2017-01 Bond Newsletter

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UNBELIEVABLE!!!… I believe that I am among the majority of Americans who were both shocked and in some cases dismayed by the results of the November 8th Presidential elections. As I pointed out in my October 2016 Bond Newsletter, Hillary Clinton was the most unacceptable candidate that has been on a Presidential ballot or any other ballot in my lifetime. I also pointed out that I had no idea what Donald Trump represented, nor was I convinced that he had the temperament to be President of the United States. I, like many, was laboring under the assumption that the election was between “dumb and dumber” and that no matter what happened we were screwed. I was shocked by the results of the election and frankly felt that there was no way that Donald J. Trump would beat Hillary Clinton in the Presidential election. As the night wore on and the Las Vegas odds for Trump increased to 75% at around 11:00 p.m., I realized that an extraordinary event was taking place. I will have to admit that I do like President Trump much better than Presidential candidate Trump. I am extremely impressed with the cabinet and the people that President Trump has surrounded himself with. Although I think there has been some unnecessary “overreach”, I am both impressed and excited by his energy and the pace in which he is moving towards keeping his campaign promises. There is no way to know what his Presidency will look like in two years, but the one thing I am positive of is the fact that we are better off, warts and all, with Donald Trump than we would have been with Hillary Clinton.

***

NOW THAT WE HAVE GOTTEN THE ELECTION BEHIND US… let’s look at some the realities of what we are facing. Trump began his campaign as a deeply unpopular and divisive candidate, but since winning the election, his approval ratings have gone up week after week (even among Independents and Democrats). Optimism about the economy is increasing also. With a recent CNBC survey finding that 42% of Americans now believe “the economy will get better in the next year” which represents an unprecedented jump of 17% compared with a survey conducted before the election. Meanwhile, the stock market, which had been languishing for months and was predicted to plummet if he won, has also taken off and reached record heights. -1- Perhaps the best precedent we have for Donald Trump’s unexpected victory is the 1980 election of Ronald Reagan. There are many similarities between the two: Both were outside the Republican mainstream, both campaigned on reversing a bloated government and both brought their party to heel. Reagan’s plan for economic revival consisted to three parts: Tax cuts, decrease regulation and a large increase in government spending. Trump is following in his footsteps. In fact, Trump’s economic team includes many of the same people who were instrumental in Reagan’s “supply side” revolution: David Malpass, Larry Kudlow, Stephen Moor and others. But when you look at the economic conditions that prevailed when Reagan came to power, you quickly realize that Trump has inherited a very different economy: (1) Interest rates were 20% and inflation was 11.83% in January 1981 when Reagan was sworn in. In effect, interest rates and inflation had nowhere to go but down. (2) Contrast that with our current situation. Interest rates are at record lows, between 0.25 – 0.5% and inflation is also very low at around 1.5%. (3) Debt-to-GDP – That is how much government debt is relative to economic output, it was 31% in 1981. Despite his image of being in favor of small government, Reagan ran up the tab and by the time he left office, the figure had increased to 49%. Today, however, debt-to-GDP stands at a whopping 105%. But even that statistic is misleading because it doesn’t include all the unfunded liabilities of Medicare, Medicaid and so on. Add those obligations in and you quickly realize that the U.S. Government is effectively bankrupt.

WHAT THIS ALL MEANS FOR TRUMP IS THAT, UNLIKE REAGAN, IT’S HIGHLY IMPROBABLE HE WILL BE ABLE TO INACT KEY PARTS OF HIS ECONOMIC VISION.

Reagan financed his debt expansion the old fashion way. He sold long-term government debt to private investors. It is not possible to do that now? It’s hard to believe, but back in 1982, you could lock in a 14% annual return by buying a 30-year government bond. Admittedly, inflation was higher back then, but inflation fell over time and so did interest rates. The result was that the bond investors ended making a killing. Today, purchasing a 30-year government bond will earn you less than a 3% return. Add an annual inflation of 2% and your effective yield brought you to about 1%. Inflation, then, has to tick upward only a smidgen for you to earn a negative yield. Rising interest rates will also see you lose money on most bonds. The question is, as a voter, you may love Trump’s spending proposal, but how keen are you as an investor on the idea of lending your life’s savings, with no real expectation of a return to help you pay for them? You don’t need to read The Art of The Deal to know that you are getting screwed. If you are not going to cough up the cash, who will? Enough negative analysis, it will be interesting to see what and how Trump tries to spend money that is not available.

***

THE PROGRESSIVE MOVEMENT… for the most part is a California political ideology. The Democratic Party is floundering and trying to redefine itself. What the Progressives are to a Democratic Party is what the Tea Party was to the Republican Party five years ago and unless the idiots at the DNC move away from the Progressive agenda, they will destroy the Democratic Party. I do understand that a significant number of the “unemployed millennials” have embraced the progressive movement, but as they get jobs and responsibilities, they, like the rest of us who pay taxes and have financial obligations, will move away from that philosophy very quickly. -2- I am a great fan of Thomas Sowell. Thomas Sowell is an African American Economist, Social Theorist, Political Philosopher and Author. He is currently Senior Fellow at the Hoover Institution, Stanford University. If you are not familiar with Mr. Sowell, let me introduce you to him through a number of his quotes. All of which run in direct contradiction to the progressive movement. In that regard, please note:

(1) Socialism in general has a record of failure so blatant that only an intellectual could ignore or evade it.

(2) Much of the social history of the western world, over the past three decades, has been a history of replacing what works with what sounded good.

(3) I think this man (Obama) really does believe he can change the world, and people like that are infinitely more dangerous than the mere crooked politicians.

(4) It is amazing that people who think we cannot afford to pay for doctors, hospitals and medications somehow think we can afford to pay for doctors, hospitals and medications and government bureaucracy to administer it.

(5) If you have always believed everyone should play by the same rules and be judged by the same standards, that would have gotten you labeled a radical 60 years ago, a liberal 30 years ago and a racist today.

(6) I have never understood why it is “greed” to want to keep the money you have earned, but not greed to want to take somebody else’s money.

(7) One of the consequences of such notions as “entitlement” is that people who have contributed nothing to society feel that society owes them something, apparently just for being nice enough to grace us with their presence. Warts and all, I do think that Donald J. Trump will move this country in a direction away from the progressive ideologies of entitlement.

***

A USELESS BOND NEWSLETTER… should at least provide some useless facts:

(1) A hundred thousand years ago, human gestation was 15 months.

(2) 54% of Americans prefer to fold their toilet paper rather than wad it.

(3) A barnacle has the largest penis of any other animal in the world in relation to its size.

(4) Honey is the only known food on earth that never spoils.

(5) Percentage of Africa that is wilderness – 28%. Percentage of North America that is wilderness – 38%

(6) Percentage of American men who say they would marry the same woman if they had to do it over again: 80%. Percentage of American women who say they would marry the same man: 50%.

(7) Percentage of Americans who have visited Disneyland or Disneyworld: 70%

(8) People living in mountain states eats 30% more cookies than other people.

(9) Over 20 million Africans were transported to America and the Caribbean during the 300 years of slave trade. -3-

(10) Think we are tough today? Prior to the 20th century, boxers fought bare knuckled in matches which often lasted up to more than 100 rounds.

(11) Planet Jupiter is the only planet to spin clockwise.

(12) Russia has the most movie theaters in the world.

(13) Sir Isaac Newton, who invented Calculus, may have been a math genius, but he had terrible trouble with names and actually frequently forgot his brother’s name.

(14) n 1987, American Airlines saved $40,000 by eliminating one olive from each salad in first class.

(15) The Aztec and Maya Indians played a complicate game not unlike lacrosse. When the game was finished, the captain of the losing team was slaughtered before the onlookers and his body was torn limb to limb.

(16) The blueprints of the Eiffel Tower covered more than 14,000 square feet of drafting paper, has 1,792 steps and it took 2,500,000 rivets to construct it.

(17) The first couple to be shown sleeping together on primetime television was Fred and Wilma Flintstone.

(18) The first victim of the electric chair (which by the way was invented by a dentist) took 8 minutes to die.

(19) Iceland consumes more Coca Cola per capita than any other nation and Icelanders read more books per capita than any other people in the world.

(20) The only domestic animal not mentioned in the bible is the cat.

(21) 55% of men wash their hands after using the restroom, 80% of women wash their hands after using a restroom.

(22) The hardest bone in the human body is the jawbone. The strongest muscle in the human body is the tongue.

(23) February 1865 is the only month in recorded history not to have a full moon.

(24) The microwave was invented after a researcher walked by a radar tube and a chocolate bar melted in his pocket.

(25) The windiest place on earth is Mt. Washington in New Hampshire.

***

IT IS TIME FOR OUR ANNUAL TEST… For the last few years, the first Bond Newsletter of that year had contained a short and simple test of key events that took place in the prior year. Just to make sure that you are paying attention, please check out your memory with the following questions:

(1) Seventeen candidates entered the Republican primary last year. Who were the last three standing—besides Donald Trump?

(2) Which GOP presidential primary candidate’s father did Donald Trump link to the JFK assassination, based on a story and photo in the National Enquirer?

(3) In a hacked email published by WikiLeaks, a longtime Clinton aide fretted that the then-secretary of state had promised to attend a meeting in Morocco if King Mohammed VI pledged $12 million to the Clinton Foundation. Clinton “created this mess and she knows it,” the aide said. Name the aide. -4-

(4) After the Access Hollywood tape in which Trump boasted of sexually assaulting women became public in October, this high-ranking Republican official announced he would no longer defend or promote Trump’s candidacy, and said, “I am sickened by what I heard today.”

(5) In the election, Clinton lost three delegate-rich Rust Belt states to Trump by less than 1 percent. Name them.

(6) Which tech billionaire financed pro wrestler Hulk Hogan’s ruinous defamation lawsuit against Gawker.com?

(7) Beyoncé’s sexually charged mention of this national food chain during her performance in the Super Bowl halftime show was credited with a 33 percent spike in its sales.

(8) This British leader called for the referendum that led to the country’s “Brexit” from the European Union, and then campaigned for his nation to stay.

(9) Which recently elected world leader called both President Obama and Pope Francis a “son of a whore”?

