Category: Economy

Greetings fellow readers, we have a new series here starring Johnnie Does, he will be passing on conversations he has with naïve people regarding real life issues in our society. There should be no shortage of content since well…the naïve and hypocritical are everywhere. Let’s start things off with 2 conversations over the past week.

First off “90-Day Calendar Guy”

90-Day Calendar Guy happens to own a small business. Recently, he and I went out to lunch at a burger joint right near my office.

Let me back up. William and I talk about the 90-day calendar quite a bit, but as a refresher, it relates to the stock market and companies being required to report their quarterly results every 90 days. After said results are reported, the company will fire/raise prices/lower quality so next quarter’s numbers are better, innovation goes out the window in exchange for continued short-term gain. I call this local business owner “90-Day Calendar Guy” because he consumes at least 6 hours of CNBC, Fox Business, or Wall Street Journal daily! If anyone knows about earnings, the market etc. it’s him.

Now back to my lunch story…To set the scene, this restaurant is a quick service place, so you order at the counter, the menu is limited and your food comes out in about 10 minutes to your table. This place has 1 person work the till, 1 person to get the food to the table, and about 3 cooks in the kitchen. Our visit was during the lunch hour and there was a substantial line forming; we were about 7th in line. The line moved at a glacial pace. My colleague lost his cool, he started calling out to have the cooks come out and take orders….something they may not know/be able to do with our arcane food preparation laws. He proceeded to complain to the manager, because, well even though he owns the business and lunch hour could be extended at his whim, that wasn’t good enough for him. Our food came out later, we ate and headed back to the office. The entire time he could not believe what he just saw, saying they need to hire more staff or get a competent manager, I disagreed.

He could not believe my opposition to his ideas, so I hit him with knowledge that essentially ended it. I told him this is the 90-day calendar my friend and welcome to the real world. You love it when the numbers are good and when the numbers are bad you cheer cost cuts/layoffs, you cannot have it both ways!

Commentary

Here is the problem. You have a guy who feels he is more important than everyone else in the room. He must be under the impression that this small business operates similar to a Wal-Mart where you open another aisle if more than 2 carts are in line.

As far as his comments about getting the cook out of the kitchen, you obviously know very little about food safety laws, or maybe you just don’t care? Read some of the laws regarding handling ready to eat food, then touching a cash till or handling customer’s money, your head will spin. The fines are insane, and shutting down your restaurant on both a permanent or temporary basis are very much in play if you violate these laws. Don’t believe me, go to a Subway or any sandwich shop, you will see different people making sandwiches with a designated person working the register. As far as hiring more workers, he should know better, especially since “every penny counts during earnings!” When it comes to hiring staff, you must staff for the entire day, you simply cannot tell a worker to check in at 11:30 leave at 1:30, then see you back here at 4:30 and stick around till 7:00, this is not viable…maybe he thinks it is? Sure sounds like it. Good luck finding someone willing to work that schedule. Staffing is done, knowing full well between lunch and dinner hour that things will be backed up more than usual but he will be adequately staffed for the non-peak hours.

Simply put he doesn’t practice what he preaches or maybe just lacks any ability to understand basic economies of scale? Bottom line? He just flat lacks common sense. Oh by the way, later in the work day he remarked about a company in which he invested because they didn’t make their quarterly numbers and he wanted to see layoffs as the answer……you can’t make this up folks.

Next up: “Punish Them, Don’t Punish Me” guy

One of my customers–I’m an insurance agent–happened to be the unfortunate victim of a rear end accident causing about $1,500 damage to his car; no injuries, accident not at fault, no harm to rates. Keep in mind he was not out of pocket $1 as the other company accepted liability and paid the damages. Then he basically turned psychotic, and I mean that in the most honest way possible, he went off on me saying we needed to take her license away, keep in mind we weren’t the insurance company to pay out on this. Not satisfied with his answer he went all the way up to the office of the president, still not getting his desired outcome. Who does this guy think he is? By the way, he is not a member of law enforcement, or any branch of government who could demand action, this guy pushes paper at the lowest level for the state! This should scare almost anyone reading this.

