GLOBAL LEPRECHAUNS post 10

Hi,

It's March madness so what better time to explore GLOBAL WARMING (speculation that the earth's temperature is in a state of fever which is likely to continue unless treated by a change in man's actions and attitudes) or more technically "potential changes associated with increasing atmospheric greenhouse gases". The theory has many ramifications. In other words the LEPRECHAUNS are at it again!

It is hard to have an opinion on anything these days without the accusation of "You're being political", not to say that GLOBAL WARMING isn't political by its very theoretical "nature" (excuse the play on words).

But try to see the sense I am trying to make out of the GLOBAL controversy in order for us to make reasoned judgements. If I am moved to make a Political statement, I'll announce it. After all, I'm not a politician. I don't have to play the fool.

The theories of climate change have been called a hard science which means they can be proven by fact. Unfortunately, this category does not really seem to fit. The errors made by environmental mathematical theories have been astounding. Like much of our exploration of nature's patterns, this has been more of a social science than a hard science. Maybe we need another classification like: semi-hard science.

Or call in COLIN, the LEPRECHAUN to reclassify it but not on St. Patric's Day. He's in a parade. He is my main Leprechaun in "Leprechaun Lucht")> The title means Leprechaun folk.

Man's (Man is the generic approach and doesn't preclude women, children or pets so it is POLITELY CORRECT - yes, I meant polite) I repeat man's approach to nature is an EGOTISTICAL one. No matter how much proof is given by the random acts of nature, man is certain he can sort them out, create a pattern, and stop the random acts or regulate them. YEAH!!!!????

Let's see. Some years back SEEDING HURRICANES was going to be able to stop or redirect them. Whatever happened to that?????????? in the 1940's DDT was touted as the greatest proof against nature's problems. Whatever happened to that??????????? Oh yeah, I remember, they're saying now after 500,000 deaths from mosquito born diseases, they may have been right before they banned it!......... Redirecting water's flow was boasted as a deterrent to drought by the civil engineers. Whatever happened to that??????? There's a hell of a lot about nature that we don't know and we do a lot of ASS U ME ing. (Ye old definition for assumption).

The point: GLOBAL WARMING IS ANOTHER THEORY CALLED HARD SCIENCE but all the debate has placed it in the Social Sciences because there's a real lack of hard facts and a lot of theory which may be right or wrong. (ya think??)

When faced with unexpected or unknown elements in nature, is it possible that man's ego simply goes ballistic and he dons the armor of war??

GLOBAL WARMING involves financially driven Economics since millions are already being invested and businesses formed (some big ones by Al Gore) to take advantage of the huge profits expected to be involved. I have no problem with private enterprise using the concept for profit but before I buy shares (through my tax money and Government involvement)in GLOBAL WARMING enterprises, I'd like to have some HARD FACTS.

To begin: Scientist agree that we live in an ENORMOUSLY COMPLEX CLIMATE SYSTEM. A system, by the way,in which our scientists acknowledge ignorance. The Experts' ignorance only exceeds ours by a small amount! The recent Hawaiian tsunami warnings about a non-event underline the experts' error margins.

That ignorance (remember: ignorance is not stupidity-just lack of knowledge) causes some Scientists to bluster about their beliefs and say we are in a long-term warming trend, occasionally interrupted by cooling: GLOBAL WARMING.

Other scientists bluster that we are in a 30-year cooling trend (yeah--this year sure felt like it) and that the warming that began in 1977 is over. GLOBAL COOLING.

Both sides use projected statistical temperatures to prove their view. Not really hard facts either way.

Our version of government weather scientists, NOAA (National Oceanic and Atmospheric Association), strongly disagree with any discussion that does not promote the change in CO2 levels. NOAA accepts completely the EGOCENTRIC (We're just so darn important that nature must bend to our faults) theory ON ECOLOGY making MAN the culprit!

Okay we're MIGHTY MANand nature is just helpless nature.(Right??......have you seen a weed completely die from the cold, draught or heat????? If they diminish at all, they come back when the weather improves?)

Why don't we just work on adjusting CO2 (carbon dioxide levels) levels without a debate over the warming or cooling of the climate? Seems like a worthy cause and then we don't have to speculate (in the gambling mode again) on who is right and wrong. Change will be costly for business and consumer (we've had a few lessons in change in recent years) but job creating companies can provide new and imaginative alternatives for the altered products.

Unfortunately, that simple answer does not create a new Industry based on the weather. Since weather is seen as a new frontier that we haven't even come close to conquering, why not let our entrepreneurs tackle the business. If we must expand to a war on nature to salve our fears and egos, let the money men tackle it. Folks like Al Gore, who got a Noble Prize for issuing dire speculative warnings about GLOBAL WARMING, should reap the rewards of his theories. In the course of so doing, he'll probably do a lot of good as well as a lot of harm.

Finding so little hard information and so much debate and speculation, I'm at a loss to offer much more clarification. No matter how much you hear about everyone agreeing on GLOBAL WARMING, there continues to be debate in the Scientific Community.

Roger A. Pielke, Jr. in an article for the Center for Science at Columbia University, likened the debate to CASSANDRAS warning of "impending doom" and DOROTHYS "exposing the great uncertainty" in the scientific models. He said both sides are given to excesses and taking moral positions. And he declares:

"From the standpoint of science, however, the debate is a draw.

We have learned much more about climate over the past decade, but arguably we are no closer to gleaning the future state of the climate. The relationship between human activities, the Atmosphere, and indeed the global environment is much more complicated than scientists had thought.....accurate predictions of future climate--decades or more hence--remain out of reach." Mr. Pielke predicts "the debate will rage on" because our "environment is vulnerable" for myriad reasons beyond CO2 emissions.

GLOBAL LEPRECHAUNS ARE AT WORK!!!

I'll only make one recommendation in light of the debate by Scientists and if this seems political after all I have written. Sorry!!!!

My Dad always advised me "WHEN IN DOUBT, DON'T!!!!" It's stood me in good stead over the years.
Cheers, Connie

HOW'S THE HEDGE GROWING? POST 9

HI,

We're not quite done with the various items that are getting attention in the news of recent ECONOMICS.

The careful readers will come across what is called a NAKED SHORT SALE (No, the broker did not get that way). Guess what?? Right! No borrowed stock. (Nada-nothing invested). That means the seller invests NOTHING but a PROMISE (HYPOTHECATED SHARE) to sell in 3 days (T+3). The seller makes a short sale and receives a split dividend on a promise( not like marriage-no divorces allowed or it becomes fraud). This has become ILLEGAL except under limited circumstances by MARKET MAKERS (remember them).