(10) What country has taken the largest amount of Syrian refuges, at more than 2.7 million? (11) Microsoft agreed to acquire this social media company this year for $26.2 billion. (12) What innovation did McDonald’s consistently credit with boosting the company’s earnings this year?

***

WERE IN 2016:

(1) In 2016, 64% of Americans are happy with their financial situation, 77% with their career and 84% with their family and friends.

(2) 51% also think the economy is improving, up from 39% a year ago, yet (and ironically) we are still very worried. 74% say that the country is headed in the wrong direction and 50% think that the nation’s best days have passed.

(3) 77% say Americans are greatly divided when it comes to the most important values and 70% thought that the elections brought out the worst in people and 7% lost or terminated a friendship because of the political arguments. Still 60% say the campaign was more “interesting” than past elections.

Whom do we blame for the country’s problems?

(1) 82% say that people running the country don’t care about the ordinary Americans.

(2) 76% have an unfavorable opinion of Congress and 47% have an unfavorable opinion of the Supreme Court.

(3) President Obama gets better reviews with 55% saying that he has been a “good” or “great” President. But only 21% think Obama’s policies helped their personal financial situation, where 33% think they actively hurt their finances.

How has society changed?

(1) A record 62% now support same-sex marriage, 72% favor passing laws to protect lesbians, gay and transgender people from discrimination.

(2) 60% think marijuana should be legalized.

(3) 63% believe racial relations in the U.S. are in a bad shape, the highest number since the 1992 Los Angeles riots.

(4) 55% think things are only going to get worse.

(5) The growing role of technology in our lives is also a cause for concern as 49% believe our Smartphones and other gadgets are making us dumb and 54% say they make us less connected to our friends and family.

What are we scared of?

(1) 80% fear the terrorists will soon launch a major attach on U.S. soil.

(2) 39% fear the government will try to take away the guns and ammunition.

(3) For what it is worth, 8% are phobic of clowns.

(4) 46% think Donald Trump will drop a nuclear bomb, including 20% of his own supporters and 54% say he could cause the U.S. to default on debt.

(5) Faced with all these troubles some of us just want out. 21% would be inclined to volunteer for a wmission to Mars even if it were a high risk of dying enroute (pretty sad).

***

HOW MUCH IS A BILLION?
(1) A billion seconds ago, it was 1959.

(2) A billion minutes ago, Jesus was alive.

(3) A billion hours ago, our ancestors were living in the Stone Age.

(4) A billion days ago, no one walked on two feet.

(5) A billion dollars ago, was only 8 hours and 20 minutes, at the current rate of government spending.

***

TO THE PROGRESSIVES… extreme wealth is seen as “obscene”. I would adamantly disagree and in defense of that thought Jeff Jacoby, in the Boston Globe, suggested that the world’s eight richest men own as much wealth as the world’s poorest 3.7 billion – half the planet’s population. That’s what the international charity, Oxfam, tells us, calling the vast income gap “a moral and social calamity”. It’s a striking statistic, but it’s also irrelevant. To begin with, “the Oxfam 8” – Microsoft Bill Gates, investor Warren Buffett, telecom mogul Carlos Slim, Facebook’s Mark Zuckerberg, clothing magnate Amancio Ortega, Amazon creator Jeff Bezos, Oracle co-founder Larry Ellison, and New York City’s entrepreneur ex-mayor Michael Bloomberg are not parasites exploiting the masses. Through hard work and ingenuity, they have created enterprises that improve the lives of billions; moreover, each gives massive amounts to charity. Meanwhile, thanks to capitalism, “the world’s poor have been climbing out of poverty at the fastest rate in human history”. Over the past 30 years, the number of people in extreme poverty has dropped by 75% or 1.2 billion people. Liberals keep insisting the extreme wealth is “obscene” as if the economy were a zero-sum game in which people get rich only if the poor get poorer. That’s not true “wealth is good, and the more people who can create and earn it, the better”.

***

IT IS NO ACCIDENT… that Nielson, Hoover & Company is the largest provider of surety credit in the Southeast United States. With all the potential work, particularly in Florida in 2017, there will be plenty of opportunity to stretch work programs and consequently stretch the need for surety credit. No one does capacity better than we do…not convinced, give us a call and we will prove otherwise.

***

PARTING SHOT: “I come in peace. I didn’t bring artillery. But I am pleading with you, with tears in my eyes: If you f–k with me, I’ll kill you all.” – James ‘Mad Dog’ Mattis (from a speech to the Iraqi Army)

Charles J. Nielson CJN/cb

2016-02 Bond Newsletter

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2016-02

 THE COLOR OF OUR NEWSLETTER REFLECTS MY MOOD… as it relates to the upcoming election.  For those of you who have read our previous newsletters, you know that I am politically just slightly left of Attila the Hun.  I feel politically claustrophobic because no matter which way I turn feel trapped in a political nightmare.  I haven’t felt this bad since Barry Goldwater lost to Lyndon Johnson.

 I know exactly what Hillary Clinton is and what she represents and I find her the most unacceptable candidate that has been on the ballot in my lifetime.  I have absolutely no idea what Donald Trump represents and even though he is running as a Republican and does share some of my Republican populous views, he wanders too far off of the path on certain issues.  I am willing to throw the dice and go for Donald Trump.  As unacceptable as he may seem in some ways, I seriously doubt he is capable of screwing up the next four years in a way that only Hillary Clinton can and probably will.

 If you had asked me six months ago, three months ago or even a month ago, I would have said that Trump didn’t stand a chance, but once again it appears that my prognostications as it relates to this election may continue to be wrong as they have over the last nine months.  Therefore, I am taking the cowards way out and truthfully indicating that I have no idea.  Frankly, it is too close for anyone to call at this point in time.

***

BASED UPON THE FAILED PRESIDENCY OF THE LAST EIGHT YEARS AND THE POTENTIAL DISASTER THAT WE ARE FACING FOR THE NEXT FOUR YEARS… most of the population will be seeking liquid relief in one form or another.  In this country, beer is the relief most often self-administered in times of stress.

Based upon that, as a service to the bond newsletter, I thought that the least I could do would be to educate our readers on this essential liquid.

BEER IS THE THIRD MOST POPULAR BEVERAGE IN THE WORLD…coming in behind tea and water.  Monks brewing beer in the Middle Ages were all allowed to drink five pints of beer a day.  Bavaria still defines beer as a staple food.  The oldest known written recipe known to man is for beer.

In English pubs, ale is ordered by pints and quarts.  Therefore, in old England, when customers got unruly, the bartender used to yell out at them to mind their own pints and quarts and settle down.  That is where we got “mind your P’s and Q’s.”

It is a well documented fact that one of the reasons the Pilgrims landed at Plymouth Rock in 1620, rather than sail further south to a warmer climate, was because their supplies were dwindling, “especially our beer.”

ALL BEER CAN BE DIVIDED INTO TWO CATEGORIES: ALES AND LAGERS.  There are then numerous subcategories of different “styles” that fall under both categories:

  • ALE – Ales are top fermented beers that are brewed at warmer temperatures. They tend to be fairly complex and flavorful with fruit and/or floral tones.  Most ales are full-bodied and rich in taste.
  • LAGER – Lagers are bottom-fermented and brewed at lower temperatures. They are typically easy drinking, light in body and mild in taste, with a clean flavorful and crisp finish.

 THERE ARE VARIOUS STYLES OF BOTH LAGER AND ALES:

 AMBER LAGER – full flavored with more hops, malt and overall character than pale lagers.

  • AMERICAN PALE ALE – gold to amber in color with flavor and aroma centered around the citrus and pine character of American hops.
  • BELGIAN BLONDE ALE – light-colored Belgian ale with a spicy hop nose and perfumy or honey-like aroma. Light complex finish.
  • BELGIAN STRONG ALE – can vary from pale to dark brown in color and is medium to full-bodied, with a high alcohol character. Includes Tripels, Dubbels and Abbey ales.
  • BELGIAN WHITE – also known as “Witbier” or “Weissbier,” white beers are made from wheat.
  • BOCK – a strong, malty lager typically of German origin with a low hop presence and rich, toasty malt characteristics.
  • BROWN ALE – ranges from deep amber to brown in color, with caramel and chocolate notes. They tend to be strong and malty with an even level of “nuttiness.”
  • ENGLIGH ALE – a golden to reddish-amber ale with enhanced hop bitterness, balanced with malty aromas.
  • HEFEWEIZEN – a German style of wheat beer. “Hefe” means “with yeast,” which adds unique flavors of banana, apple or cloves with a dry, tart edge and some spiciness.
  • INDIA PALE ALE – commonly abbreviated as “IPA,” this version of a pale ale employs a significant amount of hops originally to help it make the voyage overseas. The added hops give a strong floral note with high bitterness, complementing a higher alcohol content.
  • PALE LAGER – pale to golden colored lagers that are dry, clean-tasting and crisp with subtle flavors.
  • PILSNER – a type of pale lager with a more prominent hop character that takes its name from the city of Plzen in the Czech Republic. Nine out of ten beers consumed today are based on the original pilsner from 1848.
  • STOUT – Stouts are dark beers made using roasted malt or barley. The dark roast gives the beer its unique toasty or coffee-lake taste.
  • TRIPEL – Originating from Trappist Monks in Belgium, the Tripel is complex and wonderful creation. Using “triple” the malts with an even balance of hops, these beers are deceptively strong.  Bright and gold in color with a spicy, floral and slightly sweet finish.

 “Without question, the greatest invention in the history of mankind is beer.  Oh, I grant you that the wheel was also a fine invention, but the wheel does not go nearly as well with pizza.” – Dave Barry

 “I feel sorry for people who don’t drink.  When they wake up in the morning, that’s as good as they’re going to feel all day.” – Frank Sinatra

***

 ONE OF THE MOST IMPORTANT LEGAL ISSUES… that we deal with on a continual basis is the issue relating to the Statute of Limitation in our state.  Four years ago in a 2012 bond newsletter I outlined some of the issues with the Statute of Limitations.  Because these issues continue to plague us, many times because of lack of understanding, I am going to take the liberty of repeating that article to hopefully give some clarity to the issues with the Statute of Limitations:

 

  • The relevant Statute of Limitation is found in Section 95.11(2)(b), Florida Statutes which provides for a five (5) year Statute of Limitation for actions on any contract or written instrument (obviously a bond is a written instrument) (Note: The prevailing case is Federal Insurance v. Southwest Florida Retirement). It is important to understand that 95.11(2)(b) refers to Performance Bonds, not statutory Payment Bonds.  Therefore, the Statute of Limitation on any Performance Bond in the State of Florida will have a five (5) year limit on the ability of any potential claimant to file a claim against the contractor or the surety.

