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I.O.U.S.A. the Movie

Wake up, America! We’re on the brink of a financial meltdown.

Got your attention yet?

That’s the outlook for supporters of the soon-to-be released documentary entitled: I.O.U.S.A.: One Nation. Under Stress. In Debt., which centers on the shape and impact of the United States national debt.

IOUSA the MovieAs described on their website, this documentary boldly examines the rapidly growing national debt and its consequences for the United States and its citizens. The film’s premise is that burdened with an ever-expanding government and military, increased international competition, overextended entitlement programs, and debts to foreign countries that are becoming impossible to honor, America must mend its spendthrift ways or face an economic disaster of epic proportions.

With surgical precision, the film’s director interweaves archival footage and economic data to paint a vivid and alarming profile of America’s current economic situation. The ultimate power of I.O.U.S.A. is that the film moves beyond doomsday rhetoric to proffer potential financial scenarios and propose solutions about how we can recreate a fiscally sound nation for future generations.

According to an excerpt from it’s Wiki site:

The film focuses on Robert Bixby, director of the Concord Coalition, and David Walker, the U.S. Comptroller-General, as they travel around the United States on a tour to let communities know of the potential dangers of the national debt. This is a tour carried out through the Concord Coalition, and is known as the “Fiscal Wake-Up Tour.” In February 2008, Walker announced that he would be resigning from his post as Comptroller General to become the president and CEO of the newly established Peter G. Peterson Foundation. His term was supposed to end in 2013. He states that he feels he can more freely draw attention to the serious issues the U.S. is facing from this position.

I.O.U.S.A.: Live with Warren Buffett, Pete Peterson & Dave Walker in an exclusive one night event in select movie theaters nationwide (including Tucson and Phoenix) on Thursday, August 21st. This event will include a LIVE discussion about America’s economic crisis and what we can do to change course, and will be shown at 8:00pm ET / 7:00pm CT / 6:00pm MT / and tape delayed at 7:30pm PT.

After the showing, the live discussion with America’s most notable financial leaders and policy experts, including Warren Buffett, CEO of Berkshire Hathaway; William Niskanen, chairman of the Cato Institute; Bill Novelli, CEO of AARP; Pete Peterson, senior chairman of The Blackstone Group and chairman of the Peter G. Peterson Foundation; and Dave Walker, president & CEO of the Peter G. Peterson Foundation and former U.S. Comptroller General, promises riveting dialogue and keen insight into the crisis we currently face. The panel will be moderated by Becky Quick, co-anchor of CNBC’s morning news show Squawk Box.

This should be an interesting movie, and hopefully will make more people aware of just how large and out-of-hand our national debt has gotten. According to the movie’s “Take Action” email form:

Did you know that the federal government is in a $53 trillion financial hole? A hole that’s growing by $2 trillion to $3 trillion every year? That amounts to a burden of $175,000 on each and every American citizen.
[Source: Peter G. Peterson Foundation]

However, according to the national debt timeclock, current obligations are more like $32,000 per person. Not as frightening as $175,000, but still a significant amount.

If you happen to be one of the first to watch this movie, please stop by afterwards and let us know what you thought about it. Here’s a sneak peek.

http://www.youtube.com/watch?v=HBo2xQIWHiM

Posted 17 August 2008 † Mike § Bond Market § Financial § Miscellaneous ‡ Comments (2) ° Tagged: , , ,

Pharmacist Job Description

I was just visiting over at Minyanville and read -

“Snap judgments about a law-abiding pusherman: The Pharmacist“.

I took great pleasure in their description of my investment strategy:

Blind faith in Big Pharma whose ability to conjure syndromes out of thin air and repurpose existing drugs to treat them has been shown to generate healthy profits.

Looks like I have to agree with the Minyanville staff. For example: IED?

Who conjured up that syndrome? I think it used to be called “losing your temper”. Now it’s a medical condition purportedly treatable with various pharmaceutical ”mood stabilizers”.

Of course, we pharmacists are always prepared for the worst. Also according to Minyanville:

Prepared the following defense in unlikely case of sexual harassment suit: Restless Hand Syndrome.

Being prepared makes it much easier to deal with the occasional death threats from the elderly. ;-)

Posted 16 August 2008 † Mike § Miscellaneous ‡ Comments (0) ° Tagged:

Emergency Fundathon

Be PreparedAs most smart savers know, creating and maintaining an emergency fund should be a priority before branching into investment and speculation.

Even though I live in Arizona where the sun shines 350 days a year, into everyone’s life a little rain must fall. It happens to all of us at some point in our lives. An emergency fund (rainy day fund) will help protect you from those times when things don’t always go according to plan. It would be a shame to have to tap that 401k, take out a loan, or sell some of your investments at a loss because you needed access to some quick cash.

So, to highlight the importance of having that buffer to protect yourself, I thought I would create a post of links to others who’ve written about emergency funds. Through these links you should be able to find out anything you wanted to know (and more) about emergency funds.

