The U.S. economy languishes in a quagmire of uncertainty and fear. We all need a jolt from Napoleon Hill’s, Think and Grow Rich. We’ve lost our imagination. We depend on government. We think if we just hang on, things will get better; when they won’t, unless we collectively take action.

Actions begin with thoughts, with imagination, with dreams.   Ideas get buried in political gambit. Dreams get squashed by disconsolate pessimism. “I can’t do it” echoes along Main Street more often than, “Let’s just get it done!”

Americans have been here at other times. The Great Depression was the time for despair, and many Americans were desperate.

How much of this information sounds familiar?`
• October “ is the cruellest month . . .” for the stock market.  Time’s cruelty is  T.S. Eliot’s theme in The Waste Land. Time, greed, and fear coalesced on “Black Tuesday” (October 29, 1929).  Stocks lost 38 points as 16 million shares changed owners (the Dow Jones did not trade as many shares until 1968). The Dow Jones Industrial Average declined 89% from its peak and found a bottom at 41.32.
• In the 1920’s, industry and business announced exceptional profits.
• Wages were low and credit purchases were high.
• Real estate prices peaked in 1935 and lost value prior to and after the 1939 collapse.
• 40% of US banks failed.
• Unemployment climbed to 25% in 1933
• During his first year as President, Roosevelt charged the “unscrupulous money lenders” and ” self-seekers” for the economic collapse.
• The American family saw a drop in income from $2,300 to $1,500 annually; that is a 40% decline. A 2009 survey by FinaMetrica indicates that 64% of respondents expect a drop in life style.
• Government initiatives created road and building projects.
• The Dust Bowl of 1935-1938 forced 800,000 out of their homes and off the farm. Did Al Gore catch a cyclical event or an inexorable global catastrophe that might be mitigated?
• The Home Owners Refinancing Act passed through Congress in 1933 helping about one million families get mortgages.

Sounds familiar and worse.

Maybe imagination, hope, belief, expectation, and ideas helped Americans get through the effects of avarice.  Maybe changes are just simple economic cycles. Maybe,  World War II gave Americans focus, hope, and incidentally, economic growth.  Who knows for certain? I think energy and necessity (“the mother of invention) exceeds the impact of circumstance.  What we are matters more than where we are.

Napoleon Hill writes, “Never in the history of America has there been so great an opportunity,  for practical dreamers as now exists….The rules of the race have changed, because we now live in a changed world that definitely favors the masses, those who had little or no opportunity to win under the conditions existing during the depression, when fear paralyzed fear and development. ”

“We who are in this new race for riches, should be encouraged to know that this changed world in which we lives is demanding new ideas, new ways of doing things, new leaders, new inventions, new methods of teaching, new methods of marketing, new books, new literature, new features for the radio, new ideas for moving pictures.”

“Back of all this demand for new and better things, there is one quality which one must possess to win, and that is definiteness of purpose, the knowledge of what one wants, and a burning desire to possess it.”

Where are the inventors and innovators? They are doing what inventors and innovators do. They change our world; they lead us because they dream, they innovate, they invent, and they have ”burning desire”.

You may think that America has lost its “burning desire” for invention and innovation;  not so. The Kauffmann Foundation tracks the creative and inventive spirit of America.

Here are recent news stories from the Kauffman Foundatin newsletter:

 
• World Turns On Its Entrepreneurial Axis: During Global Entrepreneurship Week, November 16-22, millions of young people around the world joined a growing movement of entrepreneurial people to generate new ideas and to seek better ways of doing things. Eighty-eight countries across six continents came together during the second annual global celebration of entrepreneurship to inspire young people to embrace innovation, imagination, and creativity.
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• Company Founders Credit Experience, Management, and Luck for Entrepreneurial Success: While fostering new business creation could again help the United States move more swiftly toward ending the current recession, little has been known about the factors that cultivate and support entrepreneurialism. However, a new study from the Kauffman Foundation, “Making of a Successful Entrepreneur,” provides insight into company owners’ views about what influences the success or failure of a startup business.
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• Canadian Student Takes 2009 Global Student Entrepreneur Award: Simon Fraser University student Milun Tesovic, founder of MetroLyrics.com, has been named champion of the 2009 Global Student Entrepreneur Awards (GSEA) and the recipient of $150,000 in cash and donated services that will help support his company and development as an entrepreneur. The GSEA Global Finals, featuring students from eighteen countries, were held at the Kauffman Foundation during Global Entrepreneurship Week.
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• OECD Report on Entrepreneurship Reveals Economic Impact on Firm Formation: The Organisation for Economic Co-operation and Development (OECD) has unveiled the first indications of how the economic slump has affected entrepreneurship in the United States and eleven other countries in 2008 and most of 2009. The report, Timely Entrepreneurship Indicators, shows that firm formation declined and exits increased, which economists say could have significant implications for job creation.
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• College Freshman Show Increasing Interest in Entrepreneurship: The most ubiquitous survey of college freshmen in the United States reveals that interest in entrepreneurship among first-year college students has risen over time. Trends in Business Interest Among U.S. College Students bases its findings on data available through the Cooperative Institutional Research Program, which for forty years has conducted the CIRP Freshman Survey. Find out more arrow
• Partnership to Launch Book Series on Innovation and Entrepreneurship: The Kauffman Foundation, Princeton University Press, and the Berkley Center for Entrepreneurial Studies at New York University have announced a publishing partnership to launch the Kauffman Series on Innovation and Entrepreneurship.
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Do you believe history is repetitious?

