Mike Bechara Featured in The New York Times!
What can we say? The mainstream media continues to warm up to us. Please see our featured story below:
http://www.nytimes.com/2010/11/16/business/16expenses.html?_r=3&scp=1&sq=bechara&st=cse
Show Business for the Unpretty
Posted by mbechara in Uncategorized on January 10, 2012
“Deal with people according to their intelligence” – imparted circa 1979 and repeated often since then
So we were on our way for a little “between-the-holidays” trip. As the minivan plied the interstate across the Connecticut countryside north of Hartford, the nagging started.
The kids had brought a handheld video game system with them for the ride. My son apparently was on a tear playing some action game, and did not want to let his sister have her turn.
As the arguing reached a crescendo, I looked in the rearview mirror and tried to mediate.
“Why don’t you just share the video game with your sister?” I asked my son.
“Well how much should I share it?” he asked.
“Half the time,” my wife and I responded together.
“Oh so I have to give her half of everything I have? Fine when I get home I’ll give her half my clothes, half my toys and… ok great ..she’ll even take half my room! …..
Really, Dad? Don’t you think that’s unfair? You’re always talking about people taking half your money!”
My wife looked like she was about to make a move into the backseat.
“Nice strawman,” I calmly replied.
“What?” the boy replied quizzically.
So I explained to the him the debate tactic of the strawman, where a debater attacks an argument that is easy to refute but which is also an argument that was not made by the other side.
Unfortunately, these tactics are not limited to children arguing. In the recent Presidential debates they have been on full display for all to see. Amongst the deceptive debate tactics used by almost all the candidates are:
- Name calling – Since I can’t make a cogent argument, then you Sir are an idiot!
- Changing the subject: On the subject of energy independence I just want to say that I faithfully served my country for 25 years…..
- False premise: Now everyone knows this policy is just and fair so if you oppose it you are against justice and fairness!
- Sloganeering: Everything changed after 9/11
- Cult of personality: Ok so my opponents policy would actually solve something but I’m better looking than him! Don’t you see my expensive hairstyle with the perfectly placed touch of gray….
- Vagueness: We will be free and energy independent by 2013!
- Scapegoating: If it wasn’t for people like Mr. X, we wouldn’t be in this mess!
So what does this mean? Do we expect politicians to be honest and straightforward and make logical, cogent arguments about weighty policy issues?
Actually… yes.
In another vein, the media members asking the questions encourage the degrading of the atmosphere into some smarmy gossip show. A sampling…..”Mr. X, I have an important question to ask…Blackberry or iPhone?”
Seriously?
The question we should be asking ourselves is, “Who are the idiots in this debate…. them….or us?”
A long time ago, a wise old man advised me to deal with people according to their level of intelligence. The presidential candidates must hold an exceedingly low opinion of their audience. How else does one explain the simplistic diversions, made up arguments and lame personal attacks that permeate the so called debates?
They are tailoring their message for the perceived level of intelligence of the audience. Which begs the biggest question of all….are they right?
We hope not…but back to our little holiday trip…..
As I talked the kids into sharing the video game amongst themselves. My wife and I began chatting about what just happened.
“I don’t like the way he comes up with these excuses,” she commented. “I’m going to speak to him about being more straightforward.”
Not being able to resist, I smiled, put my hand on top if hers and smoothly said, “Relax, he could be President someday.”
It was a real quiet ride after that.
Have a great week,
Michael Bechara, CPA
Managing Director
Granite Consulting Group Inc.
mbechara@consultgranite.com
www.consultgranite.com
The Moment of Truth
As the sun descends there is a palpable edginess in the air. The kids are restless as they start arguing with one another, my wife starts cooking incessantly and I nervously start stacking wood and locking doors.
Then the moment arrives. Goodbyes are said by the garage door; warnings to the kids are given. The littlest hangs onto my legs as my wife and I say goodbye.
The kids all crowd together and stand on the sofa as they watch their father disappear into the night.
Sunday night business travel is the worst.
After traversing the thick blackness for a few minutes, I begin to see the night sky come to life with an eerie glow…it’s the reflection of the millions of lights of New York City in the clouds. Its moments such as these that I often reflect on why we do what we do.
Why leave the comfort of hearth and home to travel long distances?
Because there is a job to do…because we are responsible to customers, employers, suppliers and ultimately to our families to do our jobs effectively. People are counting on us and trust us to deliver on our promises.
“This Bechara guy makes a terrible Oprah”, moans the peanut gallery…
Anyway, the bottom line is that without the trust mentioned above our economy simply does not function.
MF Global anyone?
In one of the most dramatic breaches of fiduciary trust ever, commodity broker MF Global recently “lost” approximately $1.2 billion of client funds. MF Global CEO, Jon Corzine, former governor and US Senator from New Jersey had this to say about the missing customer funds:
“I simply do not know where the money is, or why the accounts have not been reconciled to date,” Corzine’s said.