Investment companies like HEDGE FUNDS have used short sales extensively. (not necessarily NAKED SHORT SALES)-although some may have worked through the Market Makers).

HEDGE FUNDS?????? Has the market gone another shade of green?? Nope! HEDGE FUNDS denote a LIMITED INVESTMENT FUND with allowed aggressive strategies unavailable to MUTUAL FUNDS especially SHORT SALES. HEDGE funds make large bets on market movements using borrowed money to substantially leverage (expand) their returns. The losses can be huge at ten to one odds. (BACK TO OUR LESSON IN LAS VEGAS).

Not a transaction for the small investor. The various HEDGE funds use a wide variety of strategies and set themselves up as INVESTMENT COMPANIES (a company primarily engaged "in the business of investing, reinvesting or trading in securities"

There are a variety of Investment Companies. MUTUAL FUNDS are familiar: OPEN END -has unlimited redeemable public shares; CLOSED END- a fixed number of non-redeemable shares; INTERVAL FUNDS- have periodic repurchase offers at net asset value; business development companies (BDC)--closed-end funds with investment in small and developing or troubled businesses; ETF (exchange traded funds)--tracks the included stocks by index performance; UNIT INVESTMENT--no officer structure and an almost fixed portfolio of stocks; FACE-AMOUNT CERTIFICATE-issues face-amount installment certificates(only a few of these). All the Investment Companies are designed to make the most profit for investors.

HEDGE FUNDS, although Investment Companies, do not have to register with or report to the SEC, a condition that is changing since the downturn. Each HEDGE FUND has less than one hundred qualified, wealthy, and sophisticated shareholders and has no public offering.

Why is the public interested in these investments? HEDGE FUNDS are "betting the farm" with (among other things) PENSION FUNDS (or retirement funds).Hedge Funds aim at high-risk, large returns. The odds are calculated at about ten to one with this type of investment practiced GLOBALLY as well as in the U.S.A. The Pension funds accumulated after a lifetime of work are at the front lines.

"So, ya think this is your lucky day, do ye Chump?"

Most state pensions in the U.S.A. were part of HEDGE FUNDS when the market collapsed. Many states were lucky that their HEDGE FUND leaders bet on the fact that the market would go down WHEN the short sale, bundled securities appeared in great numbers, and those Funds scored a big return. But the HEDGE FUNDS have shown massive losses in recent months thus putting pension funds at risk.

HEDGE funds are extremely controversial. Some Government officials blame them for the market drop. Others point out that larger profits in the Pension funds were needed to keep apace with the economy. I am "still out to lunch" on my opinion of the risk and the profit/loss ratio. However, across the globe HEDGE FUNDS are still active and the powerful seem to feel that they are needed in the markets. More on this part of the economy as it develops.

As we examine what goes into Economics, it becomes obvious that they were developed as a Social Science because the methods of finance, trade, and interaction have become so complicated and intertwined that explanations are often needed. The multiple opinions on the rightness and wrongness of a given action is often hotly debated.

As we explore Economics many issues such as NAKED SHORT SALES AND HEDGE FUNDS that seem to be inside the area of the stock market can also become a dating item in the Social Science of Economics explored by contesting viewpoints.

A social science is not a PROVEN science but rather an ASSUMED science. It is more often based on observation, historical data, statistical data, author bias, and a few hard, cold facts. It is THE EXPLANATION of WHY something is the way it is by someone who is considered an authority on the subject because of constant study. This Blog could be considered an ASSUMED SCIENCE IF I were considered an authority on the subject. (YEAH! RIGHT!) Notice the inherent dangers in the Social Sciences!

What does MY explanation of THE EXPLANATION reveal? That interpretation plays a huge role in this 'SO-CALLED SCIENCE".

Economics is valued for the clarity it often brings to a Cluttered Mess as well as its use of visual capabilities via graphs, drawings and photos. Its limitations rest in the fact that it is a very useful vehicle for distortion (both planned and unplanned).

The media picks up a myriad of authored articles in the Social Sciences and often reports them as fact. We see distortions in various aspects of society and its interaction with the environment, health, safety etc. The weather gets involved, when social science tries to show our expertise on nature. This information can be carried forward to become so "real" that the public accepts the assumption as fact. We'll see some of this as we continue.

Remember the old "saw" for assumptions! ? ASSUME makes an Ass out of U and ME.

We'll take a look at the Going GREEN debate in our next post. Although the environment is a part of the Physical Sciences (hard science-not about people),the ongoing debates over GLOBAL WARMING makes it a people issue. It now is also a part of Economics and our financial future.
Cheers, Connie

FOO DOG ECONOMICS Post 8

Hi,

FOO DOG ECONOMICS is an appropriate title considering how much the United States now owes China. If we DEFAULT (don't pay up) our loans, we may wind up replacing our national symbol, the Eagle, with Chinese Foo Dogs.

Our simple definition of Economics covers a multitude of sins.

Let's SAY IT AGAIN: Economics is a SOCIAL SCIENCE that EXAMINES the PRODUCTION, DISTRIBUTION, AND CONSUMPTION OF GOODS AND SERVICES PLUS!!! THEIR MANAGEMENT!!!

NOTICE: It's a Social Science (how people do stuff) not a MATHEMATICAL SCIENCE. There are multiple definitions for Social Science.

For our purposes, Social Science studies society and human behavior including economics and draws on EMPIRICAL METHODS (observation or experiment) so it looks like real Science. That actually means lots of statistics, dam (dammed up) statistics, speculation and SOME facts can go into the various studies. A great margin of latitude like this can lead to tremendous error (as we shall observe as we continue) or brilliant hypothesis (theories).

The term MANAGEMENT in our ECONOMICS definition includes important seemingly extraneous matters like LOANS (dam loans and dammed up loans); REPAYMENT of loans (or putting them off--called DEFERMENT or (I HOPE THEY DON'T FORECLOSE THE LOAN).

Yeah mortgages are included in this category and since they are constantly in the news lately, let's take a gander at what's been going down at ye old lender's house.

Our primary lenders, the GOVERNMENT SPONSORED and partially privatized (beholden to Government ) FANNIE MAE (THE FEDERAL NATIONAL MORTGAGE ASSOCIATION) created by Franklin D. Roosevelt's New Deal, 1938) AND FREDDIE MAC(THE FEDERAL HOME LOAN MORTGAGE CORPORATION) created in 1970 to bundle mortgages( buy the mortgages on the secondary market, pool them and sell as mortgage-backed security. Freddie Mac is regulated by Government HUD not the SEC--bad news.) The BUNDLED SECURITIES (a bunch of risky mortgages) were not backed by insurance or guarantees from the government.

