Sushi Money

The market has made amazing gains over the past two days, and posts the biggest 2-day gain in five years. Pretty amazing numbers. We’ve been here before, but are we staying for awhile or not? And how many people took money off the table over the past few weeks? No surprise there- with all the financial turmoil many of us have become a little more conservative these last few months. But as I was looking over the market yesterday morning it just looked ripe with opportunity, hence yesterday’s post. Now the financial pundits will really be out in force debating the merit of this weeks market gains.

Through last week the Dow was down almost 10% from it’s high a few months earlier. The Wall Street Journal declared a correction a few days ago, looking ahead at the possibility of another 10% down indicating a bear market had returned. But after the last two days, are we out of the woods, and is the Bear still in there hiding? Sure looks like it, but that financial Bear is a wily creature. A lot of smarter folks than I expect all the negative news to have significantly more impact to the markets than we have seen lately. And a possible recession, meaning that many folks think we’re just not there yet. We don’t have that “feel-good” factor going! With the subprime and mortgage mess reaching a peak in mid-2008, there’s still lots of negative news to go around.

But you know what? I think there’s a whole lot of fund managers and investment firms competing to show some healthy gains for investors. With the hedge fund derivative losses this year I suspect a lot of smart folks are re-examining just what risk means. Maybe some of the good quality stocks are pretty decent investments after all. Maybe we don’t have to go looking for the “next best thing” or crazy combinations of risk in order to show decent returns for investors. Maybe dividends and solid year-over-year growth is not a bad place to be over time. Maybe a lot of folks will return to the fundamentals on stocks.

Then again maybe fear will continue to run amok and the markets will crash. Who the heck really knows where the market’s going? Certainly not me, but I did put a chunk of money in some key areas yesterday that look even better today. Looking ahead I see the Fed cutting rates a quarter point, the holidays making us all feel pretty good, and the election cycle really kicking in for 2008. Maybe we’ll even make more progress overseas, and start bringing some troops home. Some folks see market forecasts intertwined with the election cycle… and a Democrat in the White House next time. I don’t know what that means, except perhaps higher taxes on everything.

Something I do know…. markets go up and down, and change is the only certainty. It’s just the name of the game… a game in which I try to keep madness and the risk of emotions out of the way. Ten years from now my only memory of this day will be this post, if it still exists. Looking back ten years ago, I have no idea what I was doing…. Oh wait! Yes I do remember… I was having too much fun and not saving or investing nearly enough! Sometimes I wasn’t having any fun, and still not saving or investing enough. Now I know better… just keep plunking money in the pot, and try not to get too excited whether the market’s up or down. But up certainly is better than down isn’t it?!

     So what do you think of the market action lately?  Lots of seesaw but I don’t think we’re finished with the all the negatives seen lately in financials.   Enjoyed watching Jonathan Hoenig this morning… the Capitalist Pig who offers insight on the daily market action.  He’s generally pretty negative about current market opportunities, but has a really interesting perspective.  Today he mentioned the Wall Street Journal’s article on pension funds.   Seems some of the largest pension funds in the U.S. are divesting a good percentage of U.S. held stocks and shifting overseas, some cutting domestic stock percentages from 50% to 24% while moving into the international markets.   But as Jonathan pointed out, pension funds decisions are akin to investing by committee.  Just maybe this is an indication of where not to put your money right now.

     Either way, how much international exposure do you like in your portfolio?  I’ve held a consistent 15% to 20% over the last few years, certainly wishing I had a larger stake in retrospect.  Inflows to international stocks and mutual funds over the past year have been increasing at a record pace.  So what to do now?  I’m not going to chase the internation markets at this point- I still like 15% to 20%.  I may miss out on some good opportunities over the next couple of years, but I like the U.S. markets.  Here at home however, the news is pretty darn negative on the U.S. economy with the challenges we face with the credit crisis, housing and financial market prospects, consumer sentiment, the dollar, yada, yada, yada.   The financial news continues to show that many economists and investors are expecting the Fed to cut rates in a few weeks:

“The gloomier mood increases the likelihood that holiday sales, which account for a fifth of retailers’ yearly revenue, will be disappointing. Federal Reserve policy makers and private economists have cut growth forecasts as the housing slump enters its third year and jeopardizes consumer spending.”
“This is a strong indication that consumers are going to pull back sharply and growth is going to be very weak,” said Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts. “The message to the Fed should be that they need to keep cutting rates.”

