December 1, 2008

$700 Billion Rounding Error?

The Economy & News Angles

$700 billion rounding error?

You’d have to be a desert island not to hear about the current financial bailouts. No matter whether you’re for or against em, the numbers are astounding. Word on the street is that the original $700 billion number was not derived from what was needed, but instead by a calculation on what wouldn’t upset the apple cart. In other words, what could be absorbed, sort of like a rounding error? Ummm…$700 billion, that’s it! Sure, who could blame us for spending 5-7% of our GNP? Well we’re not alone, most other big nations have recently followed suit. China $586 billion (16% of their GNP), Japan $68 billion (1%), S. Korea $80 billion (9%), Russia $209 billion (12%), Britain $450 billion (21%), Germany $151 billion (7%), Spain $111 billion (8%) and Switzerland $66 billion (15%). And this just in… the U.S. is up to $850 billion, plus another $300 billion more for mortgage guarantees (about 6% of our GDP). I just hope it’s going to be enough. [Numbers from Businessweek, December 1, 2008]

When should we start paying President Obama?

Watching CNN or Fox News, you can’t help but see that President-elect Barack Obama is already working ‘round the clock, and he’s not even been sworn in yet. Makes you hope he’s getting some kind of salary for being President-elect. Wouldn’t it be weird if he’s doing all this without pay for the next two months? What kind of welcome would that be? I am sure we are paying for secret service and T&E for all those big meetings, so why not pay the Prez salary upon election, and not simply stand on ceremony?

My Obsessions

Gas-price WATCH

Since gas prices represent the clearest icon of our ‘emotional economy’ we need a reminder how large the swings have been. Since 2007, the price of crude oil per barrel rose from the $50’s and $60’s up to $145 on this July 4, 2008. This month, on November 21, it was $49.93 and on November 29 it was $54.43. Wheeee!

While the lowest I’ve seen recently is $1.83, I decided to check out I found there I could buy gas in Tucson for $1.73! Remember, it was $4.00 in July 2008 (regular gas in today’s dollars)? Don’t forget it was up to $3.32 in March 1981, during the Iraq-Iran war. [Prices per]

Advice to Entrepreneurs

Accordion to me…This week’s advice to entrepreneurs

What do angel investors look for? Ideally: A really big market with a big problem, your big solution, your big capabilities, and all it needs is money. Problem is it’s really hard to prove, and contrary to what you may think, even wealthy people don’t want to lose money. Here are two tips on finding your first investors. First, look to people who will give you the benefit-of-the-doubt. These are people who already like you, your friends and family, and already know how great you are, and very much want to help you succeed. Second, while I’m active with several angel groups, including Desert Angels and Northern Arizona Angels, I urge you to spend just as much time looking for specific investors who are likely to find instant ‘relevancy’ with what you’re doing. Like, if you’re working on cure for Alzheimer’s, try talking to local neurologists. No doubt, they’ll be a tough audience, but if you’re on the right track, they’ll know it. Better to find out now. Got an idea or something you need help on? Email me at

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