Maybe it is not an Emergency?

13 December 2012 NATO announced that the Patriot PAC 3 batteries requested by Turkey on 30 November 2012 would be honored.  2 Batteries from Germany, 2 Batteries from Netherlands will be supplied. 14 December 2012 United Stated Department of Defense announced that it would contribute 2 Batteries to the NATO mission to Turkey (Deployed from Europe). It is expected that these batteries will be operational at the end of January 2013.

In this case NATO is providing 1 enhanced ADA Battalion (Not America Disabilities Act)(Air Defense Artillery) (6 Batteries versus normal 4 Batteries), The United States to provide 400 troops, German is providing approximately 400 troops and the Netherlands is providing approximately 360 troops.  Total initial troop commitment 1160 soldiers.  All parties emphasized in their respective announcements that unit will be under “NATO control”.

Wait it gets better as stated in the NATO press release the unit will not be operational until the end of January 2013.  Hopefully this will be so that the troops that are tagged with this deployment will be allowed to spend this Christmas with their families.  Glad it is not that much of an emergency.  On a side note it is a clever way to extent the ballistic missile shield closer to Iran, but I am sure that had nothing to do with the decision to forward deploy this ADA Battalion.

Just how long are they going to be forward deployed is the next question?  Will the troop elements be rotated out on a regular basis, so as to spread the pain among the PAC-3 batteries in Europe?

Even with allowing the troops to stay in Europe until after Christmas, the long deployment time for the Battalion is a direct results of the fact that the various parts of the Patriot system, namely the radar units, command and control centers, and communication and support facilities (power generation) can not be transported by air to Turkey they are either too big or too heavy, or too big and heavy, instead they must be shipped by ground and ship.

It brings to mind the remarks I heard from Retired Marine Corp General Cartwright in a conference where he chided the various chief of the services, he chide the Army for being too heavy and too big to move by air, and chided the Air Force for not being able to move the heavy and or big, and not being able to move enough of it in a timely manner, and finally the Navy for being able to move the big and heavy unfortunately they are too slow to be considered a rapid reaction assets.

In this case NATO is providing 1 enhanced ADA, The United States to provide 400 troops, German is providing approximately 400 troops and the Netherlands is providing approximately 360 troops.  Total initial troop commitment 1160 soldiers.  All parties emphasized in their respective announcements that unit will be under “NATO control” isn’t that nice.

Turkey will supply the physical security forces, and combat engineering support to ready the physical battery sites.  And it goes with out saying, but I will say it anyway that the United States will fill in the holes, i.e. the logistics train that will be required to support this forward deployment.  The United States in all likelihood will be the source of operational spares, since we have the deepest stores.

The 1160 troops associated with the enhanced ADA battalion will require a large logistics train to support it.  Most of the operational support will come out of Europe, another mission for the 21 Theater Sustainment Command.  It takes a great deal of Food, Fuel, Fiber, Shelter, Equipment, and Communications to support 1160 troops downrange.  Lucky for us the natives are friendly, or the footprint would have to be even larger.

NATO also announced that they would be deploying AWAC assets to provide additional coverage for the area, the commitment of another NATO critical asset.  Bad news there is limited maintenance support for this system in Turkey, oh well what a few more trips back and forth between Turkey and Geilenkirchen FRG, it is just a few tons of F-34/F-35 to make that trip.

Currently there are only 74 E-3 AWACS in the free world, NATO has 18 aircraft, France has 4, Saudi Arabia has 13, the United Kingdom has 7, and the United State 32 aircraft, with the majority assigned to the 552^nd Air Control Wing.  At best 80 percent are available for operations at any time, the rest are in maintenance cycle.

NATO had difficulties using their own assets i.e. 18 AWAC to support their operations against Libya lucky for the British, French, and the United States, mainly the United States.  What will we see in NATO’s support of Turkey?

The PAC-3 Batteries are a critical item for the Netherlands and Germany, given that Netherland only has two Squadrons (Battalions) (8 -12 Batteries total), and Germany has 6 Battalions (24-36 Batteries total).  The assets are anything but common.

God only knows what this is going to cost?  God only knows who is going to pay for it?  But my bet is the United State will pay for it either directly or indirectly via our funding of NATO.  It is unfortunate fact that the world is an expensive place.  Let the sequestration begin.

