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GIVING BACK

DSC_0911 TTechBash – Part 2

by Loop Lonagan

as told to John Jonelis –

Seems to me Christmas is all about givin’ to other people and I say we keep it that way. I love Christmas. Ever’ year I start my celebration on Thanksgiving and don’t take the tree down till January the Fifth. That’s Twelfth Night fer youse guys that don’t know. That night I throw a big party, hire cooks, a piano player, ‘n’ ever’body burns a branch from the tree before they leave.

There’s an outfit right here in Chicago that keeps the spirit o’ giving alive all the yearlong. They find people with talent, creativity, intelligence, hard knocks ‘n’ plenty o’ moxey. Then they pay ‘em to train fer big-time jobs. That’s one o’ the nicest gifts you can give a person with them kinda attributes—a chance to use what they got inside themselves. Think about it—all that potential just waitin’ to burst out so bad a guy could explode.

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And the corporations is eatin’ it up, ‘cause they need them kinda people more than anything else, and it ain’t easy to find ‘em. They need ‘em so bad they’ll pay for it in time and money. I think this outfit is gonna be one o’ the most successful self-sustaining social entrepreneurial ventures that ever started in Chicago. They call themselves i.c.stars.

Here I am at their huge TechBash party where I expect to find hoards o’ ravenous, greedy corporate Scrooges. What I really wanna find is a story about giving. The food and bar is open and maybe I take more’n my share of them good things ‘n’ by now I got lotsa Christmas cheer inside o’ me. But hey—it’s a party. I can be just as greedy as the next guy and I’m havin’ such a good time at it.

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Da Passion Project

I hold my MP3 recorder at arm’s length and stick it in the middle of a buncha i.c.stars alums. It’s a weird-lookin’ gadget and these guys freak out like I’m one o’ them Men in Black. I gotta tell ‘em, “It isn’t gonna erase yer memory.” They see I make the movie connection and that brings peals o’ laughter all around.

Two of ‘em stick with me—Nkosi White (Nik) and Christopher Butler. IMG_9829 BChris works fer WGN and the Chicago Tribune, which is a helluvalot bigger rag than this one.

“I love doing graphic design for them. It’s great,” he says. “What i.c.stars was able to do was show me the business end. I didn’t know how to market myself, how to present myself—just to be able to look at an interviewer and figure out what they’re looking for in that time. So they teach you how to assess those things very quickly and how to act on the fly. They put you on the spot but you learn how to rebound and jump into position faster than you could before.”

Nik landed a big-time IT job with WW Grainger just a month outa i.c.stars. We hang out a while and I find out he makes Craft Beer. Then he tells me something that grabs my attention:

“Passion projects,” he says. Passion projects are huge. That’s one thing they teach us at i.c.stars. Have a desire to learn technology, but then in addition to that, identify with what your passion is. Understand that you have a civic duty to fulfill—whether it’s from the neighborhood you came from or whether it’s highlighting others that don’t really get the visibility that you get. Have a passion project—have a civic duty. And then be great in technology as well. It’s a combination of the two. That’s what makes i.c.stars special.”

Now THAT—that right there is what I call the spirit o’ giving.  That’s what we need more of.

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Da Sponsor

I talk to one o’ the Big Honcho Sponsors—Jon Mathews from BridgePoint Technologies. (Yeah, he spells his name with one ‘t’.)

“We do a lot with i.c.stars,” he says. “Especially with the interns they take on—teaching them development. We work with a lot of companies who need young developers and need more people going into this avenue.”

So I ask him straight out: “D’ya find these interns come out fluent in programming?”

“Yes, they’re trained very well. It’s amazing what i.c.stars does for those who weren’t brought up in IT. We’ve had positive feedback from clients where we placed them.”

So that’s good news right from the source.

I wanna talk summore to Vera Shabazz. (See Part 1 of this series.) So I hunt till I find her ‘n’ ask just what i.c.stars did for her—personal-like.

icstarg 17 B“They teach you how to think technically—not just thinking—but thinking technically,” she says. “It’s just a great place to be. It’s a great place to learn. Through i.c.stars, I was able to re-invent myself from being in banking to now working IT at United Airlines. I don’t know where I would be if I hadn’t gone to i.c.stars. I don’t.”

Quashe׳ Granville joins our little circle: “i.c.stars is a place where you can bridge the gap between technology, business, and leadership skills.” That’s a good businesslike description. Just one line. I’m impressed. I drink down the last o’ my Scotch ‘n’ Soda and ask, “How d’they do that exactly?”

Vera smiles. “After the first few weeks of training, the purpose is to do a large project with a major company, build teams and camaraderie, and to get you in the mindset. It’s like a boot camp. Once you’re done here, you can secure a job.”

The music gets louder and I lean close to Vera. “So you do a simulation or some kinda practice project?”

“No, it’s real. When I was at i.c.stars, our company was TTX. You know who they are, right? Well if you ever ride the Metra, those are their cars. The CIO and two others were the mentors that helped us through our project. Their CIO was the one who helped me get my job at United Airlines.

Quashe׳ leans-in closer too, but even in all this noise, I don’t have no trouble hearin’ his deep voice. “Right now, our team is working on a mobile app that’s going to help UL with brand awareness.”

That catches me off-guard. “UL asked i.c.stars to do somethin’ that big?”

“Actually, WE put the project together. UL just told us they needed help with brand awareness.”

“The interns figure out the project,” says Vera. “What is it the company wants? What do they need? From the time you’re doing that project, they’re analyzing you. Asking questions. They want to know how well you handle yourself.”

I study these two. Both hard survivors—both soft hearts. “Sounds to me like a tough kinda program.”

Vera nods. “It is tough. But i.c.stars makes sure about you. If you think about it, they’re putting us back into the community and asking us to give back. If we’re not prepared, then what do we have to give back?

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Giving Back

“Everything is about giving back,” says Vera. “They let you know that if you don’t give, you can’t get. So once I graduated, whatever I have, whatever I can do, whatever I can give—I give it because I know that it’s coming back tenfold.“

This gal makes a wonderful spokesman ‘n’ she’s a terrific lesson in gratitude—somethin’ most of us just don’t seem wired for.

“I love i.c.stars!” she says. “ Whatever I can do, they’ve got my help. I think all of us who are alums still give back to i.c.stars. We volunteer for whatever Sandee needs.