To make matters far more interesting, he was involved in another accident 2 months later, him being at fault, in an accident causing injuries to another party. By the time it is settled, this accident will cost more than $20k when it’s all said and done.

Funny thing is he came in worried about his future rates. I said it won’t be as bad as he thought, but I said thankfully we have a policy of not revoking people’s drivers licenses over just 1 accident. He looked at me dumbfounded, then bestowed some of his “wisdom” on me yet again. Saying he shouldn’t lose his license because it was merely an accident….sounds similar to the person who hit him, am I right? He went on to say it would be a violation of his basic human rights…where is that in the constitution? Then he said, “I work for the State therefore I cannot lose my driver’s license.” I guess a class C License is required to push paper now? This guy really was something else to interact with.

Commentary

What did this guy really think he was trying to do? If you have an IQ north of room temperature, you have to know that an insurance company has no power to take away your driver’s license, we can cancel a policy, but we have to let the State know what that criteria is far before any action is taken. In addition, if you did take someone’s driver’s license away what makes you think they would obey that order? It is a common occurrence in Elk Grove to read the crime blotter and hear about someone being arrested for driving on a suspended/revoked license! The reality is people need a way to get to their work/school etc. now you want to take this away over 1 small transgression viewed as a civil matter? Again notice I said civil not criminal! Not to be outdone, when you committed the same infraction, you wanted to be exempt from your own consequences? How rich is that? Then he pulls the card that he works for the state? Like that somehow makes him someone who is above the law? DAFUQ?????

Final Thoughts:

Both of these gentlemen are over 50 years old, which makes them old enough to know better. These conversations while possibly funny, are downright disturbing. Both of these guys claim my generation, I’m 33, are destroying this country….funny thing is I can only think of a handful of Congressmen and maybe a few local elected officials that are my age, most are over the age of 50, even more are 60 plus.

Truth is, these are two of the worst offenders. One wants to hire more workers, pay them benefits, and play God in regards to their schedules when it suits management, yet terminate their employment when it effects the bottom line? The other says punish people by revoking their driver’s license, yet when he commits the same offense he is somehow pardoned?
I’m sorry I thought this was America? I guess this is just the land of the controlled and home of the Whopper? Worse yet, both of these men claim to be Republicans, and both claim they voted for Trump, yet I guess they have beliefs that are selectively applied? Both used to tell me the most dangerous place in America is between Sen Chuck Schumer and a camera, I disagree, I think it’s when these two morons are allowed to speak their supposed “beliefs.”

They claim to care about our country’s future, yet by their actions it is clear that they could care less. They have no problem knowing that their present lifestyle is subsidized by future generations; such selfishness by the “Baby Boom” generation is a frightening legacy. Sadly both have reproduced so we will be subjected to many more people who have similar inclinations of entitlement in the future.

While it will not be official until January 29th, Today PG&E announced their intention to file chapter 11 bankruptcy so they can reorganize and become an efficient company again. I say it became official today because PG&E did not pay the interest on a bond obligation due 1/15/19. Even worse the company only has enough cash to cover 4% of their fire related obligations, due to their negligence. Chapter 11 is not liquidation, its reorganization. If you’re a stockholder you will be wiped out, a bondholder, you will see pennies on the dollar for your “investment” and if you’re an employee your paycheck and retirement may be effected slightly. However the company will be lent money by investment banks, so your power and gas will still be operational, and rest assured a monthly bill will still show up.

How did we arrive to this fateful day? Well the fires are the easy answer, and as mentioned in an earlier blog SoCal Edison is not far behind. Utilities as a whole are debt laden companies due to the extensive capital expenditures that are supposed to be occurring every year (more on this later) and are 100% reliant on the Public Utility Commission to allow them to raise rates to cover expenses. The fires occurred, they had no reserves and as a result had no cash to make the payment on the bonds.

What is the fallout going to be from this you may ask? As mentioned above your service will not change or be disrupted. Stockholders are wiped out, bond holders get some scraps from the table, and pensions are likely going to be restructured. CEO Geisha Williams was “axed” the question on Sunday and she chose to resign instead…don’t feel bad for her she gets a nice parting gift of 2.5 million severance. (Had she worked for a governmental agency in Elk Grove, she would have got lifetime medical benefits for being fired, too.) I need to find one of these jobs were apparently incompetence is rewarded.