One more step toward the fungibility of the Employee

International Business Machine, AKA IBM, AKA Big Blue, just announce another step in their program to overhaul their pension program.  Here is the link.  Many years ago they converted from a defined benefit plan to a defined contribution plan.  New employee had no choice it was the defined contribution plan for them.  Retired employees and some soon to retire were allowed to stay in the defined benefit plan.  The rest of IBM employees were converted to the defined contribution plan from the defined benefit.  The amount of each employee defined benefit was calculated buy a disinterested third party hired by IBM (believe that and I will make you a great deal on some sea side property in Kansas) and an appropriate amount (given the growth assumptions) was placed in to the defined contribution plan for each employee.

The defined contribution plan was not that bad, IBM did have a matching contribution to the plan.  That contribution was made at the end of every pay period.  But gosh that is a great deal of money to tie up in an accounts that IBM cannot use, it is all those pesky fiduciary rules and regulations created to conform to ERISA of 1974.

So now IBM has decided that rather than make their matching contribution at the time that the employee makes his contribution, they will hold their contribution back until the end of the year, and make one lump sum yearly contribution.  That way IBM can still use the funds for their own needs.  IBM makes a defined benefit contribution of between 6 and 10 percent for each employee depending on the employee contribution.

With 95,000 employees in the United States, and an average salary in the 80K$ dollar range we are looking at some serious money in the range of 456 Million Dollars.  That is some serious change that the corporation could be using rather than have it tied up in employee retirement accounts.  If the employee turn over rate is near 5 percent, well that nearly 23 Million Dollars that the corporation gets to keep, it is truly good to be the king.

IBM is just recording IOUs for their contribution to each employee and they are put into an account and if the employee is still with company come the time that the lump sum is paid they get it.  The bad news for the employee is that they must still be employed by IBM when the lump sum is paid, otherwise no joy.  IBM is being a true sport to those employees who retire before the date that the lump sum is paid, they will still get IBM contribution, but they are not doing that out of the kindness of their heart, that is the law.

In the spring of this year IBM announce a plan for selected individuals, those close to retirement by the end of 31 December 2013 the option of working 60 percent of their schedule, being paid 70 percent of their rate, but with full benefits with a guarantee of their employment until their retirement date or 31 December 2013 which ever came first.

Given that IBM was “rebalancing its workforce” an IBM spokesman characterized this program as being “rather unique”.  If an employee did not join this program well then they would certainly be subject to resource actions, since according to the same IBM spokesman “IBM will continue to rebalance its skills and resources based on customer needs”.  Which was a nice way of saying you will be leaving sooner rather than later.

Another whack job by those lovable bastards that are drawing the big bucks enjoy, and making the hard decisions.

Morgan Stanly Financial Adviser, He or She is your new best buddy.

Who are we talking about, why of course your Morgan Stanley Wealth Management Financial Adviser (MSWMFA) that is who.

Let see his or her compensation plan was just changed to encourage him or her to increase revenue and allow him or her to buy discounted stock in Morgan Stanley, it is structured as a forgivable loan in 5 years, assuming that they are still employed at Morgan Stanley.  Even better it is a pretty slick way for Morgan Stanley management to keep the money in house.

He or she now will get a bonus of between 2 and 5 percent of the new assets/revenues that he brings in provided he or she is in the top 40 percent.  He or she is incentivized to bring in more than $750,000.00 of revenue by reducing the by 2 percent the bonus that is pay to all who brought in at least $750,000.00 in revenue.  Something tells me that generating $750,000.00 of revenue will not even get he or she close to being in that top 40 percent.

Morgan Stanley or more precisely the MSWMFA will be hunting whales, and big dumb ones at that.  I wonder if they are white, wait that was another story?