“I also give back through Virginias House – a non-profit organization, which is for victims of domestic violence. My goal is to provide traditional housing for 1000 survivors and their children by the year 2025. I want to build a facility on the south side of Chicago that will allow them to leave their abusive homes and also stay for a year, getting themselves prepared to move on”.

“Whats the chance o’ gettin’ that off the ground.?”

“We’ve already got the programs together. We already did one function and we’re doing more. Since leaving i.c.stars, we have helped 50 families. They might need food. Their children might need clothes or school supplies. We help them with that as well. We have partnerships from Jewel and Dominick’s. Gift cards. Food. Clothing.”

Gettin’ In

I ask Vera, “How hard was it to get into the i.c.stars program?”

“The first thing I thought when I did the application process was, ‘What the heck? What is this for? Why do I need to fill out so many pages?’ It didn’t make sense to me. But I think it’s to see how badly you want it. I could have been discouraged and just said, ‘Forget it.’ But just because it was so lengthy, I decided, ‘I’m going to do this and they’re going to take me.’

“After the application, there’s a newbie puzzle, and that is a real brain twister. Then you go down for the written assessment and the technical assessment. And then once you’re done with that, they call you back for the interview.”

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Da Mobile App

I snag myself a snack from a passing tray and ask Quashe׳, “What’s with all these booths scattered around the place—all them people waitin’ in line?”

“Interns are trying to talk to CIOs,” he says. “Consulting firms too. They’re trying to get their idea out there and CIOs of all sorts are right here to listen.”

“So what about your mobile app?”

“It’s designed for 5-9 year olds to become junior scientists. Kids create an avatar. They’ll see science projects based on fire, water, electricity. Everything about it is going to be virtual. You get to play around with these things and the beautiful thing about it is that when you want to mix two compounds together, you can just shake your phone and you’ll be participating. Let’s say two sets of wires are not UL safe—that’s out of spec. So your avatar goes to touch the wire and gets a shock.”

“D’ya shock the kid’s hand?”

“Oh, no . . . no-no-no.” That deep bass again.

“Maybe give ‘em a vibration?.”

“We can do that. There are a lot of things we’re going into but at the same time we have to focus on one key area: You know how you always tell your kid, ‘Don’t touch the stove, because it’s hot.’ Well now we have to deal with, ‘Can you touch the stove handle? Is it UL safe? Is it UL approved?’

“Sounds kinda elaborate as a mobile app. So what’s your personal goal when ya graduate?

“My personal goal is to find a decent company that has a solid culture that will actually cultivate what I already know. Basically somewhere I can grow.

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Da High Tea

I asks Vera, “When you was at i.c.stars, what was yer favorite part o’ the day?”

“We have what we call High Tea. Celebrities come—we call CIOs celebrities—and they tell us their stories. But first, each team member pours tea for the team member on their left and introduces that team member to the CIO and it goes around the table. We don’t talk about ourselves—we talk about the person whose cup we fill—what he does, what his likes are, what his super thoughts are, what he’s going to do when he graduates i.c.stars and why they should hire him. Just to go through that phenomenon, it will blow your mind. It is just something that you do not get used to. You need to come to see a High Tea for yourself.”

“Well, I dunno…  That’s all they serve?  Tea, I mean?”

“Just tea.”

“Hmff.” I stroke my chin to make her feel like I’m thinkin’ real hard about it, but to me it’s a no-brainer. I wanna check the place out anyhow. “Okay, you got me. Lemme know when I can come.”

GO TO PART 3 – THE APPRENTICE MEETS DIGITAL BOOT CAMP

GO BACK TO PART 1 – TALENT HIDES

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Da Contacts

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Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link . This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2013 John Jonelis – All Rights Reserved

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5 Comments

Filed under App, big money, Characters, chicago, Chicago Ventures, Christmas, city, Education, Entrepreneur, Entrepreneurship, Events, i.c.stars, Innovation, Innovation and Culture, jobs, loop lonagan, Mobile, Mobile App, Mobile Marketing, Social Entrepreneur, The City

TALENT HIDES

icstarg 10aTechBash – Part 1

By Loop Lonagan,

as told to John Jonelis –

 I feel the bite of Christmas in the air. It’s the season o’ giving. I’m here at TechBash coverin’ fer Da May Report but I never seen an event like this before. Right away, I get hit with pounding music, flashing lights and maybe a couple thousand er more people. Place is fulla bigshots.  So many C-level execs at one party—mosta them CIOs o’ big corporations. And the food and open flowing bar. I mean, this is a HUGE party that puts Dennis Koslowski and Tyco to shame—but this one’s legit. Lemme tell you about it:

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Talent Hides

You know where talent hides? In places where people got no hope. In the tough neighborhoods with lousy schools, worn-out housing, and alotta crime, gangs, ‘n’ drugs. Yeah, talent hides real good in them places ‘cause so many people don’t know they got potential.

A gal named Sandee Kastrul came across this idea:  There’s more talent here than in all o’ them comfy middle class suburbs or even at the universities. And there’s people here with a whole lot more inner strength than them soft-living places, too. We got lotsa neighborhoods like this right here in Chicago. Yeah, it’s still a city o’ neighborhoods—nothin’s changed much since the FIRST Mayor Daley.

What that means is there’s a huge population o’ smart people them big companies don’t know nothin’ about. And the companies wanna find out who them people are. They wanna do that in the worst way. That’s the genius o’ this thing. So Sandee co-founded i.c.stars to make it happen and throws dis big TechBash party every year along with alotta other events.

i.c.stars is a place where raw corporate greed and avarice can do some good in this rough old world. That’s right—this ain’t no charity organization—it’s an opportunity fer big business.  A company that wants in on this thing hasta participate and support i.c.stars if dey want a good outcome. And why not?

  • It’s better than outsourcing yer executive search, ‘cause you get to know the applicants up-close ‘n’ personal.
  • You get yer tech projects done cheap ‘cause them projects turn into curriculum fer the i.c.stars interns.
  • And that means the interns get paid t’ learn, so it’s a big opportunity fer them too. Thousands apply every year.

Big business knows a good deal when they see it and so do smart people looking fer a career. The whole idea’s brilliant! What we’re lookin’ at here is somethin’ that’s gonna grow into a self-sustaining social enterprise.  That’s like a gift to ever’body.  Hey—like I told ya, it’s Christmastime!