Do you believe that what happened then can happen anytime?

Are you dreaming…inventing…innovating?

“Well we’re movin on up,
To the east side.
To a deluxe apartment in the sky.
Movin on up,
To the east side.
We finally got a piece of the pie.

Fish don’t fry in the kitchen;
Beans don’t burn on the grill.
Took a whole lotta tryin’,
Just to get up that hill.
Now we’re up in the big leagues,
Gettin’ our turn at bat.
As long as we live, it’s you and me baby,
There ain’t nothin wrong with that.

Well we’re movin on up,
To the east side.
To a deluxe apartment in the sky.
Movin on up,
To the east side.
We finally got a piece of the pie.”

Did you watch the Jefferson’s in their  “apartment in the sky”? Life was good, goofy, and gilded; they “finally got a piece of the pie.”

High net worth families have a net worth of one million dollars. How they got there is a prism reflecting unique ideas, good timing (luck), passion, determination, prudence, and focus.

Keeping their wealth takes momentum, persistence, risk-taking, and entrepreneurial instincts. Adding complex global economic trends, currency and commodity values gives wealthy folks economic vertigo.Wealthy living on the upper east-side or a Tuscan village differs.

A successful, high-net worth hairstylist said to me, “In Italy you live, but make no money. In America, you make money, but have no life. My best times in Italy are sitting at a cafe, drinking coffee, reading the morning paper, and watching ocean waves. When leaving, I say, ‘Thanks…I’ll be back.’”

Making it and maintaining it became difficult and frustrating for wealthy Americans during this recession, just like the rest of us.

Millionaires don’t feel as good about their income:
• Most, like the rest, consider their cash flow worse.
• 54% feel “worse off”
• 32% think this could be a better year (optimism matters)
• 42% think not much’s gonna change
• 26% are downright pessimistic: things won’t stay the same, they’ll get worse.
• 38% shifted funds or will shift funds to certificates of deposit

Read, “Hard knocks for the high net worth” by Investment News, August 17, 2009

General Motors is an accident waiting to happen unless someone steers them toward safe routes. Whether they avoid economic potholes driving gas, diesel, or electric, UAW members will determine the outcome with GM’s management team.

UAW member talent made GM the leading automobile maker in the world. GM has lost the position, and I’ve pointed my criticism toward UAW members as part of the problem. That may be partly but not completely true.

Frank Hammer, age 65, a staff and line worker at GM makes fascinating comments about the role of UAW workers. His distinctions, recommendations, and passion recommend listening to him.

If you listened to Don Imus interview with Lou Dobbs, you heard Dobbs say that our legislators should be teachers and workers rather than “elitists”. Frank Hammer might be a candidate.

Listen to Frank Hammer’s commonsense during an interview provided by Bloomberg.com.

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NOTE: This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information should not be relied upon by the reader as research or investment advice regarding the funds or any stock in particular, nor should it be construed as a recommendation to purchase or sell a security, including futures contracts. For more information, including a prospectus with charges and expenses, call the number of any brokerage firm, mutual fund company, investment advisor, or insurance company.. Please read the prospectus carefully before investing. . Mutual fund investing involves risk, including the possible loss of principal. In addition to the normal risks associated with equity investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. Narrowly focused investments typically exhibit higher volatility. Products of companies in which technology funds invest may be subject to severe competition and rapid obsolescence. Index performance returns do not reflect any management fees, transaction costs or expenses. One cannot invest directly in an index. Past performance does not guarantee future results. Ethos provides this news page for information purposes only and it should not be construed as legal, accounting, tax, or professional advice. Ethos Advisory Services disclaims any loss or liability which is incurred as a consequence, directly or indirectly, of the use or application of this news page or any page on ethosadvisory.com or echievements.com.

If the stock market expects balance and reason, what will Barack Obama offer investors? What we expect of him is what we should anticipate from corporate leadership.

Obviously, we don’t want executives to be driven by self-doubt or self-aggrandizement. In my opinion, we prefer to reward them for their innovation and creative solutions. Whatever the technology or product, we do not permit corporations or government to violate the earth’s resources. Nor do we expect corporate leadership to raid the bank for the few while starving the many.