If you are already a customer of MSWM stand by for a the message from your MSWMFA that in all probability your assets are slightly (completely?) allocated incorrectly (Wrong) and that if you want to hunt with the big boys (more like be hunted by the big boys) you are going to have to make some adjustments in your assets allocations (Completely gut your current portfolio and try something completely new and totally different, how about options, better yet how about naked options, how about using the stock that you think that you already own, in reality it just a book entry, Morgan Stanley is holder of record, as collateral, we can loan you the money, and our rates are competitive, with every other brokerage house, how about credit default swaps, synthetic derivatives).  Surprise, surprise your MSWMFA is just the one who is able to assist you in this effort (Commissions and Fee oh goodie, how nice, thank you may I have another).  But of course nothing in this world comes free, and it will cost you a little in the form of commission, fees, and possibly taxes to be paid, to reposition you for the coming new market (We are going suck you dry if we get half a chance)(Is this the new normal?).  You do want to be ready for the coming new market?  Of course you do.

These individuals are called Financial Advisors, not Securities Brokers for a reason, and a great deal of that reason has to do with how disputes are handled and who they are or are not reported to.  This is very true when their advice is poor, well remember you signed that agreement that says you cannot sue, no you must use mediation, with their mediators (Good Luck with that).

Greg Fleming needs to keep his job, your MSWMFA needs to keep their job, although I suspect that come this time next year there will be less of them.  They are ready willing and able to keep their jobs even if they have to do it all at your expense.  So be a good a sport and just give Morgan Stanley your money (Do it for the children, Theirs).  They are people just trying to take make a buck.

The Morgan Stanley Corporation reminds me of the words of the Giorgio Moroder song “Blood from a Stone” from the remake of Metropolis.

“Turning for the wheels of gain. A system with a power of it's own, to draw blood from a stone.”

In this case maybe the lyrics should be changed to “draw blood from your stones”.  You have been advised of the situation, what happens next is totally up to you.

Fungible Employee’s

America’s slow long-term employment recovery, one possible source is the Fungible Employee and their increased use.

First a little definition is required.  A good is considered to be fungible if one unit of the good is substantially equivalent to another unit of the same good of the same quality at the same time and place.

Having sat in on a great many management meeting where one of the major topics was reduction of operating cost as a means to increase profit, it became clear that many of my much younger managers had a complete and utter lack of sensitivity to or for our employees.

Many of these B school graduates were on a quest, for something more holy than the grail.  They were on the quest of the fungible employee.  These managers wanted to replace as many of our current employee with as many fungible employee as possible.  We were in the business that was quickly gravitating to what many in our industry considered to be a commodity.   So profit margins were being hammered every quarter.  Our competitors were pushing for market share just as we were. Product pricing was being squeezed.   Competitors are trying to differentiate his or her commodity from the other guy’s commodity in an attempt to justify their products cost.

It just like I remember from air combat training once you are in the merge it quickly becoming a knife fight to the bottom, both side losing energy as the fight spirals closer and closer to the ground as each side expends energy in an attempt to gain an advantage until some become a smoking hole.  Some of the competitors have deeper pockets and other revenue streams so that they could stay in the fight longer, others were not so fortunate.

Never in any of the discussions did I here an utterance about competence or quality, or what would it do to our product, or for that matter what it would do to the company’s reputation.   Almost every single discussion concern cost, and those that did not concern cost concerned plans to acquire these fungible employees.

The have many names, the most common being temp worker, and they did not have to work for a temp agency.  To some extent contract employees can be considered fungible in that they also have some of same endearing qualities.  I do not remember any discussions about reduction in demand for our products.  When I asked once about this, after I pulled all of the arrows out, I knew not to ask again.

I am no longer with that company, for even my position was determined to be fungible.  Funny thing is that for a significant percentage of the individuals in those meeting many also found that their positions were fungible.  I am much luckier than many of them I could afford to retire, and so I did, many of the others are still looking for the next Eldorado, to them I say Bonne Chance.

The following is a list of the endearing qualities of the fungible employee.  It is not meant to be exhaustive, but it does contain what I consider to be some of the more important elements that senior management finds attractive.

1.              Fungible employees have no hidden cost, all their costs are known.

2.              You do not have to find work for them when your contracted tasks are completed, they can be released.

3.              They are no long term or reoccurring commitments of corporate or company resources (Sick Leave, Retirement Contribution, Health Insurance).

4.              No employment taxes owed to the government.

5.              Reduced Human Resources department.

6.              Reduced or elimination of training costs.

7.              No Unemployment payments or claw backs.

8.              Can be released at any time for any reason, no justification required.

9.              No expectation of increased costs as they gain mastery of their tasks.

10.          Short term commitment

11.          Cost can be renegotiated at the end of term.

For the employer it is a really great deal.