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Da Event

So all deeze huge companies come to this party fer what they want most—TALENT. That’s somethin’ that’s always hard t’ find.icstarg 9a And at dis TechBash event, Da Talent can talk one-on-one with Da Top Brass—if they can make themselves heard in all this hubbub. I’m talkin’ here about executives that most folks never even get to meet. Believe it er not, these C-levels bigshots even cough up their contact info and follow up with these interns personal-like.

i.c.stars stands for inner-city computer stars, and from the look of it, there’s lotsa them kinda folks here. All the interns and alums is wearin’ star-shaped badges that flash colored lights so it isn’t hard t’ spot ‘em.

QuasheI meet one intern that’s built like a football player in a good suit. Name of Quashe Granville [pronounced QUAH-SHAY] ‘n’ he’s got a voice dat rumbles like James Earl Jones. I’m expectin’ to hear somethin’ like “Luke, I am your father,” but he’s real professional. So I asks him, how does i.c.stars really work? Is it some kinda incubator?

“Yes. It’s not like a traditional college,” he says.  “You get the tools and everything you need but it’s largely self-taught. When it comes to computer languages—jQuery, CSS, JavaScript, Ruby on Rails—in order to learn those, it’s about what you put into it. You get out of it what you put in.”

Man, I love listenin’ to that huge voice.

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Who Gets In?

I run into Jerry Johnson, their Candidate Relations Manager, ‘n’ ask him how hard it is to get into dis program.

“It’s 20 out of 3000.”

That sends me reeling ‘n’ I almost spill my free scotch ‘n’ soda. A waiter comes by with a tray o’ food ‘n’ I wolf down some carbs ‘n’ protein. “Hey Jerry,” I say, “That’s a hellovalot tougher than getting into the U of C.” I say that while munching on somethin’ that tastes real good. I don’t know what I’m eatin’ but it’s great.  Summa them Hors d’oeuvres, I guess.

Quashe pipes in: “It might be hard, but out of those 3000 I can genuinely say 2600 eliminate themselves because they don’t want to go through the process. So then it’s Jerry’s job to sift through the other 400.”

So I ask: “The ones with enough hope dat you can make ‘em believe?”

Jerry comes right back: “The ones that have the fortitude to do what we ask them to do.”

“So whadaya look for in yer applicants?”

“Resiliency—that’s the best thing. Creative thinking. We have a lot of different logic puzzles. We have coding exercises if people have never done it. It’s all resiliency built.”

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Da Result

VeraI meet an alum named Vera Shabazz [pronounce SHUH-BAAZ] and what she says is somethin’ worth hearin’:

“Anything i.c.stars does, I’m behind 100%. Before them I lost my job and had no inkling of what I was going to do. Then I found i.c.stars. They pay you $150 a week just to come and learn.

“It’s not easy. This is a tough job and they treat it like a job. It is very, very tough. You have to go through a lot of training. At first I was afraid. I’d never done it before.”

I look her in the eye and decide this gal means what she says. So I put it to her, “Ain’t that an awful huge learning curve to overcome.”

“It was huge. It was HUGE. And to tell you I was afraid is an understatement. But my colleagues were so phenomenal. They helped to bring me through what I did not know and they erased all my fears.

“I didn’t know anything about technology. Now, I work with United’s 55,000 employees. Whenever something goes down, they call us. A ticket agent might say, ‘The computer isn’t working—the printer isn’t working—I’m getting an error message or I’m getting this or I’m getting that.’ With i.c.stars I learned how to drill down. How to ask, ‘What are you seeing? What is happening? What did it do first? What did you do first?’ And it calms them down that we know what we’re doing. They can help their passengers board their airplanes on time.

Whatever they call me with, I’m able to decipher and figure out what they need, all because of i.c.stars.

Now Vera’s givin’ back by supportin’ Virginias House. They help survivors of domestic violence.

Checkout dis great video on i.c.stars:

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GO TO PART 2 – GIVING BACK

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Contacts

i.c.starswww.icstars.org

Sandee Kastrul – sKastrul@icstars.org

Jerry Johnson – Jjohnson@icstars.org

Quashe’ E Granville – QuasheGranville@gmail.com

Vera Sabazz – vaShabazz@VirginiaHouseInc2.com

Vera’s outreach: Virginias House – http://VirginiasHouseInc2.com
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Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link . This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2013 John Jonelis – All Rights Reserved

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14 Comments

Filed under big money, Characters, chicago, Chicago Venture Magazine, Chicago Ventures, Christmas, city, Consulting, Education, Entrepreneur, Entrepreneurship, Events, Homeless, i.c.stars, Impact Investing, Innovation, Innovation and Culture, Internet, Internet Marketing, jobs, loop lonagan, Marketing, Mobile App, Mobile Marketing, philanthropist, philanthropy, public servants, Social Entrepreneur, Social Media, Software

THE RESUME IS DEAD

Funding Feeding Frenzy – Part 4

VERBATIM by Loop Lonagan – Investor and man about town,

as told to John Jonelis

FFF LogoLoop Lonagan here at FFF and we’re in for a treat. Mitch Schneider is pitching his new company, Kauzu. I like companies that do well by doin’ good fer people. And this one’s all about local jobs that keep people off the streets.

Say you got a business in an urban setting and need to hire an employee. You want somebody local. Hey, everbody wants local. Kauzu logoMcDonalds, Wal-Mart, Pace, Cook County—they want local people too. Local’s always better. Local employees stay longer and save the business alotta money.

Just by way of example, I’ll explain this from the point o’ view of a small guy—a shop or restaurant or somethin’.

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Da Old-Fashioned Way

You wanna put out feelers. But how you gonna do that? Monster? Whoa—they’re expensive and you get buried by applications from all over the place. So what else can you try? How about Craigs List? Usta be pretty good—my own daughter got a job thru them about five years back. But they’re still not as local as we’re talkin’. Then there’s the classifieds, but that’s expensive and in a city of millions, that’s not really local either. You can post a help-wanted sign in yer restaurant window, but then you gotta interview anybody comes in off the street, like my pal Big Bubba. Can’t picture him workin’ tables unless yer runnin’ a racket and need an enforcer or somethin’.

So those are all old-fashioned methods. If you decide to use one o’ those yer gonna get tons o’ applications to wade thru. Lots ‘n’ lotsa paper. Most o’ those’ll be the wrong people for the job. Ever try ‘n figure out which is best by lookin’ at paperwork? Good luck to you!  Far as I’m concerned you might as well throw darts.

Then after you pick a buncha people you think look good, you gotta interview ‘em. All of ‘em. There’s laws. Are you a professional in the use of modern interview techniques? Probably not. So yer wastin’ alota time and money. And it’s all happenin’ when yer short on help. I don’t know about you, but I don’t like it.  What if we could dump the resume and the application too?