With the now available Government controlled Stock Market regulator FINRA on board, the Government had what was considered an almost perfect setup and did not foresee the disaster that would follow.

Some misinformed, well-meaning GOVERNMENT souls thought that it would be nice if there were a house with a stove for every person to cook the " chicken in every pot" that Franklin D. Roosevelt promised as his goal and Economic theme. It was destined to be a worthy cause gone very wrong.

Joined by various government misanthropes (hate humanity--especially the rich humanity), they reasoned that by giving a number of different loans at low beginning interest (set to rise at a given time) folks could move into a house for no down payment and nothing but the clothes on their backs and lots of legal papers they had signed. The grateful buyers did not look ahead or question the disaster that might occur under certain conditions.

This economic decision (risky loans) was based on almost always having good Economic times (that's like almost always having good weather). Another Economic study in future, no doubt.

Another fable:
Joe Blowhard is married, with several children, two incomes, scraping to make ends meet. They are renters. Joe B. goes to the local bank and fills out the papers for a loan for a home but can't qualify and doesn't have the down payment. He hears of a mortgage loan business that specializes in what they call "Government" loans.

Joe B just lost one of his part time jobs and his already inadequate income is further diminished. The mortgage lenders says, "No problem". (No problem usually means there's going to be a problem).The MORTGAGE MAN prepares a loan for the down payment, plus two additional loans; one for the mortgage and one for home improvement and sets A LOW interest rate that will RISE YEARLY for a number of years. "That way in good times", the banker tells Joe "your interest will go up along with your income." Joe didn't ask about bad times.

Joe B boasts to his friends that his monthly payment is about what his rent
totaled, he's not out any cash, he can move in right away, and he has extra money to spend however he likes.(?) He spends the home improvement money on things that are important to HIM: a new TV, a basketball court, a barbecue, and a new appliances like the ones on TV. There's nothing that says he has to fix the roof, the plumbing, and the wiring so they will have to wait.

Those who thought up this game were sure the interest rates on the several loans on a single property (in some cases three to five loans were given) would rise in due time and investors and buyers would be satisfied with profit so why mention risk?

This scenario was carried out with hundreds of thousands of home buyers, some much worse off financially than Joe. As always happens, there were those, not poor, who saw this as an opportunity to make money. They decided to get in on the action and started a process call FLIPPING (buying homes without CAPITAL and reselling them as soon as they showed a profit). Only this time it was mostly the middle class getting into the act.

The problems in this economic situation are myriad. First and foremost, bad times always seem to follow good times. People who do not have an investment of some kind in property (another study) do not take the care that "blood, sweat and tears" owners do. The buyers were IGNORANT (uninformed) and thought Government was taking care of them and didn't question their "good luck".

In addition since the loans were made in good times the properties became artificially inflated. If a house was given $300,000 in loans, it couldn't be put on the books as worth its actual value, $100,000. (what we used to call "cooking the books" or lying). So the house value went up. Good for the economy? Good for the loaners?? Good for the buyers???? Good for the neighbors??? Not likely.

Well Joe's friend, Sam the man, down the same street, pushed the worth of his nicer property to exceed Joe's house that was now claimed to be worth $300,000. When he wanted to sell his house, he listed the house at $400,000. Never mind that it was valued last year at $150,000 and built for $80,000.

These were GOOD TIMES!!! And so it went until as the old saying goes "The S--- hit the fan" or to say it more elegantly "the bubble broke", mortgage interest went up disastrously, folks lost their jobs, mortgages based on "thin air" (as old time bankers called it) were defaulted and many, many houses foreclosed.

Joe Blowhard and his family lost the house, sold their belongings, and are renting again. Joe's also out of work. Sam the man has seen his property because of the number of foreclosures in his neighborhood depreciate (GO DOWN) TO $100,000. instead of the $150,000 it was before he inflated it and it hasn't sold because of all the empty houses.

A fantasy created and dreams destroyed by those in charge not understanding REAL WORLD ECONOMICS.

What can we say of the folks who "engineered" this folly?? That they meant well! Many a disaster has been caused by people who mean well but are ignorant of what they set in motion. "Meaning well" is not high praise in most cases in my book.

Next we'll further cover the effect on the Stock market and the bundled securities that went belly up in the downturn of the market. Economists will write theory books for years about all this. I'll try to simplify it.

By the way, I am not shouting in these posts but attempting to emphasize terms that may be unfamiliar. I trust it's not too annoying.

Cheers, Connie

GOING PUBLIC & FINRA post #7

Hi,

"Up Yours" Corporation entered the SEC procedure with a required financial revenue background of OVER $25 million dollars during its last FISCAL year. A FISCAL year is based on when the Corporation's financial operations began. "UP YOURS" as a Corporation was a gleam in the owner's eye in September of 1999 but the baby was born in APRIL, 2000 so their FISCAL year is from APRIL TO MARCH. Our CEO has used the last ten years to build the Corporation to this point and the SEC approval is a triumph.

The "UP YOURS" CORPORATION is well on its way to GOING PUBLIC. The next hurdle is FINRA.

As you surmised, "UP YOURS' must complete an additional form for FINRA (FINANCIAL INDUSTRY REGULATORY AUTHORITY). FINRA is the non-government regulator of security firms in this country. However, unfortunately it is heavily influenced by the Government and that weakens its protective status. It is powerful and oversees about 700,000 registered securities (SEC APPROVED STOCKS and around 5000+ BROKERAGE FIRMS that are sales firms dedicated to the stock market).

A brokerage firm hires and trains STOCK BROKERS (who buy and sell stocks for clients and make recommendations) do other stock transactions, hang out and watch the STOCK MARKET'S TICKER TAPE record the changes in stock prices, and generally specialize in market study). This ticker tape (a real welcome addition in early technology) is now shown on TV (in a strip along the bottom of the screen on CNBC). Before technology, INVESTORS who bought stock watched a stockbroker's ticker tape machine to see their stock's current value. I had a father-in-law who after he gave up his seat on the market did so after he retired to Florida.

When NASD and FINRA consolidated into just FINRA in 2007, it became the sole agency dedicated to INVESTOR PROTECTION AND MARKET INTEGRITY. Heading off the 2008 crash was part of their job through efficient regulation and effective investor protection. They obviously flunked the course.