Corporate leadership requires commitment to new products, new services, new ideas. Companies that lose their way, their mission or purpose, must renew themselves with new leadership. A Board of Directors possesses this power at the corporate level, as voters do nationally. Throwing the bum-out works in America at all levels (even marriages).

The stock market expects and rewards companies who understand their market, solve problems, and provide responsible leadership. This means they must balance corporate resolve with responsible solutions that do not damage families living in this age or any age. The farther we get from the powers of nature, the natural elements of growth and healing, the more dangerous our solutions become.

When we move away from our grandmother’s influence, the more we may be inclined toward self-aggrandizing behavior and turmoil. Barack Obama’s trip to visit his grandmother was more than a political ploy. His action, in my opinion, confirms his roots. Mother’s and grandmother’s shape their children for good or evil. Forgetting what they taught us creates a moral vacuum no company or country can endure.

It’s not likely we’ll ever eradicate destructive forces. Our jails, white collar and otherwise, are crammed with men and women who gave up core values for personal achievement. Our legislators, from Federal to local, often demean and ridicule their call to duty and service.

The vigilance of our press, the work of our centers of faith, exceptional teachers, and family cohesion will counter the powers of those who mislead and abuse. Of course, we can only hope and pray these community forces do not lose a grip on their moral imperatives.

Every citizen must demand responsible action from corporate leadership. Of course, we all have to decide on some reasonable basis or principle for what we require. Whether Kant’s “categorical imperative” or Jesus’, “Do unto others as you would have others do to you”, we all are guided by essential core values.

Determining whether I am right or you are wrong is not something America needs to debate. America still remains at the “center” of moral values. Those to the far right and the far left should be pushed to the margins. When the center shifts, the debate shifts.

Every generation will have to determine what works for them, and subsequently accept responsibility for choices made and expressed. Corporations that survive understand you cannot market to the few; you must market to the many.

So what does this mean for the President-elect? He faces what may become the most seismic shifts in American history. One observation is certain. He seems to understand the burden. His demeanor has changed, the weight of governing is on his shoulders, and the swagger of a campaign is now the gate toward hard work. His success is ours. Our stock in him and bond to him comes from our balanced optimism and reasonable expectations.

Look at the countenance of the President-elect; perhaps he understands the perplexing serious issues of his and our future. Whether you voted for Barack Obama or not, take a moment to read and contemplate this young leader’s acceptance speech. Investors hope that president-elect Obama and his economic team will bring change to stocks and bonds too.

Tags: Barack, Obama,, America's, corporate, future,, Government, leadership

In simple terms greed and fear drive markets. These broad generalizations provide easy categories for market events. Makes us quite dextrous when finger-pointing too. We can accuse while we recuse.

Maybe stock market crashes are not so simple-minded. Perhaps more complexity is involved especially when politicians stage their agenda.

Yesterday, I began wondering what reasons any legislator (Federal or State) might overlook sub prime transactions. Truck drivers heading down hinterland highways, llama farmers in Wisconsin, and the homeless sleeping on park benches on the New Haven Green knew about sub-prime mortgages.

Seems reasonable to think that the dinner conversation at the 701 Restaurant on Pennsylvannia Avenue where (according to the Washington Times), the menu delights include “an amuse bouche… finished with chocolate pave or rhubarb-and-strawberry compote surrounding a small almond cake” (just what we regular folk eat every day).

Between the delicate morsels (at tax payer expense), what did these folks discuss? Somebody must have noticed the economic fiasco on the horizon. Or, was there another agenda?

Is it likely that overlooking subprime transactions was part of a social agenda? Was there hope that permitting a disenfranchised class to own the “American dream” (even though unqualified) could change the social-cultural, and political structure of America? If they were having that conversation at McDonald’s or sitting on the Capital lawn with lunch bags, I might think so.

Housing does franchise the American dream; a family living in Lawrence, MA wants that dream as much as the family living in Manchester, MA. One family wins the social and economic lottery while the other suffers the fate of limited means.

If there were more Habitat For Humanity homes, and if more volunteers from places like Manchester, MA headed to Lawrence, MA, the desires of many would be met. The fulfillment of a dream would be kept. Of course, there’s one major rub. You don’t make big bucks building Habitat homes. The bank doesn’t earn a cent from the mortgage, and the homeowner just pays back the principle with a “sweat-equity” commitment. Not much of an economic incentive there; so greed prevails as the antagonist of hope.

For a more complex opinion, read “The Greed Fallacy” by Arthur MacEwan (Dollars & Sense, the magazine of economic justice).

Tags: Habitat, For, Humanity, , , housing, , , greed, , , hope