indianpolis Motor Speedway . Four days later he was scratching his head because the opening of his Indianapolis Motor Speedway with a three day, 300 mile race didn’t go very well. Drivers were blinded by the dust kicked up from the gravel roadway and 5 people were killed. Fisher abruptly stopped the race. But, he didn’t give up. He had the 2.5 mile oval set with brick and in 1911, the first Indy 500 was held.

Fisher didn’t give up on a lot of things. He was born half blind but didn’t know about it until he was 31. He started a small bicycle business and promoted it by riding a bike across a tightrope. He opened what is thought to be the first auto dealership in America and promoted that business in Indianapolis by floating across the city in a hot-air balloon. Part of the reason he opened the Indianapolis Motor Speedway was that he wanted to try to make Indianapolis the hub of the auto-industry instead of Detroit. He also went into business making auto headlights. He later sold that in 1912 to Union Carbide for $9 million. Perhaps buoyed by the success of making Indianapolis Motor Speedway the “Brickyard”, he conceived of the idea and helped develop the nations first coast to coast highway, the Lincoln Highway, named for his favorite hero. He went a step farther and pushed for the Dixie Highway from Indianapolis to Florida, which John Mellencamp made famous later.

In Florida, he became a real estate mogul and bought an overgrown island off of Miami. He had it cleared of mangroves, filled in the swamps and built a bridge to what is now known as Miami Beach. As part of a promotion, he once used an elephant with a baseball player on its head, which I have no idea how that promotes a real estate development. But, Fisher is considered a genius while that moniker has escaped me. He also began a “Miami of the North”, developing what would become Montauk on the eastern tip of Long Island. At one point he was worth $100 million in 1920′s dollars. But..easy come easy go.

Miami Beach Memorial Honoring Fisher

Before the hype of Global Warming, a number of hurricanes devastated Florida and just hammered the real estate market in Florida. That took a toll on Fisher’s fortune. Then the stock market crash of 1929 wiped him out. He ended up in a small cottage on Miami Beach, but he didn’t stop. He developed the Caribbean Club in Key Largo. He died in 1939 with an estate estimated at just $40,000. But, he is credited with helping to inspire President Eisenhower to develop the interstate highway system. He was inducted into the Automotive Hall of Fame and was named one of Florida’s 50 most influential people of the 20th Century.

From rags to riches to rags again….yet he left a legacy of benefit for the entire nation. Ever wonder what you can do if you try?

Monday Evening

Weather Bottom Line: Look for another day near 90…that’s even possible on Monday too. But, the rain chances will begin to increase by Monday afternoon and then stick around for much of the week. A lazy front will sag down our way and maybe not even get through the area, but will get close enough and then lurk around long enough to cause enough of a ruckus to help focus at least scattered storms for much of the week. I suspect that its initial approach on Tuesday will bring the greatest chances. Otherwise, it will be warm and humid for the week ahead