Regulation and compliance was FINRA'S job and they certainly did not protect buyers against the bundling of useless Government approved Fannie Mae and Freddie Mac badly managed mortgage loans that were then sold as securities. These two firms were made private by the Government but were still Government controlled when they "BUSTED" the MARKET wide open with their tactics of selling questionable mortgage loans and calling them SECURITIES.

Why didn't FINRA question these securities? Another factor is why Finra did not instruct Brokers to warn the less sophisticated buyers about SHORT SALES (sales that are made by BORROWING property (STOCK); SELLING THE BORROWED STOCK BUT promising to BUY IT BACK and DELIVERING THE STOCK BACK to the owner while pocketing the profit or absorbing the loss).

By the way this is Short selling in the Stock Market-not short sales in the real estate business.

The SHORT SALE LAW OF 1938 OR UPTICK LAW (must be conducted in an up market) was (ENACTED TO PROTECT BUYERS AFTER THE DEPRESSION) because it was blamed in large part for the DEPRESSION of 1932. That law was RESCINDED BY THE SEC in 2007 when the market was judged to be stable???????.

FINRA should be in touch with every part of the securities business. It writes and enforces the rules and FEDERAL SECURITIES laws. It is supposed to inform, educate, report, administrate and generally keep the securities buying public informed.

A powerful agency, FINRA is under contract to all the major exchanges which by the way are: NASDAQ (National Association of Securities Dealers Automated Quotation System) STOCK MARKET, AMERICAN STOCK EXCHANGE, INTERNATIONAL SECURITIES EXCHANGE AND CHICAGO CLIMATE EXCHANGE.

A FINRA finger in every stock pie! WHERE WERE THEY WHEN THEY WERE NEEDED??????? Perhaps FINRA has become too big BY CONSOLIDATION to do the job even with the help of technology.

The FINRA Form to be filed by Corporations GOING PUBLIC wants answers on the Corporation's methods and compliance in selling stock, including much of the same information given to the SEC, plus assurances of business validity and longevity including a shareholder list. FINRA is interested in whether the Corporation has a viable market for shares and will have enough shares to serve it (approximately 300-500,000 is the minimum) and how much concentration of stock is held by NON-AFFILIATED (not in the Corporation) stockholders.

There are firms called MARKET MAKERS and only they file the FINRA forms and deal with FINRA COMMENTS until the latter issues the ticker symbol (STOCK MARKET RUNNING LIST--all listings in the market are by symbols) The MARKET MAKER is also involved with regular buying and selling of at least 100 shares at publicly quoted prices. Big shares go to several MARKET MAKER firms.

A TRANSFER AGENT, regulated by the SEC, keeps a current list of stock holders in SEC REPORTING STOCKS and does the paper work on buy-sells. They also replace lost stock certificates at 3% of stock market value. A hefty sum for large trades.

Once "UP YOURS" Corporation receives SEC EFFECTIVE approval from FINRA, it has become an SEC REPORTING STOCK (regular reports must be made to the SEC) and ready for market. "UP YOURS' symbol is secured and the CEO has okayed the selling price at $20. per share based on the current ASSETS (cash, outstanding cash, physical assets, and projected income from Corporate projects, less outstanding debits).

For all practical purposes it is the last time the Corporation will have a say in the price of their stock. The buying and selling of shares by individuals THROUGH their BROKERS will determine the future rise or fall of shares.

By GOING PUBLIC "UP YOURS" Corporation BENEFITS by having access to new CAPITAL (money for the COST OF DOING BUSINESS and EXPANSION); its merchandise, "suppositories", may become more WIDELY SOLD; ACHIEVING EASIER FINANCING AND a READY MARKET for their shares; ACHIEVING GREATER ABILITY TO HIRE highly trained personnel BY GIVING stock options AS BONUSES (THERE'S THAT "B" WORD AGAIN); and INHERITING an IMPROVED IMAGE.

However, the added burdens on the CEO will be providing SHAREHOLDER INFORMATION; new LEGAL obligations including REPORTING to the SEC and the LIABILITY this may incur; a certain flexibility in CATERING to a NEW GROUP of shareholders (who can elect a different board and officers, and ultimately replace the CEO, CFO, and COO) if they desire different goals.

Okay, this has been a CRASH COURSE in explaining how the market is formed and some of how it works. If you want more information there's a lot on the Web under various STOCK MARKET LISTINGS. My next task is to tie some threads together.

The Stock Market ALONGSIDE small companies, PARTNERSHIPS AND SOLE PROPRIETORSHIPS are the very HEART OF CAPITALISM that produces more jobs than any system in the world. These businesses as well as the government affect Economics.

A clear and simple DEFINITION of ECONOMICS is: A SOCIAL SCIENCE THAT EXAMINES PRODUCTION, DISTRIBUTION, AND CONSUMPTION OF GOODS AND SERVICES PLUS THEIR MANAGEMENT.

Well no wonder it's such a mystery to most people. It's a BROAD FIELD that includes all we've covered plus. But we can CUT IT DOWN TO SIZE.

If you check into where the FOO DOGS (in the original garage sale) were made (PRODUCTION); where they were sold (then sold again-the garage sale),(DISTRIBUTION); what they were used for (CONSUMPTION); and how long the FOO DOGS lasted (MANAGEMENT).

YOU'VE COMMITTED ECONOMICS. SHAME ON YOU FOR BEING SO SMART!

How do Wall Street and Economics join forces? Well, you're so darn smart that you already know that most of the STOCK MARKET is in production one way or another. How does the Government fit into the mix. Easy, they're always MIXING THINGS UP IN A WAY THAT HAS TO BE DEFINED.

Our next post will cover some of the phrases used to explain the complex additions to the simplicity of ECONOMICS. Hope you got through this post! Not as much procedure from this point forward.

Cheers, Connie

GOING PUBLIC post six

Hello,

No, we're not "going public" like a certain golfer.

This is the term that is used for a CORPORATION becoming part of the STOCK MARKET and allowing PUBLIC TRADE of shares in the company, to be sold to anyone as STOCK so the CORPORATION can raise CAPITAL for EXPANSION. Unlike becoming a Corporation, it is a complex process so bear with me.

One of the first decisions the CEO (chief executive officer) makes when he thinks it is time to GO PUBLIC is to hire a MARKET KNOWLEDGEABLE CFO (chief financial officer) in addition to his COO (chief operating officer) because company finances are a big hurdle in the GOING PUBLIC PROCESS.

Then he and the CFO have to choose one of 3 methods of GOING PUBLIC (we'll only cover one here). They choose SELF UNDERWRITING (GO PUBLIC DIRECT). The other two methods are an IPO (INITIAL PUBLIC OFFERING) or a PUBLIC SHELL (Reverse merger). The latter 2 choices require much more funding than the "Up Yours" corporation has currently.