 

  • There are two (2) Florida Statutes that defines the Statute of Limitations in the State of Florida for Payment Bonds. The statutes are 713.23 and 255.05.  These statutes limit the liability of the surety to lawsuits filed within one year of the completion of the work by the claimant.  These are obviously Statutory Bonds, not Common Law Bonds.  Therefore, a subcontractor, for example, working on a project where the General Contractor provided a Statutory 713.23 or 255.05 bond to the project owner is subject to the one year Statute of Limitation for filing suit under the bond with certain limited exceptions under 255.05.  In the event that a subcontractor has furnished a payment bond to the General Contractor, claimants under the subcontractor’s payment bond have five (5) years to advance a lawsuit.  UNLESS the General Contractor has also furnished a payment bond on that same project, in which event the statute of limitations is likewise limited to one (1) year.  Under Section 713.23(1)(a), the statute states that “any form of bond given by a contractor conditioned to pay for labor, services and material used to improve real property shall be deemed to include the condition of this subsection.”  Therefore, whether a bond in the State of Florida given to a contractor conditioned to pay for labor, services and material refers to 713.23 or not, it is still deemed to be a Statutory Payment Bond.

 

  • Various municipal owners have been inserting Florida Statute 95.11(3)(c) in their bond forms. 11(3)(c) is both a Statute of Limitation and a Statute of Repose.  It limits the right of the owner to sue the contractor (and some may argue, the surety as well) to ten (10) years.  The typical reason for including this statute would be to give extended coverage for latent defects.  Under 95.11(3)(c), the owner has four (4) years from the time of discovery of a latent defect to sue the contractor and/or surety company under this statute, but they are limited to ten (10) years to make any claim.  As an example, if three (3) years after the project was completed, the owner discovers a latent defect and notifies the contractor, the owner still has four (4) years in which to sue for latent defects.  Under that scenario, the total time that is allotted under 95.11(3)(c) would be seven (7) years.  On the other hand, if the latent defect is found within the ninth year after the building is complete, there is only one year to sue based upon the ten (10) year limit of liability under 95.11(3)(c).  As in the case of 95.11(2)(b), this statute refers to the Performance, not the Payment Bond.  Latent defect issues are performance issues, not payment issues.  If  it is a Statutory 713.23 Payment Bond, the right to sue is limited to one (1) year as it is in the case of a 255.05 Statutory Payment Bond (public projects).  From a common sense standpoint, a latent defect issue would not be a payment issue, but a performance issue, so adding that statute to the Payment Bond would make no sense.

 

         We are all aware of the fact that the surety industry has not been willing to deal with the ten (10) year limit to bring suit against them under 95.11(3)(c).  There are a number of ways to address the issue.  The most obvious is to delete that from any Performance Bond that we issue.  The second approach has been to maintain the statute in the Performance Bond, but to limit the surety’s liability to five (5) years (Miami-Dade County).  This, however, still leaves the contractor liable for ten (10) years, five (5) of those will not be accompanied by their “surviving partner” (surety).

 

It is a shame to be enjoying a great retirement ten (10) years later and have a subpoena served to you on the golf course for a potential latent defect on a project you completed ten (10) years before.  It is a risk that each contractor has to assess on their own.

 

***

 THERE ARE A NUMBER OF WAYS YOU CAN DEFINE THE SOCIAL AND ECONOMIC CONDITION …of our society.  I think the following statistics are a real eye opener to what we have become:

 

  • California – New Mexico – Mississippi – Alabama – Illinois – Kentucky – Ohio – New York – Maine – South Carolina.

 

These 10 States now have More People on Welfare than they do Employed!!!

 

  • In July, the Senate Budget Committee reports that fiscal year 2012, between food stamps, housing support, child care, Medicaid and other benefits, the average U.S. Household below the poverty line received $168.00 a day in government support. What’s the problem with that much support?  Well, the median household income in America is just over $50,000, which averages out to $137.13 a day.  To put it another way, being on welfare now pays the equivalent of $30 an hour for 40 hour week, while the average job pays $24.00 an hour.

 

  • A recent “Investor’s Business Daily” article provided statistics from a survey by the United Nations International Health Organization:

 

  • Percentage (%) of men and women who survived a cancer five years after diagnosis:

U.S.                  65%

England            46%

Canada             42%

  • % of patients diagnosed with diabetes – received treatment within 6 months:

U.S.                  93%

England            15%

Canada             43%

  • % of seniors needing hip replacement who received it within 6 months:

U.S.                  90%

England            15%

Canada             43%

  • % referred to a medical specialist who see one within one month:

U.S.                  77%

England            40%

Canada             43%

  • Number of MRI scanners (a prime diagnostic tool) per million people:

U.S.                  71

England            14

Canada             18

  • % of seniors (65+), with low income, who are in “excellent health”:

U.S.                  12%

England            2%

Canada             6%

  • And now…for the last statistic: National Health Insurance?

U.S.                  NO

England            YES

Canada             YES

 

  • Check the last set of statistics!! The percentage of each past president’s cabinet…who had worked in the private business sector…prior to their appointment to the cabinet.  You know what the private business sector is: a real-life business…not a government job.  Here are the percentages:

 

38%      T. Roosevelt

40%      Taft

52%      Wilson

49%      Harding

48%      Coolidge

42%      Hoover

50%      F. D. Roosevelt

50%      Truman

57%      Eisenhower

30%      Kennedy

47%      Johnson

53%      Nixon

42%      Ford

32%      Carter

56%      Reagan

51%      G. H. Bush

39%      Clinton

55%      G. W. Bush

  8%       Obama

 

         This helps explain the bias, if not the incompetence, of this current administration:  ONLY 8% of them…have ever worked in private business!  And these people are trying to tell our corporations how to run their business?  How can the president of a major nation and society, the one with the most successful economic system in world history, stand and talk about business when he’s never worked for one?  Or about jobs when he has never really had one?  And, when it’s the same for 92% of his senior staff and closest advisers?

 

         They’ve spent most of their time in academia government, and/or non-profit jobs or as “community organizers.”

***

 

IT IS AMAZING AS YOU LOOK ACROSS THE COUNTRY… how well many of the states and cities have done economically and socially under the Republican administration.  It is also interesting to note how many states and cities are in both economic and social turmoil under liberal Democratic rule.  No comparison makes that more obvious than what I will call A TALE OF TWO CITIES:

 

 

CHICAGO (DEM)

HOUSTON, TX (REP)

Population

2.7 million

2.15 million

   

Median HH Income

$38,600

$37,000

   

% African-American

38.9%

24%

   

% Hispanic

29.9%

44%

   

% Asian

5.5%

6%

   

% Non-Hispanic White

28.7%

26%

 

Pretty similar until you compare the following:

 

CHICAGO, IL

HOUSTON, TX

   

Concealed Carry – Legal

No

Yes

   

# of Gun Stores

None

184 Dedicated gun stores plus 1500 – legal places to buy guns – Wal-Mart, K-mart, sporting goods, etc.

 

 

 

Homicides, 2012

1,806

207

 

 

 

Homicides per 100K

38.4

9.6

 

 

 

Average January high temperature (F)

31

63

 

Conclusion – Cold weather causes murders.  This is due to global warming.

 

***

 

AS A CELEBRATION TO THE BEGINNING OF FOOTBALL SEASON… I am including some football quotes/humor:

 

  • “I make my practices real hard because if a player is a quitter, I want him to quit in practice, not in a game.” – Bear Bryant / Alabama
  • “It isn’t necessary to see a good tackle, you can hear it!” – Knute Rockne / Notre Dame
  • “The man who complains about the way the ball bounces is likely to be the one who dropped it.” – Lou Holtz / Arkansas –Notre Dame
  • “When you win, nothing hurts.” – Joe Namath / Alabama
  • “A school without football is in danger of deteriorating into a medieval study hall.” – Frank Leahy / Notre Dame
  • “There’s nothing that cleanses your soul like getting the hell kicked out of you.” – Woody Hayes / Ohio State
  • “In Alabama, an atheist is someone who doesn’t believe in Bear Bryant.” – Wally Butts / Georgia
  • “I never graduated from Iowa. But I was only there for two terms – Truman’s and Eisenhower’s.” – Alex Karras / Iowa
  • “Football is NOT a contact sport, it is a collision sport. Dancing IS a contact sport.” – Duffy Daugherty / Michigan State
  • After USC lost 51-0 to Notre Dame, his post-game message to his team was, “All those who need showers, take them.” – John McKay / USC
  • “The only qualifications for a lineman are to be big and dumb. To be a back, you only have to be dumb.” – Knute Rockne / Notre Dame
  • “I’ve found that prayers work best when you have big players.” – Knute Rockne / Notre Dame
  • Ohio State’s Urban Meyer on one of his players: “He doesn’t know the meaning of the word fear. In fact, I just saw his grades and he doesn’t know the meaning of a lot of words.”
  • Why do Tennessee fans wear orange? So they can dress that way for the game on Saturday, go hunting on Sunday and pick up trash on Monday.
  • What does the average Alabama player get on his SATs?
  • How many Michigan State freshmen football players does it take to change a light bulb?   That’s a sophomore course.
  • What do you say to a Florida State University football player dressed in a three-piece suit? “Will the defendant please rise.”
  • How can you tell if a Clemson football player has a girlfriend? There’s tobacco juice on both sides of the pickup truck.
  • Why did the Tennessee linebacker steal a police car? He saw “911” on the side and thought it was a Porsche.
  • How do you get a former Illinois football player off your porch? Pay him for the pizza.