  1. How and Why to Start an Emergency Fund
  2. How Putting Together an Emergency Fund Works
  3. 5 steps to building an emergency fund
  4. Building an emergency fund
  5. An Emergency Fund Is More Than Just Money
  6. Figuring the size of your emergency fund
  7. 21 Strategies for Creating an Emergency Fund
  8. The $0 emergency fund
  9. Laddering Your Emergency Fund
  10. Emergency Savings Calculator

Just a few tips from someone whose had to tap his emergency fund a couple of times in the past.

  • A 3-month emergency fund is not enough of a buffer. A 6-12 month emergency fund will serve you much better and give you more peace of mind if the unexpected becomes expected.
  • Cash is king. You don’t want to incur more debt when you’re unsure of your future or don’t have the income to pay it back.
  • Getting the best return without loss on your emergency fund savings is important, but easy access to your funds is equally important.

If I’ve missed anything please share in the comment section.

Posted 15 August 2008 † Mike § Personal Finance ‡ Comments (0) ° Tagged: ,

CVS Buys Longs

CVS Pharmacy Buys Longs DrugsGoodbye Long's Drug Stores

Around a couple of years ago, I wrote about the CVS/Caremark merger and about consolidation in the retail pharmacy sector. If I remember correctly, I also said that sooner or later Long’s Drug Stores would soon be swallowed up by Walgreens or CVS. Well, that day has come. According to an excerpt from a CVS press release today:

CVS Caremark Corporation (NYSE: CVS) and Longs Drug Stores Corporation (NYSE: LDG) today announced that they have entered into a definitive agreement under which CVS Caremark will acquire Longs for $71.50 per share in cash for a total purchase price of $2.9 billion including the assumption of net debt. Through this acquisition, CVS Caremark will acquire Longs’ 521 retail drugstores in California, Hawaii, Nevada and Arizona as well as its Rx America subsidiary, which offers prescription benefits management (”PBM”) services to over 8 million members and prescription drug plan benefits to approximately 450,000 Medicare beneficiaries.

To tell you the truth, I think I also said that LDG’s profits would suffer as the “big three” Rx Retailers gained ground. That didn’t happen. Long’s Drug Stores has done pretty well the last two years and their stock price has held up. This is great news for LDG shareholders who will now command a premium from CVS for agreeing to the merger.

I believe that’s it for all of the smaller publicly-held Rx retail chains. One by one they’re all gone. The only ones left are privately held. Could the next buyout be Kerr Drug, a smaller private regional chain located in the Carolinas? We’ll see.

Posted 13 August 2008 † Mike § Investment § Sectors § Stock Market ‡ Comments (2) ° Tagged: , ,

Money’s Too Tight To Mention

http://www.youtube.com/watch?v=bREgcLhTHI0

Seemed appropriate at this economic juncture.

Posted 09 August 2008 † Mike § Economic § Financial § Investment ‡ Comments (0) ° Tagged:

Junk Bonds as Market Indicator

I’ve been in a 100% cash position with my retirement portfolio for a while now and I’ve been asked a “couple” of times (I don’t get a lot of readership), how will I know when it’s time to “get back in”?

Retirement Portfolio Of course, I don’t have the precise answer people are looking for, or even seem to expect. It’s market-timing plain and simple and I’m just using my own intuitive judgment based on what I see, hear and read concerning the economy. I haven’t found a good reason to change my mind. To me, as a whole, everything seems to point to a weakening economy, not one on the rebound.

But, one gauge that I use to evaluate whether the stock market is “really” reversing it’s trend is the junk bond market, specifically, the Vanguard Group’s High-Yield Corporate Fund, Investor Shares (VWEHX) because it contains “higher-grade” junk.

My reasoning is that junk bonds prices are directly correlated with stock market prices. If both stock and junk bond market prices continue to rise, then it could be indicative of a turn-around. If stock market prices leap, but VWEHX falls or remains the same, I view it as short-term speculative movement, not a reversal of course.

For example, the stock market really bounced back at the beginning of the week, and like most investors betting on a bear market, it caused me a little concern. But, my anxieties were allayed once I saw that VWEHX didn’t move at all. As a matter of fact, VWEHX is at historic lows, and the outlook for junk looks pretty grim. According to a Bloomberg.com article today:

Aug. 7 (Bloomberg) — The global default rate for speculative-grade company bonds may rise to as much as 10 percent over the next year as the economy slows, according to Moody’s Investors Service.

Defaults may reach 6.3 percent in 12 months, the highest in more than five years, and could be higher should the housing slump lead to a “protracted U.S. recession,” the New York- based rating company said in a report today. The failure rate increased to 2.5 percent in July from 1.5 percent a year ago.

That speaks more to me than any short-term stock market gains.

Posted 07 August 2008 † Mike § Bond Market § Commentary § Market Timing ‡ Comments (5) ° Tagged: ,