    Sounds pretty ugly doesn’t it?  Even still, online shopping continues booming to new year-over-year records.  I guess the brick-and-mortar stores will have a harder time.   But personally, if the stock market presents another 5-10% pullback over the next few months I think that’s a great opportunity to really go long.  I’m sticking with it, and continuing to invest over time.  Maybe I’m crazy… heck, maybe it’s almost the contrarian position to look at stocks in the U.S. markets right now?    I just think ugly markets present many opportunities for a patient investor.  Even if the economy struggles along for the next year, the credit crisis will wane after we get tired of hearing about foreclosures and ARM resets.  Fund managers and financial company managers are going to find ways to increase profits and improve margins.  Gold will probably continue higher, and commodities are still doing well in this climate.  But a year or two from now, the sentiment is going to be vastly different.  I’ll even say that at some point in the next 5-7 years the U.S. dollar will come back very strong to the chagrin of many around the world.   Could be wrong, but I’m not betting against ‘ole Uncle Sam for the long term.    Over the short term?  Think I’ll stick with Mizzou this Saturday against the Sooners!

     I was asked recently how someone could really gain financial knowledge… to learn about financial issues, saving, investing and managing finances successfully to achieve a secure retirement.   It’s a question that a lot of us have asked at one time or another in our lives.  Heck, it’s a question we keep asking isn’t it?   Do we ever really know enough?  It seems like the more I do learn, the greater awareness I have for how much I don’t know.  If that makes any sense…

     Sure, some people have an interest or passion for financial issues, and keep after it throughout their lives.  Others just fall into it as a career option, or expansion of business and management.  A good education goes a long way no matter what you do   The statistics specifically show that with increasing education comes increasing wealth.  Knowledge about financial issues often grows with the responsibility for managing that increasing wealth for many people.  Yet for countless millions, financial literacy remains a challenging concept… something that is not “applied” in their lives, and may never really be well understood.    How many bad decisions are made in terms of loans, credit, debt, scams and frauds are tied into lack of awareness and knowledge of financial matters?   

    I am always amazed that we still have enormous numbers of people living in poverty in the U.S.  Take a look at this chart from the U.S. Census Bureau:

     These are statistical numbers based on Census Bureau calculations of Poverty Thresholds.  They are used to calculate a poverty rate and comparisons of the number of people in poverty in the U.S.  The Poverty Thresholds are based on income per family size, and if the income is below the poverty level, then the entire family is considered to be living in poverty.  The official Census Bureau poverty definition is updated for inflation using the CPI, and only uses pre-tax income, not including sources such as capital gains, subsidized housing, food stamps, medicaid, etc. 

    The Poverty Thresholds are different than the U.S. Poverty Guidelines calculated by the U.S. Department of Health and Human Services.  But the Poverty Guidelines are very important, because they are the numbers used to determine qualification for a host of federal programs such as school breakfast and lunch programs, WIC, food stamps, Job Corps, subsidized Medicare, State Children’s Health Insurance programs, Head Start, etc. 

    Regardless of the approach to defining poverty, the results are fairly close:  For a family of four today, they are living in poverty if their annual income is around $20,600 or below.   What if there’s one spouse working at a minimum wage job, the other spouse not working, and two school-age kids?  That’s a pretty difficult economic situation for a family, and they would be challenged to earn more than the poverty level.   What about those living alone?  A one-person household is living in poverty if their income is around $10,000 per year.

     Many of the government programs tied to the poverty guidelines are used primarily by families with children, which brings up an interesting point.  Children under 18 years old have the highest rate of poverty in the U.S.  Some people find that surprising, but it’s not when you think of the number of poor children in some families.  It’s not against the law to be uneducated, to be poor and to continue to have many children, but that is a reality in many parts of the nation… and world of course.  Unfortunately, lack of education goes hand-in-hand with reduced economic well-being, just as we cited the opposite as being a reality:  Greater education results in greater long-term wealth, and fosters improved economic well-being.