 

***

 

IN OUR WORLD… capacity and service are the two ingredients that have made us the number one surety brokerage firm in the southeast United States.  If we currently do not have the privilege of servicing your surety bond credit needs, let’s talk.

***

 

PARTING SHOT:

 

“Opportunity is missed by most people because it is dressed in overalls and looks like work” – Thomas Edison

 

 

Charles J. Nielson

CJN/cb

2015-02 Bond Newsletter

by |

WE MIGHT AS WELL GET IT OVER WITH… the question on everyone’s mind, both Republican and Democrat, is who will be the Republican nominee for President? Although the general election is a year away, you can be certain that we will know long before then who the Republican nominee will be. Unless Hillary Clinton is indicted for issues relating to the email scandal, or there are some extraordinary development or revelation regarding the Benghazi situation, Hillary Clinton is the presumptive Democratic nominee. First of all, there is an attitude among many Democratic faithful that it is now “her turn”, particularly after the beating that she took at the hands of Obama. Add to that the power of the Clinton political machine and it is easy to see why she has both the backing and support that she currently does. Because of that, there has not been a rush among potential Democratic contenders to seek the nomination. The only one with any stature at all is Bernie Sanders and in my opinion he is not electable. He does have the enthusiastic support of the far left, but he would fall far short in a national election. 

No one seems to like Hillary Clinton that much and almost 70% of those polled think that she is dishonest. No doubt about the fact that she has no personal charisma and is highly unlikable, yet she stands as the presumptive Democratic nominee…go figure.

On the Republican side, no one six months ago would have or could have predicted what is taking place as it relates to potential Republican nominees. When Donald Trump announced his candidacy, most did not take him seriously and many felt offended that such a man could actually seek the Presidency of this great country. Since that time, Trump’s candidacy has become more of a reality and even though some refuse to accept the fact that he could be nominated or even elected as President, the truth is both may be the case.

To understand how and why this is taking place, we will have to recognize that this is not a political issue, it’s a social issue. We Americans, for the last 200 years have felt, and rightly so, that we are “an exceptional people”. We have proved it fiscally, militarily and socially. No country has come even close to providing its citizens with the necessities of life, the freedoms that we enjoy each day, the opportunities financially and socially and most importantly, the lack of any government tyranny in our lives. This is, without question, an exceptional country and we are an exceptional people. 

When Barack Obama was elected President, he did so apologizing to the world for the way that America had conducted itself domestically and internationally. He promised that we would no longer be the bullies that we had been and that we would lead the fight for freedom from behind, which is another way of saying we will no longer lead.

Most of us now feel that Obama has marginalized who we are and what we stand for. It is impossible for us not to feel that we are an exceptional country and an exceptional people and when we look at our place in the world now, most of us are upset and highly indignant.

Because our national dignity has been compromised, we want it back and we feel that the only way we can get it back is to elect a “winner”. We are frustrated with the gridlock in Washington and frankly we want a John Wayne or a Clint Eastwood figure to “kick some butt” and bring back our national dignity. We feel like it is our God given right to lead and most of us are tired of feeling compromised.

In my opinion, if the candidacies of Donald Trump and Ben Carson lose traction and steam, the most likely insider to win the nomination would be Marco Rubio.

It takes courage at this point in the election cycle to make any predictions. In the 2012 Presidential campaign cycle, former Texas Governor, Rick Perry, was leading the Republican field by 1.7 points. At this point in 2008 cycle, Hillary Clinton was leading Barack Obama by 15.6 points, while Rudy Giuliani was leading the GOP field by 10.7 points. Nothing on either the Republican or Democratic side is like anything that we have ever experienced before, so only time will tell.

 

FOR GLOBAL WARMING DOUBTERS… please note the following article in the Washington Post (important to read the article through the end):

The Arctic Ocean is warming up, icebergs are growing scarcer and in some places the seals and finding the waters too hot, according to a report to the Commerce Department yesterday from Consulate, at Bergen, Norway. Reports of fishermen, seal hunters and explorers all point to a radical change in climate conditions and hitherto unheard-of-temperatures in the Arctic zone. Exploration expeditions report that scarcely any ice has been met as far North as 81 degrees 29 minutes.

Soundings to a depth of 3,100 meters show the Gulf Stream still very warm. Great masses of ice have been replaced by moraines of earth and stones, the report continued, while at many points well known glaciers have entirely disappeared.

Very few seals and no white fish are found in the Eastern Arctic, while vast shoals of herring and smelts, which have never before ventured so far north, are being encountered in the old seal fishing grounds. Within a few years it is predicted that due to ice melt the sea will rise and make most coastal cities uninhabitable.

 

THIS REPORT WAS FROM NOVEMBER 2, 1922 AS REPORTED BY THE A.P. AND PUBLISHED IN THE WASHINGTON POST 90 YEARS AGO. I think we all want to treat our planet with respect utilizing the resources that have been made available to us with wisdom and understanding. We, however, cannot let our government utilize a natural reoccurring climate change as a basis for controlling and taxing unnecessarily the citizens of this country. There are countries, such as China, where extreme pollution is causing death and unnecessary environmental damage. This needs to change.

We need to be cautious about how we react to the data supposedly gathered by scientists around the world. We know for certain that the earth has not warmed on a consistent basis as the reports originally prognosticated. Is our climate getting warmer? Perhaps it is, but if you go back to the mid-70s, science was predicting that we were going to be entering another ice age. Admittedly July 2015 was officially the hottest month since records began in 1880 with an average temperature of 1.46 degrees higher than the average for the twentieth century. It was 0.14 degrees above the previous hottest month which occurred in 1998. Since 1998, there have been years in which the temperatures have gone down and others in which they have gone up, so any predictions by the scientists are highly suspect and once again, we need to careful not to give our government too much power to regulate and tax based upon very inconclusive climate information. 

“Never argue with an idiot, because bystanders don’t know who the idiot is.” – Mark Twain

“Nobody will ever win the battle of the sexes. There is just too much fraternizing with the enemy.” – Henry Kissinger

I know I am guilty of taking on the Democratic Party, so as a matter of equality, I would like to provide you with quotes from great orators of the Democratic Party of the past and of the great orators of the Democratic Party today. First, the past:

“One man with courage makes him a majority.” – Andrew Jackson

“The only thing we have to fear is fear itself.” – Franklin D. Roosevelt

“The buck stops here.” – Harry S. Truman

 “Ask not what your country can do for you; ask what you can do for country.” – John F. Kennedy

Great orators of the Democratic Party today:

“It depends on what your definition is of ‘is’?” – President William Jefferson Clinton

“Those rumors are false. I believe in the sanctity of marriage.” – John Edwards

“What difference does it make?” (RE: Benghazi) – Hillary Clinton

“I invented the Internet.” – Al Gore

“America is, no longer, uh, what it, uh, could be, uh, what it once was, uh, and I say to myself, uh, I don’t want that future, uh, for my children.” – Barack Obama

“I have campaigned in all 57 states.” – Barack Obama (quoted 2008)

“You don’t need God anymore, you have us Democrats.” – Nancy Pelosi (quoted 2006)

“Paying taxes is voluntary.” – Senator Harry Reid

 “Bill is the greatest husband and father I know. No one is more faithful, true and honest than he is.” – Hillary Rodham Clinton (quoted 1998)

“You have a business. You didn’t build that. Someone else did!” – Barack Obama (quoted 2012)

“We just have to pass the healthcare bill to see what is in it.” – Nancy Pelosi (quoted March 2010 – as one doctor said: That is also the perfect definition of a stool sample)

I am sure it gives all of us a sense of comfort to know that we have such brilliant minds in charge of our once-great country. As John Wayne once said: “Life is tough! It’s even tougher when you are stupid.”

 

WE ALL KNOW THAT THE INFORMATION CONTAINED IN MY BOND NEWSLETTER IS USELESS … so adding another section of useless facts certainly does not diminish its value:

  1. In Ancient Greece, women counted their age from the date in which they were married, not from the day they were born.
  2. In Egypt, in 1500 B.C. a shaved head was considered the ultimate in feminine beauty. Their women removed every hair from their heads with a special gold tweezers and polished their scalp to a high sheen with buffing cloths.
  3. In Elizabethan slang, the term “to die” meant to have an orgasm.
  4. In India, it costs less to have sex with a prostitute than it does to buy a condom.
  5. In medieval Thailand, they had movable type printing presses. The type was made from baked oxen dung.
  6. As most of you have probably already figured out, in space, astronauts can’t cry because there is no gravity, so the tears can’t flow.
  7. In the United States, a pound of potato chips cost 200 times more than a pound of potatoes.
  8. Leonardo Da Vinci could draw with one hand and write the other – at the same time.
  9. If #8 above was not amazing enough, Leonardo Da Vinci spent 12 years painting the Mona Lisa’s lips.
  10. Most guys who wear jeans have had a pair of Levi 501 Jeans. Ever wonder where the number 501 comes from? 501 was the original stock number for the original jeans in the first Levi’s store.
  11. Shakespeare was the first to use certain words that are now common, including – hurry, bump, eyeball and anchovy.
  12. The state with the highest percentage of people who walk to work: Alaska.
  13. The animal that can last the longest without water is the rat.
  14. A hippopotamus can run faster than a man.
  15. 100,000 years ago, the human gestation period was 15 months rather than the current 9 months.
  16. Most useful and interesting of all useless facts is that 54% of Americans prefer to fold their toilet paper rather than wad it.
  17. It is virtually impossible to sneeze with your eyes open.
  18. February 1865 is the only month in recorded history not to have a full moon.
  19. Ever wonder why tiger sharks are aggressive? The embryos of tiger sharks fight each other while in their mother’s womb, the survivor being the baby shark that is born.
  20. The electric chair was invented by a dentist. No wonder it took 8 minutes for the first victim electrocuted to die.
  21. The Eisenhower Interstate System requires that one mile in every 5 miles must be straight. The straight sections are usable as air strips in times of war or other emergencies.
  22. The inventor of the flushing toilet was Thomas Crapper.
  23. The phrase “rule of thumb” is derived from an old English law which stated that you could not beat your wife with anything wider than your thumb.
  24. The word “girl” appears only once in the bible.
  25. The word “Hallelujah” is common to all languages. It is never translated.