GOING PUBLIC DIRECT allows the company to file directly with the SEC (Securities and Trade Commission) a "SELLING STOCKHOLDER REGISTRATION STATEMENT" (Shares you have already sold) or a "DIRECT PUBLIC OFFERING" (DPO is for shares the Corporation PLANS to sell publicly).

The CEO (chief financial officer), CFO (chief financial officer), the COO (chief operations officer)and a team of attorneys confer and choose the DPO (direct public offering) and contact a FINRA broker (Financial Institution Regulatory Authority) who will file a form to secure their ticker symbol.

Mind you, having a knowledgeable team of professionals is necessary to clear an SEC (SECURITIES TRADE COMMISSION) filing in the GO PUBLIC DIRECT transaction. Although the SEC does not do merit reviews, it requires accurate company and financial disclosures. Properly handled, you will progress in attaining your goal in three to four months. The SEC by the way does not judge stocks as potential losers or winners--only that they are what they claim to be. In other words "a spade is a spade" but that doesn't mean being a spade will make it a winner or loser in a card game.

FINRA (Financial Institution Regulatory Authority) follows the SEC ruling with a review process to make sure that due diligence has been proved and shown. That's when it starts getting really complicated.

The CEO has the attorneys prepare a filing (an SEC REGISTRATION statement) which gives the "UP YOURS" CORPORATION what is called FREE TRADING STOCK and makes the CORPORATION a mandatory SEC REPORTING COMPANY. The filing will include "DUE DILIGENCE" questions for A DISCLOSURE that includes: background on all officers and directors; material contracts and agreements; a business management plan; and an Internet address for the Corporation's website. The finished form is filed with the SEC for review.

The attorneys and the CFO (chief financial officer) will also draft and file with the SEC a complex corporate financial statement. There is a final clarification step to explain any footnotes in a section of the filing draft called "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION" to explain variations and differing numbers in differing time periods.

The SEC has a filing system called EDGAR-"ization" the (ELECTRONIC DATA GATHERING, ANALYSIS AND RETRIEVAL SYSTEM),a monster software program to which the REGISTRATION STATEMENT has to be converted.

Once filed, it is reviewed by the SEC who focus on DISCLOSURE and financial statements being sure they meet the rules and regulations. The SEC does not block registrations BUT CAN DELAY them by 30 days at a time. After the SEC clears the filing, FINRA (FINANCIAL INDUSTRY REGULATORY AUTHORITY) requires another disclosure form. The "Up Yours" SEC process has been facilitated by experienced professionals so the filing should take about a month to complete and clear.

If the professional team goofed off (God forbid) somehow in the procedure, the SEC staff would issue a deficiency letter (COMMENT LETTER). The company would be required to file an amendment response addressing the issue(s). Another 30 days can produce another COMMENT--ad infinitum (Latin for a recurring pain in the "A double scribble". However, most problem filings clear after several more COMMENTS. It pays to do it right with the right staff to keep the process from slowing down. Thirty days for each deficiency can make the expected three to four month process extend unbearably.

DO YOU FEEL LUCKY, CHAMP? Right! The SEC has a REVIEW LOTTERY and can elect to not review your FILING and clear it in 15 days OR LESS! Count on your Las Vegas experience-the odds are against you!

The SEC before, during and after the Corporation's filing can be very touchy about what the CEO does. The SEC does not want to want the CEO blabbing publicly in advance no matter how excited he is about GOING PUBLIC. During what they call the QUIET PERIOD the CEO is not under a "gag order" exactly(?) and can answer UNSOLICITED questions by the the press. Beware the word: UNSOLICITED. It can be a CEO Snap trap by a rising upstart in the Corporation who calls the press to get the CEO to do an article.

The CEO is responsible, no matter who does the deed, and the SEC will stop the review process for as long as they DWP (damn well please) and no amount of tears will wash away their hurt feelings. How could you have betrayed them??? And unless you've got a long history of press releases well before the Corporation filed, the CEO needs to keep his PR (PUBLIC RELATIONS) staff on a short leash. The CEO can engage in "bedtime talking" during the QUIET PERIOD but LEGAL TALKING can lead to "trash talking" paraphrases in violation of your filing.

The CEO should probably take this SEC QUIET PERIOD to go on vacation to a FOREIGN destination since RAISING MONEY in the U.S.A. during the QUIET PERIOD is a major NO NO. The SEC says you only need enough money to get you through the process and says: "the filing of your REGISTRATION STATEMENT constitutes general advertising and solicitation and that private placements during the time your filing is PENDING are integrated with your public offering....."so raising money is off limits IN THIS COUNTRY during the review. The SEC has a real sensitivity bump on this.

However, if our CEO goes on vacation away from our shores and provides a PROSPECTUS (under certain SEC stringent rules) he can pitch his Corporation's shares. It's also very tricky if the CEO (OR INSIDERS) sell large portions of stock anywhere because investors will worry about creating selling pressure and driving the stock price down. The SEC has a point there!

Our CEO is worth his bonus. The SEC has accepted his filing without delay and in the next post we'll discuss how the Corporation handles FINRA (THE FINANCIAL INDUSTRY REGULATORY AUTHORITY), the largest non-government regulator (we still have ONE non-government body) for all securities firms in the USA. FINRA watches over approximately 5000 brokerage firms. Probably less now than before the 2008-10depression (or you may prefer the term recession if you've been dozing). By the way I think FINRA should be answering a lot more to Wall St. because it seems they were snoozing pretty heavily before the bust.
Cheers, Connie

LET'S BEGIN THE JOURNEY TO "GOING PUBLIC"post 5

Hello,

The object today is to explain the procedure of making a Company into a Corporation and why. In the next post we will move the Corporation onto the Stock Market to raise more capital for expansion.

The CEO is our old friend (Mr.M) and he represents the board of directors of a Corporation called "UP YOURS" dedicated to the suppository business with sales to a large group of Pharmaceutical Companies. Business has been extremely good in spite of the downturn due to the large number of newly elected politicians whose needs are involved with the company and who have been willing to sponsor elements of "Up Yours" as a growth factor.

The CEO made the COMPANY into a CORPORATION largely as a means of protection for the personal assets of the SHAREHOLDERS against possible claims from creditors. So they are no longer personally liable for the debts and obligations of the business. That includes LOANS made by the company, accounts payable (CHARGES from others) or FAULTY OR DEFECTIVE suppositories.