Here’s a chart showing historical poverty by age group:

     So it brings up the question of where the poor are getting help in terms of financial knowledge and education?   If someone has very little money and is struggling from paycheck-to-paycheck, how much time do they really have to learn and plan for long-term financial needs?   Probably not much.  Financial planning is simply not going to be the focus for so many struggling families- they are simply trying to make do from month-to-month and survive, especially with children.  And the financial services industry doesn’t really help- everything from brokers, fund managers, financial planners, accountants, financial counselors… what type of clients do they really serve?    Mostly it’s clients with money.   No matter how altruistic their motivations, these professionals are in business to make money.   Sure, there are exceptions such as the many counselors and social workers who do serve lower socio-economic markets and clients, but it’s a challenge, especially with liability insurance and other professional costs of being in business.  

    That’s why I believe so strongly in education and financial literacy.  All the government programs in the world are simply “stop-gap” measures aimed at helping people get by.   People must receive practical, applied training and education in order to pull themselves out of poverty!  The old axiom about teaching someone to fish rather than simply giving them a fish is very true.   The government should give them a few fish along the way, but it is possible to get an education and improve economic well-being.  It is possible to learn how to manage financial matters.  We can help people do that… and make a huge difference in the lives of those in need, especially children.  And we need to start at younger ages… teach children about saving and using money all throughout public school, especially the hazards and use of credit cards and debt.

     And just maybe we are finally looking at these issues as a nation.  Did you know there was a U.S. Financial Literacy and Education Commission?  In 2002 the U.S. Treasury Department established the Office of Financial Education, and soon after created the financial literacy focus.  In 2006, the website MyMoney.gov went live as a place chartered to “provide financial education and resources to all Americans.”  It’s a decent site filled with helpful information and references for many different financial topics.  One of the key strengths of the site is how they’ve integrated government resources such as Social Security information into the topical areas. 

     By the way, what was my answer to the question about how to gain financial knowledge?  Just good ‘ole fashioned effort and discipline primarily.  Take a few classes at a community college or university on budgeting or investings.  Stay away from “get rich quick” ideas and investing seminars.  Read and learn as much as possible… use the internet and the local library for all the fantastic financial books out there.  Stay with it, and keep learning over time.  Meet with an objective fee-only financial planner and talk about the future.  The bottom line and best advice I’ve ever heard?  The simple answer of starting to save and invest as early as possible… Time is on your side if you start young.  It’s hard to make up the older you get.

     I wish there was a better prescription for learning financial  ”stuff” but it just takes time and effort.  How do you do it?  Is it because you enjoy handling financial matters?  What do you think our country can do to improve financial literacy and education in the U.S.? 

    I see financial literacy as an increasing imperative for many nations around the world.  I just don’t think we can leave the details of our financial future up to someone else.  If you’re fortunate to have the resources to let a professional manage your financial well-being, that’s great… but seems to me it’s still important to stay in touch and continue learning along the way, not to mention a responsibility for educating others.   How many billions of dollars are spent providing aid to those who may have been able to do better for themselves, if someone had helped educate them earlier?

     There are many other people that need our help of course, and especially family members who are counting on our knowledge, or at least guidance.  I never even heard of a mutual fund until my father introduced them to me years ago.  If I had followed his advice at the time I would be a lot further ahead right now financially.  But he does receive the credit for pointing me in the right direction.   And I’ve learned something else along the way…. it’s never too late to start!

     I hope today finds everyone with good food, family or friends.  Or perhaps a day to enjoy some time to yourself.  Sometimes I treasure the days when I can find just a little time to reflect, and think about things.  It’s like catching your breath, and catching up with yourself.  But personal reflection can also bring out feelings where we think about the challenges we face.   This week it might involve questions like “What the heck is the market doing!?”  For which, of course, there are a million opinions, and few real answers. 