.The Resume is Dead

Da New Way

Now, when I’m picking a stock, I use modern filtering and modern analytics. Why not apply that technology to jobs? So where do you go to get that?

Tablet

Along comes Kauzu. Here’s what they do:

  1. A business posts a digital help-wanted sign on Kauzu’s website for next to nothing. Kauzu uses filters and analytics and automatically matches the right people with the right jobs. And you get to set the filters yerself. No need to study hundreds of resumes or interview scores o’ people.
  2. Job-seekers fill out profiles on the Kauzu site for free. One and done. They see the close-by jobs that fit them right on their cell phones.
  3. The result? Businesses save time and money. You only interview pre-screened local candidates that are more likely to stick. Job seekers get a hyper-local job search with fully mobile functionality. The resume is a thing of the past.

Text Feature

“But,” you say, “What about people that don’t have smartphones.” And that’s true for about 70% of the unemployed. But hey—you don’t need no smartphone. Text works just as good. Just input yer location ‘n’ it shows you the nearby jobs.

If you got one o’ them newfangled smartphones or tablets, it gets evenSmart Phone better. Geo-location shows you the jobs right on a map. Of course you can always go to the public library and use their computer fer free.

Pretty slick. I like it a lot. So do chambers of commerce and city colleges that are pushing Kauzu. The timing couldn’t be better. Check out this video. And there’s lots more on their site.

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Da Business

Mitch, Paul, & GlennThis Mitch Schneider guy is super smart.  I had lunch with him not too long back at One North.  When we got done four hours had blown by.  I guess I like talkin’ to intelligent people and I’m impressed with Mitch.  I think this guy’s got the know-how, the drive and the creativity to make any startup sit up and bark.

They’re asking $500K for a 30% equity stake and expect to break even in month 17 with a 10X multiple in five years.  Translation—they’re investable.  So far they’re bootstrapping, but along with Paul Cusimano, they already built a nice team, a great website, and they got a big advisory board that includes—get this—Glenn Gottfried.  So they got the management, the tools, the channels.  Now they’re raising the money.

Mitch Pitch

Da Judging

So how did the judges respond to a terrific offering like this? Yer not gonna believe it. They didn’t get it at all. Mitch got four o’ the dreaded GO FUND YOURSELF signs and one STILL FISHING. Not a single FUNDABLE. Strange—real strange. Why didn’t the judges get it? The audience sure did—no question. People watching the Q&A got so frustrated, they kept calling out answers to the judge’s questions. That’s against the FFF rules but hey, it was kinda like a revolt. And these judges are guys I respect, so I ain’t got it figured out.

So afterwards I ask Mitch about it and he seems strangely unconcerned about it all. Turns out he’s using a different pitch every time he presents. He videotapes every one o’ them and runs comparisons. What a terrific strategy. Like I said, this guy’s smart. So he found a pitch that connects with an audience but not judges. He won’t repeat that one, but it might be good advertising fodder.

Glenn Gottfried at Lunch

Glenn Gottfried at Lunch

So I go downstairs fer some lunch and ask Glenn Gottfried how come the audience understands it but the judges don’t. He’s got alota good ideas fer fixing it but no real answer to why it happened. Guess we’ll wait fer the video analysis.  I’m still scratching my head, but it is what it is. If any o’ you guys can offer a suggestion, feel free to leave a comment.

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Continue to Part 5

Go back to Part 1

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Da Contacts

Kauzu  www.kauzu.com

Funding Feeding Frenzy

www.facebook.com/FundingFeedingFrenzy

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Chicago Venture Magazine is a publication of Nathaniel Press www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link . This is not investment advice. We do not guarantee accuracy. It’s not our fault if you lose money.

.Copyright © 2013 John Jonelis – All Rights Reserved

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7 Comments

Filed under angel capital, angel investor, big money, Characters, chicago, Chicago Venture Magazine, Chicago Ventures, chopin theater, CORE Insight Story, Data, Entrepreneur, Entrepreneurship, FFF, Funding Feeding Frenzy, Innovation, Innovation and Culture, Internet, Internet Marketing, Invention, investor, jobs, loop lonagan, Mobile, Mobile App, Mobile Marketing, new companies, pitch, Social Media, Software, vc, venture capital

THE BUM IN ME

Funding Feeding Frenzy – Part 2

VERBATIM by Loop Lonagan—investor and man about town,

as told to John Jonelis

FFF LogoLoop Lonagan here. I’m headin’ out to this year’s Funding Feeding Frenzy. It’s the big event if ya wanna see all o’ Chicago’s best startups in one place. This time the FFF is happenin’ at a place called the Chopin Theater northwest o’ downtown and I wanna see how that’s gonna work out. Will there be a string quartet? They yusta hold it at a huge automobile showroom which seems weird but worked out. It had about half the floor space of McCormick Place and plenty o’ room fer hordes o’ people to roam. But this is gonna be a lot different.

One thing I wanna impress on your readers, John, is about Chicago itself. You know I love this place but face it—it’s a city with all the usual warts ‘n’ barnacles. And every neighborhood is different, so yer either at home here or yer not. Nobody never gave me no trouble. Maybe I’m no pushover, so I got an advantage. But if I’m gonna tell this story, I gotta give you the whole picture. And I’m gonna give it my best shot.

Clybourn

The Street

I’m comin’ in by train and can’t resist gettin’ off at the old Clybourn Station. From here, it’s only a mile walk to where I’m goin’. That looks real good on a map. But my advice to you is don’t do it. Get off all the way downtown and take a nice comfy cab to the event. This ain’t a bad part o’ town. Nothin’ like that. Just take my advice.

Once I’m on the Clybourn platform I draw in a lungful o’ cold air. It’s feelin’ like the Christmas season just gettin’ started up here and I got a wad o’ money in my pocket. I get my choice o’ passages down to street level. That always feels like descending into the bowels of hell. Mincing little concrete steps winding through grimy concrete tunnels. Once-yellow paint peeling off the walls. And the best part is you get yer choice o’ tunnels! They’s all the same!

It’s still early and the usual crowd is layin’ about the sidewalk. I step over Old Man Percy, ‘cause I don’t wanna disturb his sleep, but the others is startin’ to rise’n’ shine. I give a hearty good morning to Fred and Big Bubba and ignore Merry ‘n’ Pippin huddled in a corner—those two give me the creeps. Summa these people are new to me but you can’t never know ‘em all. Familiar faces go missing but still, there’s never no shortage. I got it on good authority that the poor will always be among us.