For the employee it is a really sucky deal.

Here is what the fungible employee gets out of the deal, and what a deal it is.

1.              No employment stability in your life (The company has no plans to bring you on full time no matter how good of job you do).

2.              Your earnings can be highly variable, depending on employment situation (You will work only when you are needed and not a moment longer).

3.              You could or will be responsible for all of your employment taxes.

4.              You could or will be responsible for all of your retirement contributions and or programs.

5.              You could or will be responsible for all of health insurance cost.

6.              You are responsible for your own training.

7.              Your ability to borrow from financial institutions is questionable. (Your employment history is pretty shaky).

8.              Get sick at your own peril.

9.              Take a vacation at your own peril.

10.          Slack off just a little at your own peril.

11.          Get injured at your own peril.

12.          If you do not like the deal, do not take it, we will find someone else.

13.          You are a commodity get use to it. (Welcome to the Brave New World).

What are THEY thinking about?

Or Why is the United States Stimulating the German Economy?

What are THEY (Department of Defense just in case you do not know who they are, not to be confused with THEM a bunch of giant ants in the desert of New Mexico) thinking about when it comes to stimulating the German Economy to the tune of at least .75 Billion Dollars to replace the primary United States Armed Forces medical facilities in Europe LARMC (Landstuhl Region Medical Center)?

LARMC is still operational.  Given that there is an overall force reduction currently taking place in all armed services.  The operational tempo down range (Afghanistan) is dramatically being reduced daily (You know we are wining the hearts and minds of the Afghan people, just like we did in Iraq, it is almost time to declare victory and leave, God knows that many of our Allies have.).  Given the mood of the Senate and their reluctance to keep US Forces in Afghanistan after 2014, the observed reduction in operational tempo may be even further reduced.  The reduction of forces forward deployed in Europe (2 Infantry Brigade Combat Teams (170, and the 172) disbanded in 2012).  The Department of the Army downgrading of United States Army Europe USAREUR commander slot from a General O-10 to a Lt. General O-9.  The current USAEUR actions to consolidation and or reduce the number of United States Army Garrisons in Europe.  The Department of Defense plans to pivot of our forward force structure from being concentrated in Europe to being concentrated in the Pacific.  Further announced reduction of personnel in Europe (Lajes Field reduction have just been announced, and the Portuguese government is not happy.  After the Portuguese government the United States is the largest employer on the island.).

Given all of the above, why is it that the Department of Defense, and more particularly the Department of the Army is trying to spend at least $750,000,000.00 ($ 750 Million, or $ 0.75 Billion) on a replacement facility for the Landstuhl Regional Medical Center?  (Replacing the facility did make sense with are past operational tempos in Iraq and Afghanistan, because it was busting at the seams.)  More importantly do THEY really think that they can build a replacement facility for that amount?  Given their track record on other project (pick on any one) and the current currency conversion ratios it is looking rather questionable. Additionally all constructions that take place on the local facilities has to be funnel through a single German corporation, we promise that we will get you the best price.  Look at the mess that was the KMCC.  To date the Department of the Army has a Total Obligation Authority of $197,592,000.00 or $197.595 Million Dollars.  Next years numbers are not out yet, that will be sometime in February 2013, and I can hardly wait.

It will also be a game of bait and switch, if the new hospital is built, at Rhine Ordnance Barracks (ROB), the next thing you will hear is that there is not enough supporting facilities at ROB, and that these facilities which existed at Landstuhl will have to be recreated at ROB to provide the same level and ease of support.  Surprise that will be at least another Billion Dollar shot into the local German economy.

Yes the current facility is old, but it is paid for.  Yes it separated from either of the two major DOD facilities located in Kaiserslautern.  Yes that makes more expensive to secure, but because it is separated, all of our eggs are not in one basket we do gain some security via separation.  If a foreign power wants to take the facilities out they (not the DOD) will now require the use of a large force structure to accomplish the task.  Larger force structures are harder to hide.  Attacking multiple targets, and being successful requires higher levels of execution, higher levels of coordination, higher levels of communications, and as stated earlier a much larger force, and the job does not scale linearly, it is exponential.