    What a strange time this is… the Dow is just about at its lowest point since April 2007, and tomorrow U.S. consumers will flock to the stores and malls for the biggest shopping day, and weekend, of the year.  I always try to avoid shopping on this weekend… too many people!    But the holiday season has begun in earnest, and it is a hopeful time of the year.  And an expensive time of the year.   I’m trying not to give in to the many temptations of the season… spending too much money over the holidays, eating too much food over the holidays, and worrying about- or even selling- stocks and funds over the holidays.

    Since the market has retraced almost 10% from its high of the year, we find some folks looking for the bear to rear its head.  Others think we’re just improving the fundamentals of the market, and presenting opportunities over the next year and beyond.  I don’t know where we’re going, but I’m going to keep plugging away… saving, investing, rebalancing, and looking out 10-15 years.   For that money I need in the next 3-5 years?  Well, that keeps going in a good safe money market account.  A little money in the emergency fund is also worth far more in terms of the security it brings.  

    Speaking of emergency funds and challenges, we can really help others at this time of year by giving food to a local pantry or church, or donating money for those in need.  It never ceases to amaze me that even with such economic prosperity, there are far too many who are struggling each day.   I think giving promotes opportunity, and opportunity promotes economic well-being.  Quite simply, that helping others helps ourselves and the nation as a whole.

     So I’m thankful for the opportunities we have, and thankful for being able to handle the challenges we face.  There will no doubt continue to be challenges ahead both personally, and for the nation as a whole.  I think challenges also promote opportunity in different ways- the opportunity to learn, to grow, and to leverage what is for what might be.  I’m an optimist at heart, and I think we’ll handle things just fine economically, and otherwise. 

    With that, it’s time for a little eggnog.  And we even saw a little bit of snow on the grass this morning!  Our 7 year old didn’t know what it was… I went out and scooped up a handful and his eyes lit up with excitement… “Snow!”   It’s great to see how simple things can bring such joy.  Happy Thanksgiving!

    What a busy month!  Between finals, case studies and typical family business I’ve been treading water this week.  I’ll stay busy for another couple of weeks, and then have more time to write.  We’re coming down the the end-of-year flurry of activity, especially for tax planning.  Now’s the time to make those financial decisions that can help the most for tax purposes- visit Kiplinger.com for a review of 10 Smart Year-end Money Moves.  And don’t forget to maximize deductions between now and the end of the year.  If you itemize deductions on your return and pay interest on a mortgage loan, consider paying the January mortgage payment in December before the end of the year.  Yes, it balances out over time, but I like to count as much for deductions in the current year as possible.    It might not be a bad idea for a quick review or phone call with your CPA or tax advisor either.  

     The Holidays begin this week here in the U.S., and if you’re driving it’s going to be more expensive this year with fuel prices.  This article is interesting however, and talks about how $3 gas really isn’t having the effect that many people thought it might.   That may be true, but it’s sure affecting choices for how often, and far, many people drive these days.  I’m just hoping fuel costs won’t be as high next summer when we take a vacation driving across the country!  Probably shouldn’t get my hopes up…

     When did raising children ever become an issue about money?  Sure, many of us held off having kids at certain times because we wanted to do some things first, or wait until we were settled in our careers.  And for some of us, it just “happened” and we marched steadily forward in our lives with kids in tow. 

     Now it seems we find information everywhere about people questioning the “value” that children represent to a family, or how much kids “cost” over time.  Business Week drummed up the attention grabbing headline ”Is Raising Kids a Fool’s Game?“   It’s an informative article that weighs the economic realities of having kids.  But it also bothers me though…  what kind of question is that?  Is raising kid’s a fool’s game?  Not on your life!   Kids might make you feel like a fool, but I hope I don’t become so economically cold that I start analyzing the financial relationships between my son’s growing up and our household budget.   

     Maybe we all do that in some ways, it’s only natural… “No son, you can have single scoop of ice cream… not a double today, and no we’re not putting money in that stuffed-animal claw machine and you don’t need bubble gum again!”  But I could never question what it actually costs to raise kids as some comparison to the perceived or emotional ”value” that having children represents. 