People tell me these guys makes Fifty Gs just panhandling. I say it’s a buncha hooey. The idea got invented in that Sherlock Holmes story, The Man With the Twisted Lip, ‘n people been repeatin’ it ever since. If it was true these guys’d find a warm place to sleep. Ever try an icy Bridgesidewalk ‘round about Christmastime? And there’s more ‘o these people hangin’ ‘round than ever. That means more competition. That means harder times fer all o’ them. Sure, any profession’s got it’s elite that strike it rich, but that leaves the multitudes, scrablin’ fer crumbs.

The Professionals

I always say there’s a lot to bein’ a good bum. You feel so warm inside when you drop a buck in his hat. ‘Specially near Christmas. Makes your whole day. Some ‘o these derelicts play musical instruments and summa them is pretty good at it too. Come to think of it, these guys fill an important role in society. They’re public servants. Maybe the city should fit ‘em into their patronage system. It’d mean more votes for The Chicago Machine. After all, The Machine is politicians.  And politicians is people paid to be bums.

Hell, when you get down to it, there ain’t much difference between these guys ‘n’ me. Maybe I invest alota money, drink good liquor, sleep in a warm bed. But whadda I really do for the world? I been givin’ that some thought lately and all I comes up with is this—I provide liquidity. Sounds pretty shallow, don’t it? Let’s just imagine some day I make a big mistake and lose it all. They throw me on the street. In no time, I’m part o’ this crowd. Makes a guy think. Maybe I got a talent for it, though—who knows? But it’s a profession without nobility.

Of course there’s gangs and outright criminals in the mix. Then there’s a lotta homeless people with no hope. Alcoholics, drug addicts, and whack jobs. Minds gone over the edge. They say Old Man Percy’s got millions stuffed in the bank but he’s sleepin’ here on the pavement whenever they shove him outa the loony bin. You think you can change him? Think again.

The Scholar

Everybody’s awake now. I always ask if one of ‘em can recite a famous quotation. Gotta keep up the level o’ education here. So I calls for somethin’ Christmassy. I give ‘em a choice—Isaiah 7:14 or Matthew 1:23, whatever their preference—theys exactly the same text. And Fred rattles it right off while Big Bubba stares him in the face, mouth hangin’ open. Fred’s a real intelligent guy. He’d be a good addition to my team.

Note to John – Why not make him a reporter?

Note to Loop – Bring him around for an interview.

Anyway, Fred’s recitation earns a C-Note for every one of ‘em that’s present—even Old Man Percy and the two Hobbits. Except I peel off ten fer Fred. Hell, it really is almost Christmas. I know most of ‘em is gonna waste it but I ain’t tellin’ these guys what to do with their own money.

Then Big Bubba rumbles to himself in a deep bass, “Emanuel—I thought dat was da name o’ da mayor.” Whadaya gonna do with guys like that?

Note to John— I ain’t had no coffee yet this mornin’ after a real rough night. Too much booze and no sleep, so maybe you oughta clean up my copy. I think I’m runnin’ on like the old days—I mean before I got some college. Understand what I’m sayin’?

Note to Loop— I find your account lucid and concise. I’ll publish it as is. And a graduate degree in finance at the University of Chicago is more than “some” college.

Overpass

Stumbling over the Truth 

Fred and Big Bubba take me up on my offer of breakfast. There’s a good old diner along the way. That’s the real reason I picked this station. But before you get to the gentry part o’ town, you gotta walk under the overpasses. The Kennedy Expressway bridges make natural roofs fer the homeless and the piles o’ rubble at the sides reek somethin’ horrible. Yeah it’s raw but so is any city.

Another thing about cities is potholes. In good times there was always holes in the street. Now, with this economic depression it’s worse than ever. So we’re walkin’ down Ashland Avenue at a brisk clip, enjoyin’ each other’s company and I’m scannin’ around like any careful city dweller when the next thing I knows I’m on my face. Lousy pothole—right in the sidewalk of all places.

Fred and Big Bubba haul me back to my feet and brush me off and I check for damage. Maybe a guy can get away with slashed knees and filth on his rumpled blue jeans but it don’t look right on a $2,000 suit. In an instant I go from Mr. Bigshot to a reject from the Salvation Army. But now I fit in with my companions, so I shrug it off. And I got a mile ahead o’ me to walk off the sprained ankle. But in a couple blocks we reach the nice section and the diner I told you about.

The Private Room

The cashier at the restaurant tries to push us out the door like we’re the Blues Brothers or somethin’. Probably thinks we’ll drive off the clientele. Phooey. Maybe this is a classier joint than Julio’s House of Jalapeños but hey—it’s still a diner, not the Chez Paul. So I ask for Lonny, the owner, and he leads us to a back room stacked with boxes. They lay a nice table for us and the room is perfect for planning out crimes and runnin’ poker games.

Big Bubba orders three stacks o’ pancakes. He butters every one of ‘em and drowns ‘em all in maple syrup. Fred sticks with a piece o’ pecan pie. But I dig into steak ‘n eggs with toast and A-1 Sauce ‘n’ bacon. And more important—a big pot o’ coffee for each of us. Round about the fifth cup I’m feelin’ a whole lot better. Fred smokes a cigarette. We talk. Lotsa stimulating conversation. It cheers me up. Now I’m ready—ready to meet with big money at the FFF.

Back on the street, Big Bubba and Fred part ways with a wave and a Merry Christmas. When I suck in the brisk air, I feel more coherent and alert—ready to pick winners, negotiate terms. Less than a mile left to walk off this sprained ankle. I think about them that puts their heads down on a frozen sidewalk and the ankle don’t seem so bad no more.

Note to John—Do I sound more coherent and alert now that I had my coffee?

Note to Loop—You’re always alert.

The Gentrification

Here’s another thing I find interesting about the city. Here in these gentrified sections you can never tell what’s inside a building. Alotta these are new construction or complete makeovers with big-time brands on their signs. Those buildings are nice inside—most o’ the time. But the others can surprise you. The outside of the Chopin Theater looks like a dump that’s been a dump for the last hundred years. Turns out completely different once you walk in the door. This place is gorgeous. A great spot for the FFF.