The State Incorporation law allowed them to file at the same time as incorporation, a DBA/FICTITIOUS NAME (doing business as/fictitious name). States differ in their rules on this. So the company was named in the INCORPORATION PAPERS "Up Yours" and that became it's DBA.

The Attorneys in the law firm, "YOU NEED REPRESENTATION", filed the INCORPORATION papers with the Department of State, after recommending to the CEO that with only 95shareholders the company could become an S CORPORATION to avoid double TAXATION on the CORPORATE INCOME. The IRS (INTERNAL REVENUE SERVICE) allows this for a Corporation that has eligible domestic trade, one class stock,and no more than 100 shareholders All the Shareholders had to sign an IRS form since shareholders must report a flow through in their personal tax accounts of income and losses and are assessed tax at their individual rates. Upon completion the company was offered a CERTIFICATE OF STATUS, EIN (Identification number from the IRS), STOCK CERTIFICATES, COMPANY KIT, and a REGISTERED AGENT'S service for an additional fee.

The CORPORATION has enjoyed enormous profits although they are finding governmental interference in their structure to be a burden that they would like removed. Accepting Federal government sponsorship and loans will keep them from expanding while they repay their debt. At that time they can attempt to disengage themselves from the restrictions the Federal Government has placed upon them.

Federal or State Government assistance with your business is another double edged sword. The cash you may need for COST OF BUSINESS under certain circumstances is often readily available but carries with it an Umbilical cord that can move you from private potential to government control and choke off rational growth. Cutting the cord strangling your assets is not as easy as getting involved.

Our CEO, clever man that he is, manages to extricate the profitable CORPORATION from GOVERNMENT CONTROL, pay up the debts, BOOST PROFITS to such an extent that the Corporation is ready to GO PUBLIC (sell stock publicly and be a part of the stock market). If the CEO is able to put the Corporation in good standing on the market, he stands to receive a huge bonus. It's unnecessary to say that he works furiously to get the job done. Before our CEO goes public, let's take the time to deal with another issue. CEO MONETARY ENDORSEMENT OR BONUS PAY.

There's a lot of palaver about Corporations paying out monster sums (CEO BONUS PAY) to the head of their business. Good CEOS are so talented in their fields that they make the Corporation the profits needed by doing multiple tasks above and beyond normal business skill level. CEOS are highly sought and competition for them is keen.

Corporations make mistakes in their selection just as we make mistakes electing Presidents but we both choose from the given talent field.

Compare a CEO to Madonna (received monster sums) especially in her prime. Can "Cookie J.", the girl next door, sing, shimmy her near naked body, act, choreograph entertainment programs, run her career, sleep around, and manage her business portfolio while drawing in horrific numbers of fans? Maybe. Sooooooooooo....why isn't she in the TALENT LOTTERY that goes on to find the best, most talented, and brightest among us. Obviously, "Cookie" lacks some "X" factor of the Stars in any field. What is that "X" factor? Opportunity? Determination? Personality? Hidden skills? Workaholism? Passion? If we really knew we'd bottle it and sell it at Walmart's thousands of stores! Walmart is a CEO star story if there ever was one.

Yeah, the sum paid to the top talent in a variety of fields is obscene while we overlook monetarily some singular talents like Jonas Salk, who discovered the Salk Polio vaccine in the 20th Century and saved countless lives while stopping a crippling disease. He received a prize and little cash. He wasn't a candidate for the TALENT LOTTERY since his skills though brilliant were narrow in application and his ventures very risky. Thank God, we have people like Salk who carry hope to reality but as stars go in our star crazed society, few people remember his name.

One suggestion I have is that the Company Boards and CEOs in our country and perhaps globally rethink the structure of hiring a CEO because I believe it is fast getting out of hand. This would be applicable to the entertainment industry as well. A TALENT LOTTERY can be conducted with agreed maximum limits in cash and if necessary unlimited donations in the CEO's name to charitable concerns.

These are interesting puzzles for society to question but "Up Yours" wants Mr. M. as(CEO) and are willing to pay Big Time because he has the skill to lead, organize, structure loans, is conversant with national trends, pharmaceutical changes and can schmooze leaders and politicians on both sides of the Globe necessary to expand the Corporation into GLOBAL MARKETS eventually and make a really humongous PROFIT.

Our next post will deal with GOING PUBLIC on the STOCK MARKET and what that entails. That will put us very close to defining more parts of Economics.

Cheers, Connie

HARD LESSONS LEARNED (PART TWO)*post 4

Hi,

Our large sale scenario has taught a number of lessons. The first and most important is that there are some events too large to be practical and are better left under the control of an individual ENTREPRENEURSHIP, (SOLE PROPRIETORSHIP). It is often extremely LABOR INTENSIVE with small gain to include a large group.

Our event as set up was able to create a small profit for the SHAREHOLDERS but mainly simply relieved them of their "junk". Everything went as scheduled but because of unanticipated expenses, the parking was not addressed and that was our second mistake since we were cited for creating a nuisance and may be fined (COST OF DOING BUSINESS).

The complaints from SHAREHOLDERS were so many that it required a "closing operations" meeting to deal with all of them. Luckily, we discovered that we had a lawyer in our SHAREHOLDER group to deal with a new financial question. Mr.X's copy of a contract (I should have known better) failed to cover a number of contingencies, important among these was a lack of agreement on clean-up.

Our COO claimed a large extra fee for overseeing and assisting the cleanup necessitated by visitors as well as participants. We thought this would be included automatically and we were wrong. A good contract would have clarified this issue. The lawyer NEGOTIATED (BARTER is back) with the COO on the additional cost and saved us money and a possible lawsuit that Mr. X's stubborn guilt might have caused when he got infuriated by the COO'S claim.

I grant you the COO could have anticipated and should have mentioned cleanup since he was our expert but we should have known that "the buyer must beware" or in this case "be aware". The SHAREHOLDER lawyer did our legal problem PRO BONO (Pro Bono Publico: Latin for the good of the public. A charitable service by lawyers). If he had charged us, more PROFIT would have melted away from an already high COST OF DOING BUSINESS.

We also learned that hiring an "expert" is a two edged sword and must be seen as such. We allowed the fact that he was taking charge lessen our feeling of responsibility and depended solely on his direction. Letting someone else take charge of the business and money (VENTURE CAPITAL) without constant oversight either through a lawyer or a CFO (CHIEF FINANCIAL OFFICER) is very foolish. Since our large yard sale was actually a very small business, a CFO would have been overkill but checking our SHAREHOLDERS for legal help would have certainly been appropriate.