Geisha spent a whole two years on the job by the way, thank god she wasn’t a teacher, she would have tenure right now and you couldn’t get rid of her if you tried.

What is going to happen during bankruptcy? This is where things get very interesting, as I could see many different scenarios taking place. I think the most likely is a systematic parting out of the company over the course of several years while under state receivership. You could make an argument it should be broken up into a northern, coastal and inland utility. However I can see a big hang up, the infrastructure. A man in my office made a comment that the company owns quite a bit in valuable assets; this is somewhat true but mostly very false. True they own their headquarters in San Francisco, which is obviously worth quite a bit, but they are going to sell it to stave off creditors. As far as other assets, one mentioned by said man in my office was their wire line assets….really? I view those as a massive liability waiting to spark another fire. Ditto for their generators and transformer units, especially with their maintenance history as a company. Simply stated, buyer beware with these “assets” even if I got a sharp discount I wouldn’t touch them with a 100 foot insulated pole.

The aftermath with the bondholders could get very interesting though. CalPERS our state retirement system has not said how much in bonds they hold. Could the state bail them out just to keep CalPERS solvent? Could we see a state owned utility? Stay tuned! This is going to get messy.

Oh, the stock is down to around $6 a share, and don’t worry; they halted trading this morning, so you were unable to sell your shares, but retirement funds, institutional investors and those in the know were still able to bail out.

Happy trails PG&E, I hardly knew ya.

If you thought the only EU news today was that the United Kingdom failed to move forward on their Brexit plan, keep reading. Here’s another reason to get away from the political quagmire overseen by Germany and France known as the European Union.

An EU judge today ruled that McDonald’s can no long call one of their hamburgers a “Big Mac”. Yep, the largest food chain on the planet which has legally owned the trademark in the EU since 1996 lost the case to an Irish fast food place called Supermac.

The lawsuit was a result of building tensions between McDonald’s and Supermac’s, after McDonald’s attempted to stop Supermac’s from expanding their chain throughout the EU. McDonald’s argued that the name Supermac’s would confuse customer’s with McDonald’s iconic Big Mac burger.
Supermac’s referred to McDonald’s legal tactics as “trademark bullying; registering brand names which are simply stored away in a war chest to use against future competitors.”
The judgment in favor of Supermac’s, which was handed down by the European Union Intellectual Property Office, ruled that McDonald’s was not putting the Big Mac trademark to “genuine use.” To make genuine use of a trademark, a company must utilize it to “guarantee the identity of the origin goods.” Evidently, the EUIPO didn’t feel that naming a burger the Big Mac was sufficient evidence that McDonald’s was making genuine use of their trademark.
In an interesting twist, the legal decision also reportedly gives Supermac’s the right to use the Big Mac trademark on any of their own food items.

McDonald’s loses ‘Big Mac’ trademark battle to Irish fast food chain Supermac’s

Nothing is more American than a Big Mac, heck Trump just served them in the White House.

Trump serves burgers, fries and pizza to college football champions Clemson

This is clearly a thinly veiled attack on our way of life.

An old pastor once told me that the word “mortgage” is from two Latin words; “mort” meaning death like in mortuary and “gage” meaning grip, thus a mortgage was a “death grip”. This is what I thought of when I say this headline today:

1 in 5 millennials with debt expect to die without ever paying it off

The average millennial (aged 18 to 34) had about $32,000 in personal debt, excluding home mortgages, last year, according to Northwestern Mutual’s 2018 Planning & Progress Study. That debt can feel both crushing — and endless.
Just over 60 percent of millennials (classified here as those aged 18-37) with debt don’t know when, or if, they’ll ever be able to pay off what they owe, according to a new CreditCards.com report. That includes roughly 42 percent of millennials who don’t know when they’ll be able to wipe out their debt, and almost 20 percent of those who expect to die in debt.

Expecting to die with debt is not a formula or mindset for success. No wonder so many say they prefer socialism. This blog is about hope for the hopeless.