Chopin Theater

Chopin Theater

A beautiful lady greets me like royalty. I check the layout. Nice lobby. Nice coffee bar. Nice theater space for the companies to present. Steep stadium seating so everybody can see. Doors and windows floating around the stage give it a class look. I figure them’s props for some production but it’s a bonus for us.

Chopin Theater Lobby

Chopin Theater Lobby – photo courtesy of theater

I take in the morning’s presentations. Then I go bummin’ downstairs. Wow! A huge room with a great spread of food and drink. This is way better than the old place. People can talk and strike deals while they feed at the trough and make all the racket they want. Meanwhile, the presentations go on in the kinda setting they deserve—quiet and focused. Kudos to David Culver and company for finding this spot and nailing it down.

Chopin Theater Stage

Chopin Theater Stage – photo courtesy theater

So what’s the FFF all about? One o’ the most important things in the world—starting brand new companies! That means keepin’ as many people off the streets as we can! So here I am wolfing down food, crackin’ jokes, and talkin’ to intelligent company. Lotsa stimulating conversation. It cheers me up. Just like breakfast with the bums. Now I’m ready—ready fer the rest o’ the day.

Chopin Theater

Chopin Theater – photo courtesy theater

Listen John, I went off on a tangent and didn’t even cover the event yet. Now my batteries is gettin’ kinda low. I’ll buy some fresh ones and get back to ya later. Fer now, have a joyous Christmas.

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Continue to Part 3

Go back to Part 1

Links

Chopin Theater

http://www.chopintheatre.com/event.php?id=2275&pageId=soon

Funding Feeding Frenzy

https://www.facebook.com/FundingFeedingFrenzy

Find Chicago Venture Magazine at www.ChicagoVentureMagazine.com Comments and re-posts in full or in part are welcomed and encouraged if accompanied by attribution and a web link. This is not investment advice. I do not guarantee accuracy. It’s not my fault if you lose money.

.Copyright © 2012 John Jonelis – All Rights Reserved

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9 Comments

Filed under Characters, Chicago Venture Magazine, Chicago Ventures, Entrepreneur, Entrepreneurship, Entrepreneurship and Politics, Events, FFF, Funding Feeding Frenzy, Innovation, Innovation and Culture, jobs, The City

THE CLIFFS OF INSANITY

Seven Solutions

VERBATIM – From storied business consultant, J. P. Pierogiczikowski—affectionately known as Joe Perogi,

as told to John Jonelis

Cliffs of InsanityJoe Perogi here. I’m listening to Peter Orszag speaking real clear on The Fiscal Cliff. He comes all da way from Manhattan to give this great talk to us at The Chicago Council on Global Affairs.

This guy’s real smart. Sure, he’s way left o’ my way o’ thinking but he’s got alotta ideas,  Ideas make money move. And he understands the politics as well as the economics – a rare combination.  So after the talk, I read a buncha his articles, put it all together, and here’s what I come up with:Chicago Council on Global Affairs Logo

He says $750 billion per year of income is already vaporized. That’s right—it’s down da tubes fer good. He says it’s as bad as the dot com bust but get this—this time we’re not bouncing back so fast.

Peter Orszag - Bloomberg

Peter Orszag – Bloomberg

Private lending is zilch. And the jobs are just gone. We lost workers permanently. Lotsa skills become obsolete. People give up.

Here’s something new to me: This mess has been going on long enough that disability benefits are rising. And as Orszag puts it, “Once people get on disability, they don’t go off.” While all this is goin’ on, global labor supply quadruples. So no wonder you can’t find a job.

According to Orszag: “People can sense that all this is happening and that nothing is being done to fill that $750B hole. They’re right.”

Bridge Out Ahead!

Now take that same broken-down train and drive it off the Fiscal Cliff. More than $600 Billion in tax increases and spending cuts by the end of 2012. We’re talkin’ a train wreck of epic proportions on a national scale. Probably push Europe over the edge too.

Budget Elements - American Enterprise Institute

American Enterprise Institute

A Little Comic Relief

It’s times like these we gotta keep our sense of humor.  Orszag cites some stats from his Bloomberg column and that takes my mind back to just before the talk. I actually watch Orszag post that article while we’re sitting together in da coffee shop. And I have some fun with that. My old friend, Ethan Sobriety invited me to this shindig and I get here earlier than he does. So I introduce Orszag to him and Ethan almost throws a coronary. Orszag was Obama’s top dog in Management and Budget and the Congressional Budget Office. But he goes back further. Senior economist under Clinton’s Council of Economic Advisors and the National Economic Council.  These days he’s bigtime at Citigroup.Bloomberg Logo

My friend Ethan ain’t no slouch neither. International currency investor who makes a home in England, Asia, Africa, and right here in Chicago, but when the color comes back to his face he says hello to Dr. Orszag and shakes his hand. From his reaction I figure Ethan’s got a whole lot of respect for this guy.

Posting Article

Orszag Posting His Article

Whacha Gonna Do?

But Orszag is still speaking and I snap my attention back to what’s going on now, right in front of me.  He asks, “Will we shoot ourselves in the foot again?”  He says we’re doing stimulus the wrong way. “We need to do specific, gradual, policy that’s hard to reverse over time.” Gradual and irreversible makes for stability. That way business knows what’s gonna happen and has plenty of time to plan for it. Lending opens up. Da economy starts workin’ again. So are we doin’ that?  No, he says, “We’re doing the opposite.” Not good.

Anybody’d think them bums in the White House, the Senate, and the House of Reps could work this thing out. But Orszag shows two simple charts that explain why it’s so hard to fix. The first one explains the way Left and Right thinking used to overlap. All the deals get done in that overlap area. (This guy’s an economist and uses bell curves to make his point. Ethan tells me Venn diagrams might make more sense to most people, so I’m giving you that version.) Here’s the way it looked in the ‘60s:

VENN 1

Now let’s fast forward to today. You see it? There’s no overlap at all no more. No consensus. Maybe no deal.

VENN 2

Polarization

Some say polarization is the natural result of gerrymandering and Orszag says that might be as much as 15% of it. But he thinks it’s driven by the polarization of the population itself. We’re doing it to ourselves,” he says. Then he explains how:

  • If you put like-minded people in a group, the group becomes more extreme. That rings true to me. It’s plain common sense.
  • Landslide elections in voting districts are getting a whole lot bigger. Lotsa candidates run unopposed or with token opposition. That means our neighbors are more like us. Again, more like-minded equals more extreme.
  • Nowadays we can all pick our own reality. Each of us can select our own news feeds and the like. Orszag talks about how he “unfollowed” a Twitter user who criticized him. So now that person is still criticizing him, but it’s not in Orszag’s world no more, so it’s got no impact on his decisions. Again, if you listen only to like-minded people, you get more extreme.