The many details and unforeseen problems in the setup of the new company illustrates how and why finances become Economics. This is a seemingly simple and workable idea for an INDIVIDUAL or even a Partnership. However, expanded into a company with a board, shareholders and employees, it becomes a maze through which an organization must weave a path. In a LITIGIOUS society (people who settle problems by hiring an expert IE:lawyer instead of private negotiation or because of failed negotiation), legal problems must be foreseen and appropriate measures taken to protect the company.

As creative solutions to the myriad problems that occur become part of the fabric of doing business, ECONOMICS is formed. Larger companies become corporations and multiple large companies in a corporation can form into a huge success (like Walmart). Trade interaction between the many corporations are complicated by additional elements not included in our examples. Add to that a larger body of business in recent years called GLOBAL trade between nations and the complexities multiply.

Remember these yard sale examples are fables so if I have skipped some element in the object of brevity, let it go unless it is an important issue to our main subject.

We'll leave the yard sales behind us and promote our COO, whose business experience has increased two-fold, to head a CORPORATION (a company under legal safeguards). As CEO (CHIEF EXECUTIVE OFFICER. He plans to TAKE PUBLIC (allow open share buying to raise more CAPITAL for EXPANSION) the company on WALL STREET (a term used to denote the United States financial hub in New York City housed on Wall St.) with an issuance of SHARES (based on capitalization-MONEY PLUS MATERIAL GOODS) and known as STOCK (the SHAREHOLDERS become STOCKHOLDERS along with any others who now choose to buy into the company) so that it becomes part of the advertised STOCK MARKET or what is commonly called WALL STREET.
Cheers, Connie

LET'S TRY A PARTNERSHIP post 2

Hello again,

Our fictitious yard sale showed a simple trade or barter as a small business so I think we'll continue the analogy into a simple partnership.

A neighbor watched the yard sale and approached me suggesting we go together the next time and sell from his things and mine (our merchandise). He has two kids and they will join mine to help (create a larger labor force).

We post sale signs together and purchase another ad in the newspaper. We split these "cost of doing business" expenses equally.

All goes as before but we have more left due to inclement weather. When it comes time to tally up the results, my neighbor objects to deducting the cost of sale expenses as too much trouble and says we should just split the proceeds and forget the charity donation. This is unfair since I have paid for the hamburgers which he didn't acknowledge as necessary and his kids ate more than mine. Not doing the charity donation makes the sale quite close to a loss.

I have made a glaring error in the partnership by not discussing and agreeing on the total idea. By following his plan, I will be out more of the cost than he is since I paid the lion's share. I explain this to him and he grudgingly acquiesces but I feel sure we will not be partners again because his ideas of equal are not the same as mine.

That's the scenario and it illustrates a number of points not shown in the original yard sale.

As you can see when a second party enters the business picture, the simple element of trade becomes more complex. Contracts, both verbal and/or written become a necessity to clarify each person's understanding of what is agreed to as the final result. If things like the weather, location and various other physical things can interfere, the partners must decide beforehand what result is to be chosen. And they must agree on what is to be considered expense to be deducted from profit as well as the kind of profit. I considered donations a profit in the first yard sale since they are deductable help for others. Because of my oversight, I have lost a partner maybe a neighborhood friend and wound up with a less than successful venture.

Plural interaction shows how simple trade suddenly becomes complicated as more elements are added to the situation. Rules form and must be articulated or written. This is a very simple example of how something called Economics comes into being.

Economics becomes a dictionary of terms for the interactions that go on between people and nations. Not understanding these terms and what kind of agreement is being made can result in loss and/or disaster.

In the United States we depend on our Congress to read, understand, and sort out the type of agreements that will be beneficial to the taxpayers. However, that doesn't excuse the taxpayer from being at least knowledgeable since the game of politics can often set in place a representative or senator who is not qualified, has a personal "ax to grind", or is not educated into the intricacy of Economics. Then it becomes the taxpayers responsibility to point out the error(s) and make sure to replace the politician with one who can handle the issues. It probably should be a requirement of leadership to have some background in high finance or Economics although that too has its downside.

Just knowing that 10-20-30-trillion dollars is too much to spend on anything is not enough to sway a politician particularly if upteen million dollars winds up in his state. The Senator from Nebraska showed us that example when his vote was procured for the 2009 health initiative. Did he realize what he was really bargaining away? I think he got a "loaf of bread" for his vote compared to the debt to the taxpayers that his vote could have caused. I hope he'll undertake an understanding of the economics of this nation not just his state.

This then is the reason I have decided to unravel Economics. Not to run for political office. I am too old for that, thank goodness, but to see as a writer if I can put Economics in perspective so that a great many of us can understand. As I said we'll see if I can do it.

By the way, don't scold me for not being erudite. If that's what you need, there are plenty of books out there with that bent. I am after clear, precise information that even a young person can read and understand. Again, we'll see how I do.

CHEERS, CONNIE

LET'S EXPAND OUR BUSINESS (PART ONE)* post 3

Hi,

Our original garage sale is expanding. We're getting a glimpse of Economics along the way but understanding the basics of business transactions helps to clear the way for the more complex explanations.

After viewing our efforts at garage sales the whole gated community decided that a joint venture would be a blast!

You've heard of "VENTURE CAPITAL". In our case this simply means --pooling our merchandise and resources. We will share all expenses and profit but add several really important factors: more labor,organization,and KEEPING RECORDS (ACCOUNTING). We may need to hire people (PAYROLL EXPENDITURES) trained to do various tasks since this undertaking will require many decisions and much time.

An enlarged business effort can be too much for amateurs or volunteers and over 100 people want to participate. We decide we may have to hire a specialist and let him make the necessary decisions. Our COST OF DOING BUSINESS will go up sharply and it will be too much for us to lay out. We call for a meeting of the 100 people and lay out our plans including hiring a professional for the sale.

Much discussion ensues and we lose some of our participants because we are asking for an up front cash outlay for expenses (VENTURE CAPITAL) of $20. each This is an arbitrary figures since we are "clueless" about projected expenses. However, we have explored the costs of hiring a yard sale expert and know that he will work on a percentage basis.

The cash outlay will make all members SHAREHOLDERS (much like buying shares in any company as well as on the stock market). Those who decide to contribute constitute the SHAREHOLDERS of our little company, that we name Yippee Yard Sale now containing 90 Shareholders and an agreement to disband after all final yard sale settlements. From the SHAREHOLDERS a BOARD OF DIRECTORS is formed and instructed to act for the Yippee Yard Sale voluntarily (unpaid). Since I am one of the original yard "sale rs", I am elected CHAIRMAN and I have four BOARD members including my original partner (Mr.X) with whom I had some issues from the partnership sale.