Remember Pearl Harbor, it was harder to guard all of the aircraft dispersed in their revetments, and harder to destroy aircraft in their revetments from sabotage, so General Short ordered all of the aircraft pulled from their revetments and lined up on the flight line, that way it would be easier to guard, and consequently easier to be destroyed by a concentrated attack.  The IJN air staff and strike leaders were pleasantly surprised when they discovered most if not all of the United States Army and Navy air assets neatly lined and boxed together at Naval Air Station Ford Island, Naval Air Station Kaneohe, Marine Corp Air Station Ewe, AF Bellows, AF Wheeler, AB Hickam.

One reason for the proposed consolidation is that operations and maintenance and security at these spread out facilities is expensive, and this is one way to reduce these re-occurring costs.

If the Department of Defense/Department of the Army with the blessing of the United States Congress is so dead set about spending this money, why not spend it somewhere back in the United States Where the Pork would help some congressman in his up coming election in two year?  Why are we the United States going to drop at least three quarter of Billion Dollars into the German economy?  Why are we stimulating the German economy?  Why are we not stimulating the United States economy?  I ask one question to members of the House and the Senate why is this pork not being kept at home?  Are large numbers of German citizens now voting for members of the House and Senate and they must be repaid?  Is this the United States way of paying German for the use of their troops in Afghanistan?  What are THEY thinking about?   It is not too late to stop.

Dear Mr. West you are not Abraham Lincoln, it is not even close

Comparison to Abraham Lincoln, come on Mr. West, please start taking your medication and start that long painful road back to reality?

Yes Abraham Lincoln was elected to a seat in the United States House of Representatives Once 1847-1849, and true to his words, he had pledged that he would only seek one term in the United States House of Representatives, he did not seek reelection to the United States House of Representatives. Lincoln record for the United States House of Representatives is 1 for 1.  Mr. West your record for the United States House of Representatives id 1 for 3, not even close.

Abraham Lincoln was elected to five terms and serves 4 terms in the Illinois House of Representatives.  He was elected to 4 consecutive terms Illinois House of Representatives 1834-1842.  He was elected to a 5 term in the Illinois House of Representatives, but resigns in 1854 in order to run for the United States Senate.  Lincoln record for the Illinois House of representatives is 5 for 5.  Mr. West your record for the Florida House of Representatives is 0 for 0.

Abraham Lincoln record for United States Senate is 0 for 2.  Mr. West your record for the United States Senate is 0 for 0.  I know this is unfair, since you have not chosen, or have you been chosen to run for either of the United State Senate seats for the State of Florida.

Abraham Lincoln record for the Office of the President of the United States is 2 for 2.  Mr. West your record for President of the United States is 0 for 0.  Again I know that this in unfair, since you have not chosen, or have you been chosen to run for the Office of the President of the United States.

How many legal cases did Abraham Lincoln argue before the Illinois Supreme Court, that number would be 175 cases, more remarkable is that in 51 of the cases he appeared as the sole counsel for his client.  How many case have you argue before the Florida Supreme Court, that right it is 0.

While in the service of the United States Military in the Black Hawk war, how many times did Abraham Lincoln face an Article 32 Hearing?  For Mr. Lincoln that number would be 0.  While in the service of the United States Military how many times did you face an Article 32 Hearing?  For Mr. West that number would be 1.  Did Abraham Lincoln receive an Article 15, nope, did you receive and Article 15, yep.

By all of these measures you have essentially passed your Wassermann which is one of the few tests that one does not want to pass.  Although not specific to a certain sexual transmitted disease it can be used as indication of life threating infectious disease (Malaria, Tuberculosis,).  Please Mr. West for your sake and the sake of your family please seek immediate medical treatment.  Malaria and its resulting fever could be a possible explanation for your delusions.

Durham, Cochran and Snow

Newest federal inductees into the Dewey, Cheathem, and How fraternity, and Club Fed are the team of Durham, Cochran, and Snow.  Our three nefarious inductees all have won all expense paid incarceration in as of yet unnamed federal correctional facilities.