 

LIVING IN MIAMI-DADE COUNTY IT IS EASY TO TAKE THE CITY OF MIAMI FOR GRANTED… but for the past eight (8) years, Knight Frank distributes an annual Wealth Report which is a collection of data about the global UHNWI (Ultra High Net Worth Individuals), defined as those who have US$30 million or more in net assets. In the most recent 2014 report, the cities that matter most to UHNWI’s were:

  1. London – Condos are selling in London for $6,000 psf.
  2. New York – Condos are selling for $4,000 psf.
  3. Singapore – Condos are selling for $1,500 psf.
  4. Hong Kong – Condos are selling for $4,500 psf.
  5. Geneva – Condos are selling for $3,000 psf.
  6. Shanghai – Condos are selling for $2,000 psf.
  7. Miami, Florida – Condos are selling for $800 psf.

What is most interesting about the report is that in 2009 Miami was the 29th most important city, in 2011 Miami was still #29 in the same rating, but in 2013 Miami’s ranking raised to #8 and in 2014 Miami is the 7th most important city to UHNWI’s.

There is no question about the fact that the condo market is the main real estate financial driver for our real estate/construction economy, in not only Miami, Florida, but for Miami-Dade County as a whole. The Miami Herald published an article in May of 2005 projecting that 62,000 condos were planned for development within the Brickell Avenue/Downtown Miami corridor. In actuality, just 17,502 of those proposed 62,000 condos were developed, less than 40% of what is projected.

In tracking the data of Miami – South Florida current cycle, we found that the number of proposed new condos is, once again, different from the number of condos that have actually been brought to market for sale thus far. Currently, the estimated number of new “proposed” condos East of I-95 in Miami-Dade, Broward and Palm Beach is between 38,000 and 45,000 units. Of those, approximately 16,000 to 18,000 have been brought to market for sale since the last business quarter of 2011 (42% of the 38,000 “proposed”). To date over 62% of the inventory has been sold.

Although there is reason to believe that the case of building and selling condominiums in Miami-Dade, Broward and Palm Beach County may be slowing, there is less than 10,000 new condo units remaining to be sold and this is approximately 18 months of new condo inventory for sale, according to historical absorption patterns.

 Back to the vitality of the City of Miami for a moment. In North America, the top five (5) cities of importance to UHNWI’s are:

  1. New York
  2. Miami
  3. Washington, D.C.
  4. San Francisco
  5. Toronto

There is no questions about the fact that Miami has long outgrown its value as simply a depository for scared South and Central American money and has become a worldwide destination. Based upon the last information I was able to obtain, last year over 90% of the condos sold in Miami-Dade County were sold to other than US Citizens.

Our position as a banking center for the Southern hemisphere is unquestioned. 53 banking offices hold $12 billion in domestic deposits and $6.7 billion in non-resident alien deposits on Brickell Avenue, and nearly $7 billion in foreign money sits on the balance sheet in greater Miami banks. Miami is the second most popular banking hub in the United States after New York City. Currently home to over 60 international banks and nearly 100 alternative investment companies, Miami’s thriving financial district is attracting financial institutions from around the world.

 Even the financial tycoons who aren’t bringing their actual business to Miami are bringing their money here in a major way – through large real estate purchases. Goldman Sachs CEO Lloyd Blankfein and Apollo Global Management’s Leon Blac have both reportedly purchased eight (8) figure residence in Miami Beach.

Not only is Miami an international hub for condominiums, but Miami vacancy rate for rentals is currently the third lowest in the nation.

Miami is not the only city in the State of Florida that is growing. The State of Florida, depending on which demographic study you want to believe, will grow faster in raw population than any other state in the Union in the next twenty-five (25) years. In 1914, Florida was the 33rd most populated state in the United States. In 1914, New York, Texas and California were the top three (3). In 1967, the year I moved to Miami, Florida was the 15th most populated state in the country with New York, California and Texas as the top three (3) most populated states. In 2006, Florida was the 4th most populated state in the nation with California, Texas and New York, in that order, as the three (3) most populated. In 2015, Florida has become the 3rd most populated state in the country, with California and Texas as #1 and #2. Florida replaced New York as the 3rd most populated state. This trend will continue unabated for the next twenty-five (25) years at least. Some are projecting, on the low side, that in 2040 Florida will have a population of 26 million, but there are other projections stating that Florida will double its population in the next twenty-five (25) years and that Florida will have a population of close to 40 million people. I predict that 40 million will be closer than 26 million to the actual population of Florida in 2040.

As far as I am concerned, Miami-Dade County is as close to paradise as one could get. Forbes Magazine named Miami “America’s cleanest city” because of its year round air quality, vast green spaces and clean drinking water. This makes Miami an extremely attractive city to live in. The tropical climate is inviting for all types of outdoor lifestyle activities and events, as we all know.

Miami-Dade County is the principal economic engine that drives the economy of Florida. There are many other beautiful cities and areas in Florida that enjoy a very brisk economy and a wonderful way of life for those living in those areas. Without question, Florida is the most desirable state in the country and for that reason, we will grow more in raw population than any other state in the Union in the next twenty-five (25) years.

 

WHERE YOU LIVE MAKES A DIFFERENCE… you may have heard on the news about a Southern California man who was put under 72-hour psychiatric observation when it was found he owned 100 guns and allegedly had 100,000 rounds of ammunition stored in his home. The house also had a secret escape tunnel.

By California standards, someone owning 100,000 rounds was considered mentally unstable. Not so in other areas around the country. Please note:

  1. In Michigan, he would be called a Detroit resident who owns a pharmacy.
  2. In Arizona, he would be called an avid gun collector.
  3. In Arkansas, he would be called a novice gun collector.
  4. In Utah, he would be called modestly well prepared, but they would probably reserve judgment until they made sure that he had a corresponding quantity of stored food.
  5. In Kansas, he would be a guy down the road you would want for a friend.
  6. In Montana, he would be called the neighborhood “go-to-guy”.
  7. In Idaho, he would be called a likely gubernatorial candidate.
  8. In Georgia, North Carolina, Virginia, West Virginia, Louisiana, Mississippi, Alabama, Missouri, Wisconsin and Kentucky, he would just be a deer hunting buddy.
  9. In Texas, he would just be “bubba” who is running a little low on ammo.

 

BEING POLITICALLY CORRECT… has been essential in the last forty (40) years if you were to be taken seriously as a candidate to any national office. Thanks to the current Republican front runner, Donald Trump, being politically correct does not seem to be that important during this presidential election cycle. As a matter a fact, you could well accuse many of our past iconic leaders of having no sensitivity in that regard. Please note four (4) telegrams between then President, Harry Truman and General Douglas MacArthur on the day before the actual signing of the World War II surrender agreement with the Japanese in September of 1945. The contents of these four (4) telegrams are exactly as received at the end of the war, not a word has been added or deleted!

  1. Tokyo, Japan

       0800-September 1, 1945

      To: President Harry S Truman

      From: Genera D A MacArthur

      Tomorrow we meet with those yellow-bellied bastards and sign    
      the Surrender Documents, any last minute instructions?

2.  Washington, D.C.

      1300-September 1, 1945

      To: D.A. MacArthur

      From: H S Truman

      Congratulations, job well done, but you must tone down your       
      obvious dislike of the Japanese when discussing the terms of the
      surrender with the press, because some of your remarks are
      fundamentally not politically correct!

3.  Tokyo, Japan

      1630-September 1, 1945

      To: H S Truman

      From: D A MacArthur and C H Nimitz

      Wilco Sir, but both Chester and I are somewhat confused, exactly
      what does the term politically correct mean?

4.  Washington, D.C.

      2120-September 1, 1945

      To: D A MacArthur/C H Nimitz

      From: H S Truman

      Political Correctness is a doctrine, recently fostered by a
      delusional, illogical minority and promoted by a sick mainstream
      media, which holds forth the proposition that it is entirely
      possible to pick up a piece of shit by the clean end!

 

USELESS, BUT INTERESTING

  1. For the first time since 2009, the NFL, in September, went an entire calendar month without any of its players being arrested. The most recent arrest came on August 26, 2015.
  2. Over the past couple of months, the most asked questions about 2016 Presidential candidates on Google were from people who wanted to know Hillary Clinton’s age, Jeb Bush’s height and Donald Trump’s net worth.
  3. Of the 21 countries that use the Euro as their currency, almost half have seen their economy shrink in inflation – adjusted terms, since 2007. By contrast, not one of the “floater” countries – European nations that didn’t adopt the Euro – has had its economy shrink over the same period.
  4. At $275 billion, Facebook’s market value is now slightly higher than General Electric’s $273 billion. Facebook is still dwarfed by the 123 year old industrial titan in other ways, however. GE reported $149 billion in sales last year to Facebook’s $12.5 billion and GE employed 300,000 people to Facebook’s 9,200. Financially GE dwarfs Facebook yet, in market value, Facebook is slightly more valuable than General Electric. The reason: stock prices are determined by financial value X emotional value. No one particularly loves GE, but hundreds of millions of people around the world love Facebook. It is that love, not Facebook’s sales or profits, that has created the $275 billion market value.

 

“CAPACITY” IS THE SINGLE MOST IMPORTANT WORD IN TODAY’S SURETY MARKET. Based upon the tremendous construction economy we have in Florida, the greatest challenges that relates to your surety credit may be one of aggregate capacity. At Nielson, Hoover & Company, we pride ourselves in being the largest surety broker in the Southeast United States and for very good reason. Our ability to deal with the surety capacity needs of our clients has been a key factor in our size and growth. We deal with and write with more surety markets than any other surety broker in the Southeast United States. We write business with over 64 different surety markets. This allows us to find that surety market that will address the needs of each client we have the opportunity to work with.

 If you are finding any resistance in obtaining the aggregate surety credit that your company needs, please do not hesitate to call any one of our offices. Nielson, Hoover & Company is a surety broker and a surety broker only. We do not write insurance, we do not deliver pizza, we only write bonds and we do it better than anyone else.