     Some people do raise those questions however.  Phillip Longman, author of The Empty Cradle: How Falling Birthrates Threaten World Prosperity and What to Do About It, looks critically at the economic costs of raising kids.  I haven’t read the book, but quotes like these give what appears as a too realistic, or perhaps mechanical view of human life:

“Child rearing is fast becoming a sucker’s game. Though the psychic rewards remain, the economic returns to individual parents have largely disappeared, while the cost of parenthood is soaring.”

       It’s not something I think we can, or should, make comparisons about.  Kids are amazing.  They’re a reflection of who we are, of generations of people just like us.  Kids are the future…. they’re our future.  When we are old and gray, the “kids” will be running the store.  They may even be helping us with a few things, and hopefully doing a pretty good job.  But I think having kids is more than that… it brings something out that we would not see or realize about ourselves otherwise.

Children are the living messages we send to a time we will not see.  John W. Whitehead

     In some ways, I don’t think one can fully understand what it is to be human without being a parent and raising children.  And not even biological children-  I think one can adopt children and feel the same incredible joys and sorrows of being a parent, and being humbled by ourselves.  In many ways that’s really what we find… an experience in which we begin to learn more of who we are, how we grew up and what has shaped our lives along the way.  We find out so much more about ourselves when we give to someone else as a parent and help them grow in their own life.  It’s hard to describe… but is a wonderful and revealing journey.  I believe we are even helping to shape the world that will be simply by imparting our values and experiences to our children. 

     Yes, children and higher birth rates do contribute to the economic realities the world faces… but we are not robots or machines simply breeding and mechanically contributing to the species year after year.  What kind of view of life is that?  And is having kids expensive?  Oh my goodness, yes- there’s no question about that.  I don’t know how families with 4-5 children get by honestly.  Or what about the Duggar family in Arkansas… an amazing family with 17 children!   Wow.  How do they do it?  I couldn’t even imagine.

      Children are like non-stop consuming and mess-making machines.  While they’re young, it doesn’t really end… just keeps going as they keep growing, and the minute you think you’ve got it figured out- they get sick, or throw some other curveball at you.  It’s a full-time, grown up job.  Something that takes discipline, maturity and yes- money.  Lots of money over time.  Today the cost of raising one child can be more than a quarter of a million dollars. 

Take a look at the real estimates of what it costs to raise children- this is from the U.S. Department of Agriculture’s Annual Expenditures on Children by Families for 2006.  It’s a detailed annual publication with lots of infomation- (here’s a link to the annual report if desired, but it’s a large PDF file).

   The journey of being a parent is so full of surprises.  This morning my 7-year old son woke up, saw me in the hallway, and ran up to give me a great big hug.  He said, “This is the best week I’ve had since I was a baby!”   ”It is?”  I asked, surprised, but not understanding.  “What’s so great about it?” I asked.  He said, “I don’t know… it just is, and I love you.”  

   That was worth any amount of money I could ever have… and I’ll probably remember it the rest of my life.  We get back far more than we ever put in to raising children.  Today our son dragged his mom around picking up canned goods for charity for the Cub Scout’s annual food drive.  All together our little group of kids gathered over 2500 food items for a pantry at a local church.  They said it would support local families for 3-4 months during a challenging season.  He really enjoyed helping other people, and learned a lot from participating.    After that all the kids gathered at the cub scout meeting for the space derby race, where we “raced” the rockets and spaceships that we spent the last few weeks making.   

     Everybody’s busy though… tons of other stuff needs done, the house is a mess, there are leaves to rake, and more.  But it was his time this morning.  The joy we see in a child’s eyes holds the reflections of all that is simple and beautiful about life.  We see ourselves in those reflections.  We see joy and beauty in places we never even dreamed about.  A fool’s game?  Nope.  Not even close.

     Looks like the WSJ Online is going to be free… that is wonderful. I love the site and the depth of analysis and commentary it provides.  News Corp. Chairman Rupert Murdoch understands that they are going to increase readership exponentially over time.