Mr. Durham has been awarded 50 years of incarceration at a federal facility of the government choice for his part in an outstanding effort in the field of wire fraud and securities fraud to the tune of $208,000,000.00 ($208 Million)(Which is a record for the state of Indiana) as CEO of Obsidian Enterprises of Indianapolis, Indiana and former CEO of Fair Finance of Akron Ohio.  The US Attorney for the Southern District of Indiana Joe Hogsett note that these criminal charges had nothing to do with his Mr. Durham other job as CEO of National Lampoon.  Other notable accomplishments were Mr. Durham fund raising for the Republican Party (I wonder if the Republican Party and any candidates that he made contributions to will give back the money that he raised for them and or he donated to them?).

Mr. Durham who is 50 years old can be out of stir with good behavior by the time he is 93 and a half, congratulations you have just been handed a death sentence, statistically you have about as much chance of seeing 93.5 years of age as me wining the latest Powerball lottery, (what do you mean someone else won, and they are from Missouri!).  Look at it this way your repayment to society will be at a rate between $11,397 and $13,085 for each day that you serve (Full 50 year or 43.5 year for good behavior).  Technically you are responsible for the whole amount of the fraud, but I am just guessing you already know that.

Mr. Cochran chairman of Fair Finance of Akron Ohio was awarded a total of 25 years of incarceration at a federal facility of the government choice for his supporting role in the field of wire fraud and securities fraud.  Since Mr. Cochran was only awarded half as many years he must have had dirt on one hand (right or left?).  Mr. Cochran who is 57 years old will be 82 years old if he survives incarceration and serves his full sentence, with good time Mr. Cochran could be out when he is nearly 79 years old.  What a way to spend your golden years, well played sir, well played.

Mr. Cochran repayment to society will be at a rate between $22,794 and $26,173 for each day that you serve (Full 25 years or 22 years with good behavior).   Mr. Cochran technically you are responsible for the whole amount of the fraud, you know in for a penny in for a pound.  What a deal Mr. Cochran certainly better than Mr. Durham.

Finally there is Mr. Snow, the ex Chief Financial Officer of Fair Finance.  He was award a total of 10 years of incarceration for his supporting yet uninspiring role in the field of wire fraud and securities fraud, not a really stellar performance sir, next time; if there is next time you should try harder.  10 years in a federal correctional facility to be named by the government is a really sucky consolation prize.  Mr. Snow who is 49 years old will be 59 years old provided he survives his incarceration (it is likely that he should), but with good time he could be out when he is nearly 58, now that’s something to look forward to.  58 years old a convicted federal felon looking for a job (Three strikes against your, convicted felon, age, and an unexplained gap in your work history, not a wining combination), is life great or what.  He might actually spend some of his golden years outside of the wire, missing that 0300 hrs. Bed check.  Do not blame the Bed check on the institution blame it on others who came before you and took this particular time in the morning to either escape or try to escape.

Mr. Snow repayment to society will be at a rate between $56,986 and $65,429 for each day that you serve (Full 10 years or 8.7 years with good behavior).  Mr. Snow it appears that you have the best deal.  Were you the weakest link?  Again as in the case of the other two defendants you to are also responsible for the full amount of the fraud.

Gentleman all of you should remember the lines from the song “Ride Captain Ride” by Blues Image, as you are being in processed at the Federal Correctional facility of the government choice.

“On your way to a world that others might have missed. Ride Captain Ride Upon your mystery ship, Be amazed at all of the friends you have here on your trip”

For prison is a world that many others have missed.  Having friends is outside of the walls and keeping them is truly amazing.  In all probability you will join the missing.  As one who has processed incoming inmates to a correctional facilities, it is something that still gives me chills, and I got to go home every evening, it was a hell of a way to put myself through college, and as soon as I could find other employment, I did.

I do not know if any of you gentlemen have wives and or children, but if you do I offer my condolences to them in this their hour of travail.  May the scars of your personal failure inflicted on your families’ members be small and or inconsequential, but somehow I believe that this will not be the case.

Gentleman Bon Chance, it is more than you gave your victims.  It is unfortunate for your families that in the game of life there are no Mulligans.  There is always a chance of a Presidential pardon, granted right now many will classify it as non-existent, or that the Federal Statues on good time are revised and relaxed, but the odds on this appear to be quite long (elected representatives want to appear to be hard on crime and criminals before I suspect that you would not blame them for this position, but right now I suspect your position on the subject might be changing), but stranger things have happen, just not too often (Black Swans anyone?).