  

MY ADVICE IS WORTH WHAT YOU ARE PAYING FOR IT… but if you do not have flood insurance, you are at risk no matter where you are living. Many South Carolina homeowners who suffered flooding after devastating storms are in for an unpleasant surprise as the waters recede. Much of the residential damage caused by Hurricane Joaquin is most likely not going to be covered by insurance. Only 14% of Americans are insured against flooding. Flood insurance is written almost exclusively by the National Flood Insurance Program. The average premium is approximately $700.00 per year, but many homeowners in lower risk areas balk at the added cost, even though more than 20% of flood claims come from people outside of high risk areas. While most disasters are covered under the standard homeowner’s policy, flooding is not.

The terrible rainstorms in South Carolina serves as a solid reminder to make sure you are properly covered. In addition, the recent rains in Southern California have also had a devastating effect on many homeowners there. If your home can be destroyed in drought stricken Southern California by floods, it can be destroyed anyplace. Nearly all flood policies require a 30-day waiting period before becoming effective. Federal flood insurance covers up to $250,000 of your home and up to $100,000 for personal possessions. This is not a pitch for additional business, Nielson, Hoover & Company does not sell flood insurance. Just a word to the wise. If you don’t have it, the approximate $700.00 a year you will spend may be the best investment you can make.

 

PARTING SHOT:

“Any man who thinks he can be happy and prosperous by letting the government take care of him had better take a much closer look at the American Indian.” – Henry Ford

Charles J. Nielson

2015-01 Bond Newsletter

by |

2015-01

BOOM OR BUST… seems to be the central issue in every economic discussion. There is no question about the fact that 2014 was a “BOOM” in our South Florida market. There are naysayers who feel that we are headed for another “BUST”, particularly in the condo marketplace. The truth is, we have never had a condo bust in terms of over-building. What we experienced in 2008 was a national financial crisis that affected all markets including the real estate market. The approximate 10,000 unsold condo units that were on the market when our economy went over the cliff in the second half of 2008 were absorbed within the next couple of years, long before the end of the recession. So the answer to “Are we over-building condos” is “No” as long as we don’t experience another national economic crisis. Our condominium market is worldwide and unless we dive into a national or worldwide recession, there is a market for all the condominium units that we can build.

HOW LONG IS THE BOOM GOING TO LAST? First of all, no economic growth is consistently linear. In the best of times, it is always three steps forward and one step back. We have had and will always have every 7-8 years some retraction (recession) in our economy. In those times, growth may flatten or retract for a short period of time.

Let’s look at Florida not in the next 3-5 years, but for the next 25 years. In that regard, please note the following:

  1. 10,000 baby boomers each day reach retirement age. Obviously all do not retire, but many will and those who have not, are obviously on the cusp of retirement. Florida is arguably the most attractive state in the United States for the retirees to bring their 401Ks and settle in a condo, townhouse or ALF. When you consider the fact that Florida has no personal income tax, probably the best Homestead Exemption Laws in the country and, without question, the best weather of any state in the nation, Florida becomes a prime destination, not only for retirees, but for businesses who are looking to relocate.

  2. California currently has 38 million residents, Texas 27 million and Florida is the third largest state in the nation with approximately 20 million residents. Based upon more than one demographic study that has been done, it is projected that Florida will grow faster in raw population than any other state in the country in the next 25 years. One demographic study suggested that Florida will double its population in the next 25 years and those of us that are still here will be sharing Florida with approximately 40 million other residents. When you realize that there are 47 states in this country that don’t even have 20 million people today, the amount of infrastructure that it will take to accommodate 20 million people is almost impossible to fathom.

Once again, growth is never linear, but if you want to look at Florida from 5,000 feet, you would see nothing but growth and prosperity for the next quarter of a century and probably longer.

MIAMI-DADE COUNTY… is an economy unto itself. Florida may grow rapidly, but Miami-Dade County is on fire and will be for many years. Miami-Dade County is no longer a place for disenfranchised Central and South Americans to invest their capital (usually by buying a condo), but Miami-Dade County is now a worldwide destination with prospects for aggressive economic growth far into the future.

In 2014, there was a 52% increase in construction contracts awarded here in South Florida with a total value of these contracts coming in at approximately $10 billion. That was $3.4 billion more than was awarded in 2013. To give further credence to our projections for population growth, 2014 saw a 62% increase from 2013 in the residential sector.

IN CONCLUSION… construction in Florida for the next 25 years is going to be hot and Miami-Dade County is on fire for the foreseeable future. From my personal perspective, the entire State of Florida is wonderful, but Miami is truly paradise.

***

AFTER MY VERY OPTIMISTIC VIEW OF FLORIDA… I hate to be pessimistic, but the growing population on this earth does provide us with some challenges. After listening to the dire prognostications for the ability of Californians to flush the toilet next year if drastic measures are not taken to alleviate the water shortages caused by their four year drought, I did some research as it relates to “water”. In that regard, be advised that 97.5% or more of all water on earth is salt water. Less than 0.75% of the fresh water remaining is accessible to sustain all non-marine plant and animal life.

Peak water is the point where the demands for safe clean fresh water begin to exceed the combined abilities of nature and man to replenish and supply it affordably and without harming ecosystems. The term was coined by Hydrologists who in a 2010 peer-reviewed article distinguished between Peek Renewable, Peek Non-Renewable and Peek Ecological Water to demonstrate that although there is a vast amount of water on earth, sustainability managed water is becoming scarce.

Water scarcity is no longer just a third world problem. Drought, drilling, agricultural, industrial and other demands on an already stressed water supply have brought about an unprecedented levels of ground water depletion throughout the U.S. The Key Ogallala Aquifer, for example, is just one of many being over-pumped at unsustainable rates. And once depleted, natural replacement could take up to 1,300 years.

The environmental community is currently pushing very hard to put limitations on hydraulic fracturing based upon the fact that it does end up consuming tremendous amounts of vital potable water. The current environmental “war cry”, as it relates to “peak water”, is that we are almost to that point and that we are sacrificing tremendous amounts of water to get oil and we can’t drink oil, yet we keep sacrificing our drinking water to get it. Environmental hand wringing on many fronts is not that uncommon, but in this case their argument against fracking may be something to think about.

***

IN THE FIRST BOND NEWSLETTER OF EACH YEAR, WE ALWAYS HAVE A “CURRENT EVENT” TEST JUST LIKE YOU DID IN GRADE SCHOOL… There are a total of 23 questions with the answers at the end of the bond newsletter.

  1. Unhappy voters dealt the Democrats a devastating defeat in the November congressional elections, as Republicans captured control of the Senate and expanded their margin in the House. What issue, according to exit polls, was most on the voters’ minds?

  2. Within $500 million, how much did candidates, parties, and outside groups spend in total to influence voters in the 2014 midterm elections?

  1. The voter turnout for the midterms was the lowest for any election cycle since 1942. Within 5 percentage points, what percentage of the voting-eligible population voted?

  2. Fill in the missing word: Jonathan Gruber, an MIT professor who served as an architect of the Affordable Care Act, was caught on video saying the law passed because of the “ of the American voter.”

  3. About 70,000 people, mostly children, tried to enter the U.S. at the Mexican border this year. Which three countries, now overrun by drug gangs and plagued with violence and social breakdown, are most of these migrants from?

  4. The two Dallas nurses who were infected with Ebola while treating Thomas Eric Duncan of Liberia had contact with 344 people before they were diagnosed and hospitalized. How many of those 344 people later tested positive for Ebola?

  5. Russian President Vladimir Putin has repeatedly denied assisting rebels in eastern Ukraine. When confronted by photos and videos showing Russian troops in Ukraine, which of the following excuses did Russian officials not used?

  1. The soldiers were on vacation

  2. The images were Photo shopped and borrowed from video games

  3. The soldiers got lost and crossed the border by mistake

  4. The soldiers were actually Ukrainians pretending to be Russians

  1. Grover Norquist, the conservative anti-tax activist, caused surprise when he attended which countercultural festival this summer, where he drank absinthe and appeared at a talk on psychedelic drugs?

  2. Six young Iranians were sentenced to 91 lashes and up to one year in jail for the crime of making a hit YouTube video in which they danced to which feel-good song?

  3. A Turkish cosmetics company used a photo of imprisoned al Qaida leader Khalid Sheikh Mohammed in an ad without realizing who he was. What product did he inadvertently advertise?

  4. Facebook created a stir when it offered women employees a new health benefit. What was it?

  5. Two commercial flights had to make unscheduled landings because of out-of-control confrontations between passengers. What did two passengers want to do that infuriated the passengers behind them?

  6. What is the name of the new powdered nutritional drink that contains 35 essential nutrients and is being marketed as a total meal replacement, making it unnecessary to buy any prepared food?

  7. What word did Facebook COO Sheryl Sandberg say should be banned when describing assertive and opinionated girls and women?

  8. The first-ever global study of anti-Semitic attitudes this year found that what share of the world’s population openly admits strongly anti-Jewish views?

  1. 9 percent

  2. 25 percent

  3. 45 percent

  1. The average cost of college rose by what percentage from 1989 to 2010?

  1. 90 percent

  2. 180 percent

  3. 207 percent

  1. A Pew Research Center poll found that what percentage of American adults did not read a single book last year?

  1. 12 percent

  2. 23 percent

  3. 52 percent

  1. Vladimir Putin sent Russian troops to seize Crimea in February and formally annexed it a few weeks later. Until 1954, Crimea was part of Russia. Who gave the strategic peninsula to Ukraine as a gift?

  2. The new prime minister of which country was a polarizing choice because he was state governor during a 2002 massacre of Muslim citizens?

  3. Which two countries won rights to host World Cup soccer tournaments in 2018 and 2022 amid allegations of bribery?

  4. What is the meaning of “Boko Haram,” the name of the Islamist group that has been kidnapping girls across Nigeria?

  5. Oscar Pistorius, the double amputee Olympic sprinter, was found guilty of manslaughter in the killing of his girlfriend, Reeva Steenkamp. To how many years in prison was he sentenced?