The Positions

So here are the positions on da Left and da Right:

  • DA LEFT—Let the Tax Cuts Expire for the Rich– This is the plan to tax the $250K+ crowd. Problem is, it really doesn’t raise much money and it kills jobs.
  • DA RIGHT—Entitlement Reform – Everbody agrees we gotta do this, but gimme a break. If the country was ready to bite da bullet, Obama wouldn’t be in the White House again.

If there’s no deal, we go over The Cliffs of Insanity and da country goes into another Great Depression.

The Cliffs of Insanity from The Princess Bride - Wikipedia

The Cliffs of Insanity from The Princess Bride – Wikipedia

Seven Solutions

Even with no consensus, Orszag sees a number of possiblities:

  • Two-Stage Agreement – A 9-month temporary deal to give the bums in Washington time to work it all out. This is one of the president’s proposals.  Give him what he wants now and he’ll talk about the rest later.  But Orszag asks a good question: “If either side gives in now, why believe the other party will change later?”  So nobody budges. 
  • Tax Reform Refund – Let the tax cuts expire.  Replace them with a $1,600/year tax refund.  Do that till a deal is reached or the economy recovers. This way negotiators start with a clean slate. Both sides might find it easier to swallow. This is one of Orszag’s interesting ideas.  Maybe it works. I dunno.
  • Cut Spending – Orszag points out spending cuts are easy to say but hard to do. The more vague the proposal, the more popular it is and the more useless. When he was in government service, he’d give out a list of tax cuts but nobody could agree on anything significant.  But we gotta cut spending somehow.
  • The 50K Limit – If we limit itemized deductions to $50,000 for everybody, we can raise the same $700 Billion we’d get from taxing the job creators. But 90% of that is deductions from just three things: local taxes, home mortgage interest, and charitable contributions. Of those three, charity is the only one a taxpayer can do anything about. So charities would get clobbered. Not a good thing.
  • Raise the ThresholdExtend the tax cuts for everybody under $1 Million insteada chopping it off at $250K. So far nobody’s hot on this, but who knows? It’s the natural place to reach a compromise.  And as I see it, anybody earning $1M is likely to be runnin’ a corporation, not a mom and pop proprietorship or LLC. Regular corporations are taxed separate from personal income so I figure it shouldn’t oughta hurt jobs too much. But taxing corporations hasta raise prices. We all pay fer it, so either it’s a hidden tax or it’s inflationary.  I think one ‘o these days we’re finally gonna see summore inflation.
  • Scale Back Tax Breaks – Don’t raise rates at all. Chop off deductions the $250K-and-up earners. House Republicans might bite. But the White House hasta make a concession here and this commander in chief hasn’t shown any ability in the art of compromise. Also, the downside is this could hurt any housing recovery big time.
  • Social Security Reform – Orszag is big on this one and it’s real interesting stuff: Lift the $110,000 cap on payroll taxes. He says Democrats will leap at the chance to make Social Security solvent without private accounts. And, this one’s stable ‘cause it can be done in an orderly manner over several years. Again, he’s big on a plan that can’t be reversed and phases in over time. That means everybody knows what’s coming and has time to plan for it.

O’course, we can always kick the can down da road again like Obama did last term.  Orszag don’t raise this issue ’cause it ain’t a permanent fix.  We got a looming debt crisis and it’s only getting a whole lot worse.  

Optimism

Orszag sees some good coming in spite of all this suffering:

  • He sees shale gas and shale oil and a pipeline from North Dakota to Texas because there’s no way around it. So oil prices will eventually plummet.
  • He seems to like the way healthcare is headed because he likes defined contribution and national healthcare. Well, I figure ya gotta make allowances for people’s opinions.
  • He says there’s a lot more to come from the tech revolution.

At least that last one’s for sure.  I hope them bums figure this mess out before New Years Day.  And thanks Ethan for the great invite.  This was worth da trip.

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GO TO – THE FISCAL CLIFF – A SURPRISINGLY SIMPLE STORY

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Find Chicago Venture Magazine at www.ChicagoVentureMagazine.com Comments and re-posts in full or in part accompanied by attribution and a web link are welcomed and encouraged. This is not investment advice.  I do not guarantee accuracy.   It’s not my fault if you lose money.

.Copyright © 2012 John Jonelis – All Rights Reserved

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3 Comments

Filed under Chicago Council on Global Affairs, Chicago Venture Magazine, CORE Insight Story, Economics, Entrepreneurship and Politics, Fiscal Policy, Innovation and Culture, Taxes

THE FISCAL CLIFF – A SURPRISINGLY SIMPLE STORY

Federal Reserve Bank of Chicago

I’m at the Federal Reserve Bank of Chicago to try and understand the ecomomic situation in the good old USA. I’m here at the invitation of Northwestern University and grateful for the opportunity. Since the topic is economics, I’ll translate it into everyday language and reduce it to the points that impact you and me.

I step off the elevator into a huge crowd of well-heeled CEOs and bankers—all fellow Northwestern Grads. There must be 300 people here, eating, drinking, making a ruckus. I meet so many people, I can’t remember a single one of them. Since they’re drinking wine in huge goblets, I figure they won’t remember me either. I find a seat in back and stretch my neck to see the podium.

I’m in for a treat. Morton (Morty) Schapiro PhD, president of Northwestern University is a lively and witty–an entertaining speaker. And what about economist-speak?  He does most of the translating for me.  The crowd sits in silent attention except when laughing at one of his jokes. He’s a professor in Microeconomics at Kellogg and he characterizes the field as a branch of psychology. Here’s the short version of his speech—the parts that hit home:

First, he gets introduced this way: “He’s purple, he’s short, and he’s here.” He points out that Chicago is what it is—a center for research and teaching. The Chicago Fed benefits from that. “Two of the top economics PhD programs are here,” he says, “Two of the best business schools are here.”

Then he tells us what we all know—this is an extremely severe recession. But what he’s interested in is its curve. The steep drop. TheFED Logo agonizingly slow recovery. Unusual. Very unusual. One might see him as a perplexed MD clucking his tongue and shaking his head while the patient dies.  He’s got my interest.