Our board meets to discuss our costs (COST OF DOING BUSINESS) for the sale. It is difficult to ascertain. We struggle with a BUDGET formula (a plan for spending but not overspending). Our "SEED CAPITAL" or "VENTURE CAPITAL" of $1800. is the only given. We will have an unknown amount of profit from sales plus more expenses. We decide to hire the yard sale expert pronto because we are uneasy about all the unknowns and monetary complications.

We are lucky to find someone with experience who is willing to negotiate with us on an overall fee based on the success of the yard sale with a SLIDING PERCENTAGE RATE of 5 to 10% after expenses are deducted. We set the percentage rate on a minimum to maximum amount of sales after the expenses are deducted. So if we sell only minimally, the fee will be 5% or if we sell the maximum it will be 10% and we set parameters in between. We sign a CONTRACT (a paper showing agreement to the stated terms signed by our expert(Mr. M.)and us. The CONTRACT will hopefully prevent any misunderstanding about the terms of employment because it outlines Mr. M's duties and pay. Mr. X suggests we use a photo copy of a contract to save lawyer fees. This will prove to be our first mistake.

Mr. M. is now our CHIEF OPERATING OFFICER (COO) of the company) who advises us and works with us on the necessary organization of a large sale. In this case he is a COO rather than a CEO (CHIEF EXECUTIVE OFFICER)since it's a limited operation and he has to be HANDS ON rather than OVERSEEING staff. He stresses the importance of all SHAREHOLDERS receiving a written structured plan showing that we are keeping good accounts (ACCOUNTING); will have careful storage and sales; and will lay out all the ground rules and plans for our fledgling company, "Yippee Yard Sale", in a written portfolio. SHAREHOLDERS who do not contribute merchandise do not receive a full share of the profits.

The records must include: a written receipt with SHAREHOLDER copy of merchandise received showing from whom and when; description of goods, sale price range desired (or not); sold for what amount; and notice that their unsold merchandise will become a donation to charity; our COO advises against credit cards at this sale because of inexperience, company fees, and lack of equipment. We must stress cash in our advertisement and he recommends a three day sale.

He tours the environment and suggests that we can save costs by storing our merchandise temporarily in the utility shed (for which we'll need permission before the sale and for the remainder afterwards). SHAREHOLDERS need to be instructed to deliver their goods of a certain value at specific times, limited to no more than ten pieces up to 50 pounds (with a total of 90 people-we are looking at 900 pieces of merchandise to prep and display), receive a receipt, and to sign a permission slip granting unsold goods to be donated to a charity who will haul them off. No exceptions to be made.

Our COO will talk to the state tax officials and see to our obligations as well as to Federal taxes. The state normally does not tax CASUAL SALES (like our first two yard sales) but whether a sale this big still qualifies will be determined by state officials. Meanwhile we must plan to pay the tax until we know the rulings.

We must rent a tent and tables, some chairs (COST OF DOING BUSINESS)that can be set up near the utility shed to save labor transporting merchandise. He thinks we can still utilize shareholder's kids to help with cleaning the merchandise, carrying it to the tent, and setting it up with one paid overseer and suggests a person he has used before. He tells us to choose several groups for various days and a number of adults as well. He also mentions parking and an officer for directing traffic. We have come to the realization of the enormous task we have undertaken.

CONTINUED IN THE NEXT BLOG
CHEERS, CONNIE

NOT YOUR USUAL PROFESSIONAL BLOG Post 1

ECONOMICS-Eco what? Yeah it's a GREEN thing.

Hi, the first question is why am I doing what I'm doing? That's easy. Economics seems to be the name of the game today.

Second question: don't I understand finances? Yes, but that's not always related to Economics. Notice I capitalize THE WORD-because it's become such a mystery subject to so many.

Why? Well, my theory is that if you want the power to tell people how to think, act and live, you have to create areas that seem beyond their knowledge. It's like a box and only "Economists" (people who study all the areas) can lead folks out of the Economic Jungle of ignorance box so that a happy, fulfilling life can be achieved. PULEEZE-Give it a rest!

It takes some genius to create Economics but it doesn't take genius to figure it out. So, I am learning the basics of the Capitalist system as set forward by our forefathers and constantly being updated by our "post fathers", who have made simple bartering a thing called ECONOMICS. How will I do this? Read, read, read!!! How well will I do it? That remains to be seen.

Let's begin with simple trade although bartering (exchanging material goods)was the real beginning of all commerce.

We'll have a garage sale. I have some terrific stuff (at least I think it's terrific) and I will put it out in my yard with "yard sale" sign. I post a few signs down the street as well. I put an ad in the newspaper and set hours and a day for the sale. Now we've opened our own "business". We call the money spent as "the cost of doing business and advertising"

OK. on the day I open the yard sale, my kids and I set out my treasures as attractively as possible making sure they are all dust and stain free. We place a price on each one with a willingness to barter the price later. I promise the kids a nice meal out for helping me. This action represents "labor" and "salary" and since they are unskilled at this, the salary is minimal. We are bartering time against nice hamburger food.

The day progresses, the kids get bored and I show my treasures to the people who stop. My neighbor loves the Foo Dogs and offers to trade me a garden fountain for them. Good barter for both of us. Others who come by offer money and soon the day is done. I have cleared out a lot of things, gained money, and others have benefited from it by getting my "stuff" at a good price. What I have left unsold I give to charity and count that as part of the "cost of doing business".

I subtract the amount I expended on "cost of doing business" from what I gained (in both material objects (the fountain) and money). If I have more than I spent that is my "profit". If I have less than I spent that is my "loss". If I have profit I will want to do another yard sale but if I have loss or if I just "break even" (no profit-no loss) I probably won't waste my time on another yard sale.

Simple, satisfying transactions all and practiced by most citizens sometimes and some citizens regularly. Commerce. I want to sell what I have--you want to buy it and so we exchange goods and/or money. See we're already into Economics! So what's with the learning curve?

Hey, you forgot the manipulative genius who discovered the following curves: supply, demand, indifference (show graphically whether you choose A or B is no problem); money supply ; goods and their transit; expanding markets; megaliths; political needs; global expansion; employees who keep track of who's bartering what, where and how and their profit; and on and on "ad infinitum" (Latin for "all that jazz").

Don't expect a blog every day but I will get back with new information I've put together.

I hope to use the above simple example of the yard sale several times to clarify and expand our knowledge of Economics!

CHEERS, CONNIE