Making this story more interesting is that in addition to his political experience Corzine is a former CEO of Goldman Sachs.
A former CEO of Goldman Sachs does not know where $1.2 billion went?
The final layer to this wedding cake of a story is that Corzine voted for the Sarbanes Oxley Act (SOX) while he was a Senator. To refresh everyone’s memory SOX makes corporate officers responsible for an entity’s internal controls, which in this case would clearly mean safeguarding client funds.
So SOX is about to have its moment of truth. I guess we are about to see if this is all about harassing low level employees by documenting their every move or if senior corporate officers with a responsibility to segregate client funds will held responsible.
Either we have a society based on trust that is supported and upheld by law or….do we drive into the night for nothing?
Have a great Holiday,
Michael Bechara, CPA
Managing Director
Granite Consulting Group Inc.
mbechara@consultgranite.com
Halloween Terror Charts
The plan was hatched as we walked down the middle of the suburban street. I am not sure whose idea it was, but as soon as it was suggested the group of boys immediately seized upon the idea and started improving it.
After a few iterations and role changes the critical question came up.
“Who is going to be the decoy?”
Predictably all eyes came to rest upon your dear author. At 7 years old I was a full 6 inches shorter than the other boys and a good deal skinnier. It was Halloween and we were out trick or treating with my older brother and his friends. Like any kid I thought it was cool to hang around the bigger boys and act older than I really was.
The trade off was that I had to go along with their plans.
As we approached the doorway and rang the bell one of my brother’s friends grabbed my shoulder and positioned me in the front of the group. A lady opened the door holding a heaping bowl of candy and chocolates. She was about 50 years old and seemed nice and pleasant.
Seeing me in front of the group of older boys she bent down so I could reach into the bowl while nicely saying, “Only take one boys…”
At the point the bowl reached the level of my eyes, the older boys behind me took their cue. The mass of boys behind me shoved me forward in one quick motion. Playing my part perfectly, I extended my arms forward making full contact with the candy bowl as I fell to floor with the bowl crashing down next to me.
Immediately the entire group of boys began vacuuming up all of the candy and chocolate that had spilled out of the bowl onto the ground. The poor lady watched in horror and could only manage to repeat “Oh my!” to herself several times as she watched the spectacle unfold.
As quick as it began it was over, and we were onto the next house. We would repeat the farce several times over before the evening was complete. I stopped counting the number of times I was pushed and knocked over that evening.
Despite the fact that Halloween is a child’s dream because they are allowed to knock on stranger’s doors and receive free candy…it’s not enough. Even if there is no way that children could eat all the candy they collect,..it doesn’t matter, they want more.
Ah,..as the French say, plus ça change, plus c’est la même chose….”The more things change the more they stay the same.
I stumbled upon some economic charts from the Pew Charitable Trust posted on Zerohedge.com and not only do they tell a terrifying economic tale, but they also illustrate that we in America have also been knocking over the candy bowl and we have become a victim of our own excesses. Excess debt, excess cheap imports and excess consumerism.
Readers beware the following charts are hard to look at!
The Debt Hobgoblin
This chart shows that the Congressional Budget Office forecasted in 2001 that we would have a surplus of $2.3 trillion in 2011. They were slightly off. Instead we have a debt of $10.2 trillion. Hey, they were only $12.5 trillion off. I am sure that their new projections for the future that include all those spending plans will be spot on…right?
The Unemployment Werewolf
Unemployment is only about 9%, but most of those unemployed find work quickly right? An often used phrase is that this is “transitory” in nature. Ahh..well..about a third of those unemployed have in fact been unemployed for one year or longer. How many families do you know that have one year’s living expenses saved for such an emergency?
The Spending Vampire
If GDP does not go negative then we are not in a recession. So goes the typical economic definition. But what if GDP is kept from going negative by government spending? Government spending currently makes up approximately one fourth of GDP. Some say if we stop the government transfusions the economy will die. Others question how many transfusions we have left in the blood bank.
Well that’s enough horror for now. I am sure that all of this will go away soon and that by April we will be seeing some very bright and sunny Easter economic charts to enjoy with the blossoming spring.
Oh I forgot one more thing……
Halloween this year is important for another reason. According to Zerohedge, on Halloween night 2011, US debt will officially surpass GDP. Stated differently US debt will be greater than 100% of GDP.
Anyway, later that evening we returned home with our bags full of Halloween candy. We were received by our parents and went inside to warm up. As I took off the shirt of my costume, my parents noticed the black and blue marks, red blotches and scrapes over my arms and shoulders. It looked like I had been in bar fight of some kind.
After confessing the story to our parents, the candy disappeared and a long period of imposed austerity was introduced to my brother and myself.
After the bubble the correction is always painful.
Have a great weekend,
Michael Bechara, CPA
Managing Director
Granite Consulting Group Inc.