“We are studying that and we expect to make that free, and instead of having 1 million (subscribers), having at least 10-15 million in every corner of the earth.”  Rupert Murdoch

Everything in our lives is based on perception. The reality that you and I see each day is based on the context of who we are individually, and the sum of the knowledge and experience that has made up our lives. I think the reality of the stock market’s valuation is built on much of that same perception, and the short term volatility we see is nothing but people seizing upon the opportunity to make more money based on fear. Fear of the present, the unknown, of losing money, of not having enough money… so many things. And yet among it all, most of us will stick with it over time, with a dogged sense of optimism and belief in the long term, with a tinge of resignation, even indignation perhaps. But our belief in the long term is also based on a context of knowledge and experience, and I think we have history on our side, as well as millions of hard-working people who make up real companies, producing real products and services.

Nothing magic, nothing unique. It’s not even greed, but simply economic self-interest as Milton Friedman might say. Which, by the way is not such a bad thing. And for all who think capitalism and corporate self-interest is a bad thing, you might look around the world a little. As the election approaches, think about who speaks for big government, and who speaks for the individual. Government is never going to solve the problems that individuals face in society. Government can help, but that line between free expression of self interest and mandated social policy is deceiving. Just ask the people of Venezuela.

     I’ll admit it… I’m tired of paying so much for fuel for the car.  What are you paying for gas these days?  We hit $2.90 to $3.15 in our area yesterday.  The cost of filling up the tank is really influencing our habits, shopping decisions, and the desire to drive our cars, and it’s very frustrating.  The cost to school districts and transportation companies for their diesel buses must be astronomical at these levels.  Equally the overland cost of transportation for the big rig companies and airlines.  Grocery prices have been rising this year for a host of reasons, and the transportation costs involved are going to continue being passed on to consumers.  Investor’s Business Daily wrote an editorial yesterday with a stark look at our present reality, An Energy Crisis of Our Own Making:

“Want to bring [fuel] prices down? The real problem behind soaring oil prices — a lack of supply — hasn’t been addressed at all. Today we have what economists call a “demand shock.” It’s a result of the greatest global economic boom in history — a result of more poor people in more countries being pulled out of poverty than ever, thanks to fast-growing economies and free trade.”

      The article talks about how so many of us, especially the political leaders, are all wrappred up in global warming rhetoric, and that it’s not doing much to help us deal with the economic costs of the lack of oil or high oil prices.   Can you imagine the inflationary costs and the impact on consumer spending if this continues for a great length of time?   I understand this will push us faster towards alternative technologies, more efficient cars, etc.  But at what cost to society?  Just think of the economic costs of the lack of oil, and the excess money going to pay for $90+ per barrel oil.  That money comes from everyone’s pockets, especially the government.  And that comes back around from our pockets too of course.   A case could be made for how much money is lost for good, or alternative causes, because we’re stuck paying for $90+ barrels of oil.  If we had more production and more supply, and $40-$60 per barrel of oil, those dollars could go a lot further across the economic spectrum.

     Think of the social programs that federal, state and local government could fund if they were not paying such high prices for fuel.  Think of the charitable causes a family- even our family might be able to fund if we didn’t have to spend so much on fuel costs.  Think of the consumer spending and opportunity costs invoved because fuel prices are so dang high.  Maybe that’s what frustrates me the most… it seems like such a waste of money to pay such high fuel prices when we could be paying less with more production. 

     In our family, we’ve had a little 3-cylinder car since 1999 that gets 45 mpg.  No air conditioning and not very comfortable… but we drive it quite a bit to save fuel costs.  It’s a Chevy Metro, formerly known as the Geo.  The manufacturer stopped making them around 2002 because they weren’t making enough money apparently, and people would pay more for nicer vehicles regardless of mileage. We love that little Metro for the utility it represents, and the sheer savings on fuel costs.

      Now we have the Smart Fortwo  coming out in 2008 in the U.S.  A cool little vehicle that proposes to get around 40+ mpg. 

     Not much better than our Metro, but it’s probably a lot nicer inside and out.  Sounds a lot safer too!  But I’ll still take the little Metro for now.  I think we paid all of $7200 for it in 1999 and it just runs and runs.  U.S. manufacturers are going to need to continue producing much more efficient vehicles- it’s in everyone’s economic interest.  But it’s still not going to solve the supply versus demand side of the equation unless we produce a lot more oil.