  6. Name the three Latin American countries with women presidents.

***

WORLD WAR II WAS BOTH AN AMAZING AND TRAGIC PERIOD OF TIME IN AMERICAN HISTORY… I think we all agree that even a single serviceman killed or wounded in the line of duty is a tragedy. In a perfect world, there would be no wars with the inevitable death and destruction. I am amazed, as I read World War II history, how resilient our military was and how strong the American people were as they daily endured the severe losses that we did during that terrible war. On average, 6,600 American servicemen died per month during World War II (about 220 a day). People who were not around during World War II have no understanding of the magnitude of the war or the losses we suffered. Our ability as a nation to produce the weapons of war (ships, aircrafts, tanks, guns, etc.) is arguably why we do not all speak German today.

Just looking at the aircrafts and pilots that flew the aircrafts in World War II gives us an amazing look at what our manufacturing capabilities were and of the courage of the pilots who flew the planes that we produced by the thousands. The following are a few facts to highlight both our economic power and the courage of our pilots:

  1. During World War II, 276,000 aircrafts were manufactured in the United States.

  2. 43,000 planes were lost overseas, including 23,000 in combat.

  3. From Germany’s invasion of Poland on September 1, 1939 until Japan’s surrender on September 2, 1945 (2,433 days), America lost an average of 170 planes a day.

  4. A B-17 carried 2,500 gallons of high octane fuel and carried a crew of 10 Airmen.

  5. 9.7 billions of gasoline were consumed by the aircraft in World War II.

  6. 108 million hours of flying time were undertaken by our pilots during the war.

  7. 260,000 million rounds of aircraft ammo were fired overseas.

  8. 2.3 million combat flights were flown.

  9. There were 299,230 aircraft utilized and 808,471 aircraft engines used, including 799,972 propellers.

  10. Almost 1,000 planes disappeared on route from the U.S. to foreign countries during World War II.

  11. 43,581 aircraft were lost overseas, including 22,948 on combat missions (18,418 in Europe) and 20,633 due to non-combat casualties overseas.

  12. In a single 376 plane raid in August of 1943, 60 B-17s were shot down. That was a 16% loss rate and meant 600 empty bunks in England that evening

  13. In 1942-43 it was statistically impossible for bomber crews to complete the intended 25-mission tour in Europe.

  14. Over 40,000 airmen were killed in combat and another 18,000 wounded. Some 12,000 missing men were declared dead, including those “liberated” by Soviets, but never returned. More than 41,000 were captured. Half of the 5,400 held by the Japanese died in captivity, compared with one-tenth in German hands. Total airmen casualties were 121,867.

I could go on endlessly with World War II statistics, but to conclude, at its height in mid-1944, the U.S.A.A.F. had 2.6 million people and nearly 80,000 aircraft of all types.

Today, the U.S. Air Force employs 327,000 active personnel (plus 170,000 civilians) with approximately 5,500 manned and nearly 200 unmanned aircraft. That’s about 12% of the manpower and 7% of the airplanes of the World War II peak.

***

AS A PUBLIC SERVICE, I AM OUTLINING SEVEN (7) THINGS… that you might want to consider avoiding in 2015:

  1. Too much sugar…is a primary cause of obesity, diabetes and tooth decay.

  2. Artificial sweeteners…may be just as bad. A new study indicates that the additives can alter the body’s metabolism to make weight gain more likely, particularly around the mid-section.

  3. Pot smoking…can damage developing brains. Today’s more potent strains, in fact, can cause structural changes in a key region of the brains of people younger than 26.

  4. Pop stardom…leads to an early grave, an Australian study has revealed. Sydney University Professor, Dianna Kenny, looked at more than 12,000 popular musicians who died from 1950 to 2014 and found that their life spans were roughly 25 years shorter than the average American’s.

  5. Playing football…damages brains, even in players who don’t suffer concussions. Studies have shown that at least one-third of NFL players will develop some form of cognitive disorder.

  6. Low Vitamin D…levels can increase the risk of Alzheimer’s disease and other forms of dementia.

  7. An unhappy marriage…can break your heart – literally. A new study from Michigan State University indicates that people in contentious marriages are much more likely to develop heart disease or suffer a heart attack or stroke than their more happily wed contemporaries.

***

BASED UPON OUR REMARKABLE… Florida economy, contractors are testing the limits of their bonding programs more than they have since 2006. Nielson, Hoover & Company, Inc. is the largest surety broker in the Southeast United States in a large part due to our ability to constructively work with our accounts and their surety markets in extending aggregate programs. We understand, as our surety partners do, that the underwriting process is as much about management and organization as it is about the balance sheet.

If you have surety credit claustrophobia and are feeling penned in by the limits that your current broker and surety company are imposing on you, please give us a call and allow us to show you how we have opened up surety credit lines for so many contractors.

***

BEING A POLICE OFFICER… is a difficult and dangerous profession. The events of this last year magnifies the necessity for clear thinking and the ability to make split second decisions. The ramifications of making the wrong decision at the wrong time are obvious… People are injured or lives or lost. I am a great proponent of police officers wearing video cams as a way of protecting themselves and protecting the public. For a number of years, police car videos have been common in police departments around the country. In that regard, please note the following comments that were taken off actual police car videos around the country.

  1. You know, stop lights don’t come any redder than the one you just went through.”

  2. Relax, the handcuffs are tight because they are new. They will stretch after you wear them awhile.”

  3. If you take your hands off the car, I will make your birth certificate a worthless document.”

  4. If you run, you will only go to jail tired.”

  5. Can you run faster than 1,200 feet per second? Because that’s the speed of the bullet that will be chasing you.”

  6. You don’t know how fast you were going? I guess that means I can write anything I want on the ticket”

  7. Yes sir, you can talk to the shift supervisor, but I don’t think it will help. Oh, did I mention that I am the shift supervisor?”

  8. The answer to this last question will determine whether you are drunk or not. Was Mickey Mouse a cat or a dog?”

  9. Fair? You want me to be fair? Listen, fair is place where you go to ride on rides, eat cotton candy and corn dogs and step on monkey poop.”

  10. In God we trust, all others we run through NCIC.” (National Crime Information Center)

  11. Just how big were those two beers you said you had?”

  12. No sir, we don’t have quotas anymore. We used to, but now we are allowed to write as many tickets as we can.”

  13. I am glad to hear that the Chief (of Police) is a personal friend of yours. So you know someone who can post your bail.”

***

IN PARTING… let me leave you with five (5) undeniable facts:

  1. We all love to spend money buying new clothes, but we never realize that the best moments in our lives are enjoyed without clothes.

  2. Having a cold drink on a hot day with a few friends is nice, but having a hot friend on a cold night after a few drinks – PRICELESS

  3. Breaking news: Condoms do not guarantee safe sex anymore. A friend of mine was wearing one when he was shot dead by the woman’s husband.

  4. Arguing over a girl’s bust size is like choosing between Molson Heineken, Carlsberg, and Budweiser. Men may state their preferences, but will grab whatever is available.

  5. I haven’t verified this on Snoops, but it sounds legit… A recent study found that women who carry a little extra weight live longer than the men who mention it.

***

SOMETHING WE ALL INTUITIVELY KNOW… When the early Jesuit fathers preached of Hurons and Choctaws, they often prayed for forgiveness from the vengeance of the Squaws. Twas the women not the warriors that turned those brave explorers pale, for the Female of the Species is more deadly than the male. – Kipling

***

(1) The economy (2) $4 billion (3) 36.4 percent (4) “Stupidity” (5) Guatemala, Honduras, and El Salvador (6) 0 (7) (d) The soldiers were actually Ukrainians pretending to be Russians (8) Burning Man in Nevada (9) Pharrell Williams’s “Happy” (10) Body hair-removal cream (11) Paying to freeze their eggs for future in vitro fertilization (12) Recline their seats (13) Soylent (14) “Bossy” (15) (b) 25 percent (16) (c) 307 percent (17) (b) 23 percent (18) Soviet Union leader Nikita Khruschev (19) India (Narendra Modi) (20) Russia and Qatar (21) “Western education is forbidden.” (22) Five (23) Argentina (Cristina Fernández de Kirchner), Brazil (Dilma Rousseff), Chile (Michele Bachelet)

Charles J. Nielson

CJN/cb

CHECK-OUT OUR NEW FREE MOBILE APP ON iTUNES THAT ALLOWS

YOU TO REQUEST A SURETY BOND ANYTIME, ANYWHERE

We are proud to introduce our new, fast and convenient mobile application “#1 Bond Request” for use with the iPad. This free app is now available for download on iTunes and allows you to quickly and easily submit a bond request from any location no matter how remote.

The app was created with several unique features including the ability to store your company’s information, saving you the hassle of having to re-type this data every time you submit a bond request, including a bid amount, bid bond percentage, duration, retainage, etc. In addition, integration with the iOS camera eliminates the need to scan and attach documents for bond requests.

Once a bond request is submitted, one of our surety specialist will have it prepared and sent to you. If you are not already a client, we will analyze your request and provide the right strategy to maximize your surety credit.

The “#1 Bond Request” app is free and available today at

https://itunes.apple.com/us/app/1-bond-request/id866492100?mt=8. You can also visit www.nielsonbonds.com to obtain a request form or you can submit the request electronically through our website.

AS PART OF OUR NEW CORPORATE RE-BRANDING, NIELSON HOOVER GROUP IS PROUD TO ANNOUNCE THE LAUNCH OF OUR NEW WEBSITE.

Our new site has been created to offer a more user-friendly experience and to meet the demands of our mobile users. Some of the key features of the new design include the ability for visitors to easily navigate through the diverse risk management companies under the Nielson Hoover umbrella, including: Nielson, Hoover & Company, Collinsworth, Alter, Fowler & French, LLC, Collinsworth, Alter, Lambert, LLC and Suretegrity, the only company in the country with the technology to deliver all Surety Bond offerings instantly online.

The site’s refreshed look, combined with its easy navigation, enhanced content, and mobile optimization, helps emphasize the company’s commitment to our clients as well as provide a detailed overview of the products and services that the Nielson Hoover Group has to offer. In addition, the site allows you to easily and quickly make a bond request online or to reach out to any member of our team instantly online with the click of a button.