Yes, GDP is back to 2008 levels but that’s misleading. “Getting back to where we were isn’t the same as getting to where we would have been.” We’ve diverged from the long-term trend. “Compared to growth with no recession we’ve lost 10% or $1.5Trillion. If GDP had recovered to the long-term trend as is usually the case, it would be 10% higher than it is now. 1.5 Trillion dollars is a lot of money that could have paid for a lot of things. That’s what we lost as a result of this recession.”

No Inflation

“There is no sign of inflation,” he says. “Not anywhere.” He cites some studies:

1—The Private Market Forecast calls for 2% inflation. That just happens to be exactly the Fed’s target. So, Morty says, “Maybe these guys are crazy, Who else can we ask?” And it turns out that there are other predictors we can look to:
2—The 10-Year Note vs. the TIPS yield: TIPS are protected against inflation so this comparison tells a powerful story. The spread suggests 2% inflation. So the Market Itself is betting that inflation will be low. And I don’t like to bet against the market. Again Morty asks, “Are bond traders crazy, too? Let’s go ask somebody else.”
3—He cites the Survey of Professional Forecasters, who expect about 2% as well. “Is the world crazy? Let’s ask some ordinary people.”
4—There’s the Survey of Households. They come up with about 2%. We keep running into that same number.
So maybe inflation really isn’t a problem in our country. Maybe we really shouldn’t run out and buy gold after all.

Lots of Downside Risk – Little Upside

Morton Shapiro“This is not a normal recovery,” he says. “A recession’s rebound is usually as steep as its drop. We should be seeing a 14% growth rate, not a 2% rate.” Turns out there’s a reason. This is a financial crisis, not a normal recession like an oil shock. Historically, after a financial crisis, employment recovers very slowly. Even so, the Great Depression had a faster employment recovery than this recession does.

What about the unemployment numbers? Aren’t things getting better? As we all know, it’s hard to measure how many people are out of work. Some have reached the end of their unemployment benefits. Some have given up. Some are under-employed.

Turns out, it’s a lot easier to measure how many people actually have jobs—the Employment Rate. So, instead of focusing on the unemployment numbers, his tables and graphs zone-in on the Employment Rate—the simple counting of how many people actually have jobs at various times in history. This is a more accurate way to measure where we stand. The Employment Rate has dropped from 85% to 75% during this recession. Ten percent. Huge by historical standards and it hasn’t changed much since the crash. It hasn’t improved significantly in all this time. That matches the real world outside the Federal Reserve building—the world that you and I see every day.

Banks Aren’t Lending

Banks are in trouble and are running scared. Your credit rating and collateral has to be really good to get a banker off his duff. According to Morty, “If you don’t have assets, you have few options. You can’t say to some banker, ‘Hey, I’m going to Kellogg. Invest in me!’ That’s because indentured servitude is illegal. You can’t collateralize yourself. So how do you get a loan?” Well…you don’t. And business doesn’t thrive. And the recession grinds on.

The Fiscal Cliff

He points out the coming fiscal contraction. It’s huge but short-term. It occurs to me that it’s like a train wreck as opposed to a nuclear war, which would have longer-term ramifications. But in both cases, you’re dead. If our government fails to act we are slated for a massive “fiscal cliff.” The economy will contract even more—to the tune of $600B. A large part of this is tax cuts that will expire next year if we do nothing. Here’s roughly how that breaks down:

1—The Bush tax cuts will expire—that’s $166B out of the economy.
2—The payroll tax cut ends—another $125B.
3—The alternative min tax patch ends—another $119B
4—The dividend tax rate will return to 35%. So talk to your investment advisor about the value of dividend-yielding investments.
5—The health care act, inheritance tax, and other smaller factors bring it up to a total of $494B in Federal tax increase. (That doesn’t take into account the effect it will have on State taxes, many of which are tied to your Federal tax.)
6—Then he factors-in spending cuts: Defense—$50B. Non-defense—$50B. Morty sarcastically points out, “…the characteristic precision of government numbers.”

That adds up to about a $600B in economic contraction—a drag on GDP of 3.8%. What does that mean to us? We won’t grow by 2% like theMorton Shapiro forecasters say. No, nothing like that at all. Our growth will fall by at least -1.8% and probably as much as -3.2%. So forget what you hear from politicians and the news media. The country’s about to slow way down.

What can we do about it? Well, obviously take action before we go over the financial cliff. But to climb out of our long-term crisis, cut the big-ticket items. Entitlements. People are gonna love that option.

Takeaways

I’ll list the important takeways from his speech:

1—The downside risks loom large. Little upside in sight.
2–Don’t expect inflation. There’s no sign of it.  To make that personal, he says, “Don’t expect housing prices to rebound to pre-recession levels. They are where they belong.”  But he doesn’t hold out any hope for healtcare costs to improve.  “There’s no evidence that the Obama’s healthcare program will cause healthcare to be more efficient. No evidence whatsoever.”
3—”This isn’t a normal recession,” he says, “It’s a financial crisis.”  Then he points out that employment dropped 10% and it’s still near that level.  “Recovery is slower than the Great Depression.”
4–Solution: He warns that we need to take action before we drive off the Fiscal Cliff and suffer a 600B burning wreck. We have to hit the brakes right now.  Will we?  I wonder.
5—Solution: A 10% value-added tax (a sales tax) might solve the short-term problem, “But,” he says, “You can only do it once.”
6—Solution:  He suggests that, “A short-term stimulus might be beneficial.”  But only if the long-term problems are addressed.  And we know that nobody really wants to address those.
7—Solution:  Turns out his answer is simple, but it hurts: “The real long-term crisis at home is the ratio of US debt due to entitlement spending,” he says.  “You gotta cut medicare.”

That makes me shudder. Not good news because I truly believe that these politicians will drive us off that cliff. But I ask myself – will it really be that bad?  Half the doom and gloom assumes that government spending is good for the economy – a notion that never made sense to me.  I think we’ll get to test that assumption in real time.

I brace myself for the next speakerThe topic will be Europe.

Contacts

Prof. Morton SchapiroPhD    email: nu-president@northwestern.edu

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GO TO – DEATH SPIRAL IN EUROPE

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Find Chicago Venture Magazine at www.ChicagoVentureMagazine.com Comments and re-posts are welcomed and encouraged. This is not investment advice – do your own due diligence. I cannot guarantee accuracy but I give you my best.

Copyright © 2012 John Jonelis – All Rights Reserved

10 Comments

Filed under Fed, Federal Reserve, Kellogg, Northwestern