The above article, without attribution, then proceeds to list several of Dave Ramsey’s “baby steps” for getting out of debt. Ramsey has 7 steps to getting out of debt.
1 Save $1,000 to start an emergency Fund
2 Payoff all debt (except mortgage) using debt snowball
3 save 3-6 months of expenses
4 invest 15% in retirement
5 save for child’s college fund
6 pay off your home
7 Build wealth and give

Dave Ramsey–Baby Steps

I can attest that following Ramsey’s advice will put you on the path to financial freedom. The cornerstone of his plan is the Emergency Fund. By putting this money away, you have a pool of cash to use for car repairs, new tires, fixing the dishwasher, unplugging the drain, or whatever else life throws at you without reaching for the “magic plastic”.

As you are saving this Emergency Fund, Ramsey asks people to cut-up their credit cards and use their Emergency Fund instead. Then replenish the money so you keep the fund available.

If you are married, it is vital that both of you agree on this course of action. Deciding to get out of debt must be a joint decision. You must be working together and not be unequally yoked to this idea. Nothing is more divisive in a marriage than fighting about money. To get both of you on the same page with getting debt free, Ramsey has classes that he offers called Financial Peace University. The cost of materials is about $100 but worth it.

My wife and I attended the Financial Peace classes at a local church about five years ago. I didn’t really know what to expect but found the classes helpful. The classes are held over several weeks. Part of the class is viewing Ramsey and some others, often his daughter, via a DVD presentation. The class facilitators also do various exercises with those attending, many of these are as groups. When we attended, there were eight or nine families. Any worksheets involving money are anonymous although those leading the group many have an idea who wrote which numbers.

The exercise that really got my attention was the one at the beginning where everybody listed their debts and then turned the number into the facilitators. This is part of a before v after comparison designed to show progress towards the baby steps of establishing an Emergency Fund and starting to pay off debt via a “snowball”. It was shocking when the total debt in the room was announced—remember this figure did not count anything owed on a home. Over half of the debt in the room belonged to me and my wife! It was a sobering moment.

Since that night we have paid-off over $100,000 of that original debt and the remaining balance will be gone before the end of 2019. Truthfully, we don’t stick with the snowball as religiously as we could. We still allow for vacations and a few wants. We are honest enough to distinguish between “wants” and “needs”; however, we always pay cash.

A word of caution, when you start cancelling credit cards, the offers begin pouring into your mailbox. Ramsey is a big advocate of going “cold turkey” on the plastic. Cut it up, throw it away, and never look back. Your dealers, Wells Fargo, Citibank, Discover, Golden 1, Chase, Amazon, Costco, etc., will really miss their 24 percent payment each month and offer you even more debt to come back.

I think of it as free drugs from the dealer just to get you hooked again. Two percent cash back is still 22 percent to the dealer so exactly how is that a bargain? Buy the heroine and get free needles? Oops, not blogging about San Francisco today.

Anyway, if you are up to your eyeballs in debt, there really is hope and a support network should you need it. Yes, your lifestyle may change as you learn to live within your means but freedom has always had a price. The only thing better than being debt free is teaching your children to learn from your mistakes and showing them a better way.

Since starting down this path, we are optimistic about our future. How many of you still paying for DirecTV so you can watch Fox News and CNN can say the same?

Editor’s Note: Johnnie Does is an irregular feature on this blog. Whenever Johnnie has a bone to pick with someone or something and just has to vent by writing about it, he sends it my way. Today, Johnnie presents a food review of a recent lunch at a Dickey-less BBQ establishment.

About a month ago, the Dickey’s BBQ in Elk Grove suddenly closed. It was strange. They were overpriced but the food was generally decent.  I frequented the joint about 4 times a year.  Truth be told—like any BBQ joint–it all comes down to how much people like your cue’ sauces.  There are many different styles of BBQ and I’m not here to educate…so let’s get to the food!

I learned that the old Dickey’s was re-opening as a “Side Burn BBQ and Brew.” This was intriguing; I thought a new independent store was opening.  I found out upon my arrival that the local Dickey’s franchisee Jared (omitting his last name) closed all 7 of his local stores (none were Subways) and started his own brand!  Good for him!