“As the chart shows, our failure to replace our depleted domestic oil reserves has left us with a serious mismatch of supply and demand. We use more oil each year, but supply less of it ourselves.  That makes us vulnerable. We send hundreds of billions of dollars overseas each year to the Middle East, Africa and South America, helping fund terrorism and prop up some nasty regimes.”  

     “As Sterling Burnett, a senior fellow at the National Center for Policy Analysis, notes, if we had started drilling in the Arctic National Wildlife Refuge in 1995 — when President Clinton nixed the idea — we’d be pumping millions more barrels today. Ditto if we had more vigorously pursued our offshore reserves.”

     The next few years will be very interesting.  I wonder if the public will reach a point of being fed up?  Or do we just accept the fact of paying higher fuel prices permanently?  I can’t help but wonder if, after we’re well on the road to alternative energy use, and global warming becomes a household name with children’s books telling all about it… what if oil prices are still just as high or higher and we still have high demand?  What if the only thing that will reduce oil prices, and the cost to society for the next 10-20 years is more production?   Will we ever get there?  Maybe someone will invent a killer new technology that will negate the need for oil all together.  That would change everything.

***Update: The toy beads have now sickened 7 more children in the U.S. ***

    I think I’ve had enough of Chinese-made toys to last a lifetime.  Unfortunately, there’s almost no escaping Chinese-made anything these days.   All I can say is I’m fed up!  Why?  Quite simply, the lastest recall involving the highly popular Aqua Dots.  Like so many other things in life, it’s usually “the other guy” that is dealing with some problem, and we observe it from a distance, usually with empathy, thinking, “Poor schmuck, glad that’s not me….”  

   This time it is me, or rather our family.  Nothing serious mind you, but it could have been.  Our son loves Aqua Dots… it’s hugely popular here in the U.S. and it’s even the Australian Toy of the Year.   My wife bought him several different packages, and he has spent many fun-filled hours making cool little designs with these mulit-color beads that stick together.  As it turns out, my usual admonishment about keeping things out of his mouth, not chewing on toys, and other neurotic parental aphorisms was a pretty good thing.  Fortunately he managed to listen (this time). These little multi-color beads have already killed a couple kids (first news reports were incorrect) sickened and hospitalized five little kids who swallowed them, and made several more very sick.

    Apparently they were manufactured in some Chinese toy plant (lacking quality control as usual…) and some chemical was mixed into whatever makes these little beads stick together.  When swallowed it turns into a GHB-like chemical, similar to the ”date-rape drug” type of chemical, and becomes toxic for children.   I don’t know if it’s just some of these beads, all of them or what…  Our son is seven years old now, but a couple years ago we couldn’t keep stuff out of his mouth! 

    And what the heck does it do to pets?   I’ve spent the last year training a wonderful Labrador Retriever… of course he wanders into our son’s room at times and has “retrieved” several of these Aqua Dot designs.   Glad he didn’t swallow them… it’s amazing what I fish out of his mouth.

    But more importantly, as popular as Aqua Dots are around the world…  many other children could have been hurt and sickened over time.  Who knows how may kids have swallowed these things that we haven’t heard about?  It really makes me very angry… and I’m a pretty sedate guy for the most part.  But when unethical, or ignorant people are trying to hurt or sicken our kids, then it’s time to do something.

So this is it.  As of today, I am on a Chinese manufactured product boycott.   I don’t know how difficult it will be to avoid Chinese-made products, but starting today we’re going to find out.  

      I’ve spent a lot of time in Asia over the years, especially in Japan, Hong Kong, Korea and Singapore. I have great admiration and respect for the peoples of Asia and many other cultures and nations around the world.   I’m certainly not going to stereotype any nation or people for the mistakes of a greedy manufacturer that lacks ethical behavior and proper quality control.   But the Chinese government better realize that they are going to lose enormous sums of money based on lack of accountability of manufacturers.   Other governments better beef-up their product safety guidelines and inspections.   Maybe some will think I’m over-reacting.  I feel pretty strongly about this, but I’d love to hear your opinion. 

   There’s a huge difference between being shrewd in business, and making an unsafe product at the expense of the health and well-being of other people.     Whoever makes toys with the “Made in China” label better figure that out.