Grecian Formula
The airport in Athens, Greece is fairly new as airports go. Built in 2001 it sparkles compared to many airports around the world and it gives off an air of efficiency and order. Perhaps the influence of the German engineers who designed it remains embedded in the foundations.
As we pulled out of the Athens airport, I could not help but look at the hills and landscape surrounding the airfield. Even in the middle of the night, I could see the golden landscape and tell tale olive trees of a Mediterranean country.
They may have a new airport, but Athens is undoubtedly ancient.
As my driver guided the small car around the turns and through the tunnels, we dispensed with the small talk quickly and started talking about real subjects. I really liked the guy, he had a great name (Michael) and had an easygoing way about him.
“Nice road”, I teased the driver while predicting his response in my mind.
“Yea, at 20 million Euro per kilometer it’s a real bargain”, he shot back with a smile.
So as the two Michaels drove through the Athenian night, this banter continued. Nothing special was revealed, but we had fun pointing out the ridiculousness of the size of the Greek national debt, how the money was squandered, wasted and stolen and finally how Greece would probably leave the Euro.
I arrived at the hotel as dawn was approaching the city. Thanking Michael for the ride I went to my room to try and get a few hours of sleep.
Many of you know I was in Athens, Greece last week giving a presentation at the Boussias Communications Second Annual Hellenic Internal Audit Conference. On the day of the conference, my presentation was scheduled for late in the afternoon, so I had plenty of time to network and get to know some of the people attending the conference.
I was surprised.
Of course the attendees to the conference were professional, well educated and many held high positions in industry, academia and government but that is not what impressed me.
What did make the difference for me was the willingness of these professional people to speak so openly and plainly about the economic and financial problems their country was facing. For example, when I asked about their opinion of the Greek sovereign debt crisis I received answers such as:
- “The country has been very badly mismanaged”
- “We have lived beyond our means for many years and now we are paying the price”
- “We have no excuse, look at Portugal….they are years ahead of us”
The answers were candid and reflected a very real awareness and understanding of the insurmountable debt that Greece has racked up since joining the Euro. This real world interaction makes a mockery of the daily bleating from the financial cheerleaders in the USA who announce at least once per week that “Greece has been rescued!”
“I can’t believe anyone invites this Bechara to speak anywhere”, mumbles the peanut gallery. “What so special about professional people spouting some simple economic facts?
Hang on I’m getting there.
What was interesting to me was that as I listened to them speak about their country’s economic problems, I would mention that we, in the USA, are not far behind them. We have our own debt problems but we replace hard reality with our wishful hope that our economy will be rescued by another bubble ignited by our easy money policies.
“Really? the USA…I can’t believe it!”, many of them replied.
Yes friends, we seem to be following the “Grecian Formula” (they didn’t get the Grecian joke) for success down to the very last detail I explained. From paying our public sector employees stupendous retirement benefits to bailing out failed businesses, our government has borrowed enormously and passed out the candy to its favorites.
While the sheer amount of money we have borrowed (and squandered) dwarfs that of the Greeks, it’s the debt compared to GDP that counts. If we take a look at the following charts we can see that we are catching up to our Greek friends quite quickly.
Yes race fans, we Americans are a tough bunch, the Greeks are have a debt to GDP ratio of 135% but we are at 100% and gaining!
So what do all these economic statistics mean? 100%….135%…so what?
Carmen Reinhart, a University of Maryland economist. with coauthor, Harvard professor Kenneth Rogoff, of This Time It’s Different: Eight Centuries of Financial Folly (Princeton, 2009), tell us that once a country crosses the 90% Debt to GDP ratio…. it’s pretty much over. Growth stagnates, the debt balloons and the result is predictable.
Basically, it’s the point of no return…..
Anyway, it was finally my turn to speak and I got up and said my piece.
As the photographer was snapping photos, I quietly wondered if he would drop his camera in disgust when viewing the results!
Anyway, the conference was a big success and very well done by the Boussias Communications people.
Later as I was being driven to the airport by my new friend Thanos, I wondered if people back home had any idea what was coming their way. As the plane took off from Venizelos Airport, I could not help hoping that as I was leaving the land of democracy’s birth that I would be back there again some day.
Have a great weekend,
Michael Bechara, CPA
Managing Director
Granite Consulting Group Inc.
Voice of Russia Radio Interviews Michael Bechara
Russia? Who would have thought they would be interested in what we have to say. At any rate, Alexandra Reclina asks us for our views on the S&P downgrade of US debt.
Bitter pill of deflationary adjustment to cure crisis
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Sasha Raikhlina
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10.08.2011, 15:50
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Interview with Mike Bechara, Managing Director at the Granite Consulting Group, talks about Standard & Poor’s downgrade of US credit.S&P has downgraded the US credit rating from AAA down to AA+. How come the other rating agencies have remained silent?
Source: Voice of Russia.
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