I entered the venue and found it to be basically the same as the old Dickey’s. The only changes I noticed; no more ice cream machine, and all the references to Dickey’s were removed.  Besides a fresh coat of paint and a menu board with a few changes, not much was noticeable in the differences department.  The menu, however, was noticeably dissimilar with many new meat items added and sides as well, but the old Dickey’s concept was present overall; the board, large baked potatoes, meat plate combos, pre-selected meat sandwich combos, etc.   The prices were similar or maybe even higher than the old Dickey’s…I found this odd; especially since the article I read about the re-launch stated that the change was due in part because the franchisee wasn’t making much $$$ as a Dickey’s owner.  They serve BBQ burritos…odd, and only do tri-tip on Tuesdays, and beef ribs only on Saturdays.  I don’t understand the burrito thing; I really don’t get limited choices available only on certain days.  I get it when a store does a daily special or deal of the day, but limiting a menu item to one day a week seems misplaced.  What if someone raved about the tri-tip, and on Friday night I swing by your joint and am told you only serve it once a week?

They are going with the new trend among younger people with the whole “locally sourced thing.”  I think it’s a mistake, when people go to a BBQ joint I don’t think they care if their chicken is from a Vietnamese market in South Sacramento or one from MacLean, Virginia.  They probably also don’t care if it was raised anti-biotic free or not.  I am calling BS on a couple of these “local companies” Harris Ranch does their beef products; they are from Bakersfield, almost 6 hours away.  I don’t call that local to the Sacramento area.  The chicken is from Petaluma, so I’ll give that t them, but I don’t get the anti-biotic free and free ranged raised thing.  The pork is from Smithfield Farms…yes the company owned by the Chinese and based in Virginia.  Not local, also I know a local rancher who basically said they are bottom line in terms of quality.  Max’s Bakery does their bread, they have a bakery in Fresno, but I don’t really care who bakes my bread, I’m fine with a roll from the local grocer or Sysco truck.  Mi Rancho makes their tortilla’s, they are opening a factory in Elk Grove, doesn’t get more local then that!   But how many burritos is a BBQ joint serving up?  Silva Sausages are local, however they are very bottom end, Safeway will sell me a 4 pack of sausages, not on sale mind you for $4.  Color me unimpressed.

I went with the pork sandwich with coleslaw, when asked if I wanted to add two sides for $5 extra I balked, the total ticket would have been over $12.  My sando…I guess that hipster for sandwich was $6.50.  My counterpart in the office ordered a two item plate, which came with two sides and cornbread or a roll for $13.  He chose jalapeno jack sausage and brisket.  Apparently they serve two kinds of brisket, juicy or dry, he chose juicy.  For his sides he chose hatch mac and cheese, and red skinned mashed potatoes.

The concept is set up the same as Dickey’s; similar to a Chipotle except we had to order and pay first.  Only one other person was in the store. We wanted to watch our food being assembled but we were shooed away which was interesting considering there are low counters conducive to being able to watch the sausage being made, pardon the pun.  Our food arrived, we both looked disgusted….this was like being told you’re getting a filet mignon and out comes a Salisbury steak.  My sando was a burger bun, no more than 4 oz of pulled pork, two Vlassic pickle slices and one red onion circle.

Notice the word circle not slab.  I took one bite and immediately ran to the BBQ sauce and doused it.  The meat was so bland and flavorless!

My counterpart’s dish was no better.  His brisket was dry, and again in bad need of sauce, his sausage was a bigger joke, he got about 4 slices of sausage, cut diagonally to appear like a larger serving.  The mashed potatoes were out of a box, guaranteed, no way those aren’t instant mashed potatoes found at your local hospital or retirement home.  The mac and cheese was a bigger joke, it was Kraft for certain with a couple hatch chili shavings in it.  His cornbread…well we don’t know because a roll came out instead.

Overall, without a doubt average BBQ, average setting playing pop music as opposed to country or western music.  Prices way too high, and in general I was so unimpressed.  It was only day two since they opened but as stated earlier only 1 other patron was in the store at 12:30, not a good sign for high lunch hour.

Best of luck, but I have a feelin’ ya’ll be closin’ soon,

Johnnie Does