To take a look, go to http://www.nielsonhoovergroup.com

2014-02 Bond Newsletter

by |

IF A BEAUTIFUL AREA IN A PERFECT CLIMATE AND A BOOMING ECONOMY DEFINE “PARADISE”… then those of you living in South Florida are enjoying your own personal paradise. When the economy went over the cliff in the second half of 2008, our prospects for a quick recovery looked very gloomy. Economic pundits were predicting that the approximate 10,000 condo units on the market, principally in Miami-Dade County at that time, would take ten (10) years to be absorbed into the marketplace. Within 2½ years most of that inventory had been absorbed and new condominiums were being planned.

According to some very reliable and high profile sources in the real estate marketplace, the last condo boom will look anemic compared to what will be coming within the next 5-10 years. It is important to realize that the real estate bust that we experienced after the crash of 2008 was not a real estate problem, but a national financial meltdown. There is absolutely no evidence that we have ever over built condos in our marketplace. The process of selling condominiums has been disrupted by national and international financial issues, but the demand for the product itself has always been there. Over 90% of the condominiums in the South Florida market are sold to other than U.S. citizens. The market for our condominiums is therefore worldwide with less than 10% being purchased by U.S. residents. It is difficult, if not impossible, to gauge the demand for a real estate product where the demand is generated from around the globe.

Although the data changes on a daily basis, since the rebuilding boom has started, there have been 268 condominiums in the planning, construction or completed stages. Twenty six (26) have been completed, forty (40) are under construction and the remainder are somewhere in the planning or permitting stages. The South American financing approach to the condominiums has proven to be a viable and successful approach thus far. The banks, however, are starting to feel a bit left out and a number of banks are competing for the business.

***

LET’S TAKE A BREATHER FROM OUR “IT’S GREAT TO LIVE IN PARADISE” SCENARIO… and talk about how men can extend their enjoyment of paradise by living a little bit longer. New research has uncovered a surefire way to add up to 20 years to men’s lives: castrate them. When Korean researchers analyzed the genealogical records of males who were castrated as boys to serve in the Palace of the Chosun Dynasty between the late 14th and early 20th centuries, they found that the Eunuchs lived between 14 and 19 years longer on average, than their non-castrated peers. The records also show that 3 of the 81 Eunuchs lived to be 100, a rate about 130 times higher than among people in developed countries today. The findings support “the idea that male sex hormones decrease the life span of men”.

In contrast to estrogen, which appears to enhance longevity, testosterone seems to weaken the immune system and increase the risk of cardiovascular disease. Lower levels of the male hormone may be a main reason why women tend to live longer than men and are ten times as likely to reach the age of 110. I have given you the facts men, you know what to do.

***

ON A LOOK FORWARD BASIS FOR THE NEXT 25 YEARS… Florida may have the best economic prospect in the nation. Two demographic studies have predicted that Florida’s population could double in the next 25 years. That would put us at approximately 40 million people. Miami-Dade County is the economic engine of Florida and, as I mentioned in my previous bond newsletter, the United Nations recognizes 195 countries in the world and if Miami-Dade County were a country, we would be the 60th largest economy in the world. There are 135 countries with a Gross Domestic Product (GDP) less than Miami-Dade County’s.

In my world, Florida is one of the three (3) largest surety premium producing states in the nation (California, Texas, Florida). Ironically, Florida has never produced a “jumbo” construction company…one that produces $1.0 billion or more of revenue on an annual basis. Last year, the largest Florida construction entity produced $443 million of revenue.

Florida has no real smoke stack industry. Jumbo construction companies are produced by huge manufacturing facilities, pharmaceutical facilities, and large government projects, particularly those that come under the Army Corps of Engineers. We are a very middle market economy with large contractors doing between $150 million and $250 million of revenue a year. Most of our construction economy is generated by contractors doing between $5 million and $50 million a year. These projects are typically funded by multiple municipalities and taxing districts in Miami-Dade, Broward, and Palm Beach Counties. After the recession, the funding dried up and these projects stopped. It is only now that we are seeing the slow return of these projects, but the various municipalities in South Florida are a year or two (2) behind the private money. Tax revenues have to regenerate themselves to fund the capital budgets. For the last couple of years the tax revenues in Miami-Dade County have risen rather dramatically. Last year the county’s tax rolls rose (now at $210 billion) and tax revenue rose by 6.5% which hopefully will have a positive effect on the county’s capital budgets.

***

IT IS NO SECRET… I have not been a fan of our current President, but feel duty bound to acknowledge a recent study done by a group that rated President Obama the fourth best President:

(1) Reagan and 9 others tied for first.
(2) 15 Presidents tied for second.
(3) 18 other Presidents tied for third.
(4) Obama came in 4th.

Based upon all that is going on from an economic and international perspective, I am certain I will not get as much push back as I might have gotten a few years ago. From a military standpoint, I consider myself a “hawk”. I think we should and that we must maintain the strongest military in the world. There is a reasonable debate as it relates to ground troops and their numbers. On the other hand, we must dominate the skies and we must dominate the seas. It concerns me that Obama’s plans to shrink the Navy, and China’s rate of building their Navy, would give China Naval dominance within seven (7) years. This can never happen.

On the other hand, I do agree with President Obama that there is no United States solution to Iraq, Syria, Libya, and particularly Afghanistan. These countries consist primarily of tribal cultures that have existed in some cases for thousands of years. Without completely annihilating the populations and starting from scratch, we cannot change them no matter how much blood we leave in the sand.

Whether it is ISIS or al-Qaeda, we are not going to militarily wipe them out. We can drastically diminish their ability to act against us as we have been doing for years in a number of African countries. Al-Qaeda continues to exist, but the airstrikes and drones have contained that threat. In the Middle East, citizens of the various countries are going to have to step up to secure their borders and their way of life. I think that we can do a tremendous amount based upon airstrikes and drones to assist their efforts, but I do agree with President Obama that it would be foolish to send any troops into any one of those countries. We should never have been in Vietnam, Iraq or Afghanistan. Everything that we need to do can be accomplished from thirty thousand feet, and with our superior intelligence gathering abilities.

Our military continues to say that airstrikes are not enough to destroy ISIS and they may be correct, but no matter what we do, we probably are not going to destroy ISIS. I am totally unconvinced that our air power cannot contain them, along with the intelligence and training that we can provide for the locals. It is interesting to note that a number of years after the end of the Vietnam War, the leaders of North Vietnam admitted that if we had continued our B-52 bombing strikes over Hanoi for one more month, they would have surrendered to the U.S. The Air Force, intelligence, and drones are the answer to containing the various threats around the world, not American blood. To a great extent, even as a hawk, I subscribe to the great Lao-Tzu who said: “It was only when you see a mosquito landing on your testicles that you realize that there is always a way to solve problems without using violence.”

***

IN MY OPINION IT IS OVER… Whether drastic changes come in the next five (5) years or whether we stumble on a little longer, the end of the age of entitlement is around the corner. The welfare state seemed like a good idea at the time. In the economic boom following World War II, successive Presidents launched a great liberal experiment — an “entitlement paradise” in which everyone would enjoy a job, a home, a lifetime pension and the most sophisticated medical care on the planet.

These things can no longer be considered privileges; they were rights, which “fairness” demanded that the government provide, if you couldn’t provide them yourself. But today, with crushing debt and an aging population, the experiment is failing as far as I am concerned. When President Franklin Roosevelt created Social Security, the average life span of American men was 58 years of age. Now many people live into their 80’s and 90’s, thanks to costly drugs, artificial hips, and organ transplants for which they expect to pay little, if anything.

People collect far more in Medicare and Social Security than they contribute while working. To pay these bills, the U.S. has been printing money, and taking on $17 trillion in debt. Is it cold hearted or cruel to note the obvious? We can no longer afford to guarantee every American the good life. Good intentions are fine, but without means, they are useless and in the very near future some very difficult political and economic realities are going to be forced upon our government and the American people.

***

GREAT BRITAIN AND GERMANY… in my opinion are the only two fiscally responsible economies in Europe. It is, therefore, disappointing when we see the Germans start to slip from basic economic and social reasonableness. The German government has proposed giving time off to grandparents so they can help their children care for their grandchildren. Family Minister, Kristina Schroder, said working grandparents should have the right to take up to three (3) years of leave without losing their jobs or credit towards their retirement benefits. In Germany the law requires that the parents who take maternity leave will get paid, but the grandparents who take advantage of their three (3) year leave will not get paid when they are not working. As stupid as the grandparents maternity leave law is, at least they do not require employers to continue to pay wages for the grandparents…at least not yet.

***

SAY WHAT YOU WANT ABOUT VLADIMIR PUTIN AND HIS UKRANIAN ASPIRATIONS… but in my opinion, President Putin has his act together, knows what he wants and has a plan to achieve it. In addition, Russia is smart enough not to let their culture and society be changed or controlled by an immigrating Muslim population as much as Europe and Great Britain have.

President Putin gave a speech to the Duma (Russian Parliament) about the tensions with minorities in Russia. The speech was as follows:

“In Russia, live like Russians. Any minority, from anywhere, if it wants to live in Russia, to work and eat in Russia, it should speak Russian, and should respect the Russian laws. If they prefer Sharia Law and live the life of Muslims, then we advise them to go to those places where that’s the State law.

Russia does not need Muslim minorities. Minorities need Russia and we will not grant them special privileges, or try to change our laws to fit their desire, no matter how loud they yell ‘discrimination’. We will not tolerate disrespect of Russian culture. We better learn from the suicides of America, England, Holland and France, if we are to survive as a nation. The Muslims are taking over those countries and they will not take over Russia. The Russian customs and traditions are not compatible with the lack of culture or the primitive ways of Sharia Law and Muslims.

When this honorable legislative body thinks of creating new laws, it should have in mind the Russian national interest first, observing that the Muslim’s minorities are not Russians.”

The politicians in the Duma gave Putin a five (5) minute standing ovation. Our legislative bodies both on a national and state level would be well advised to listen to Putin if our culture and way of life is to survive.

***

THE ALL IMPORTANT MID-TERM ELECTIONS ARE COMING UPON US… On a national level, the key question is whether or not the Republicans will take the Senate. Based upon my reading and research, I would give the Republican Party a 60% chance of taking the Senate. We will need to win seven (7) additional seats to have a majority in the Senate. The Republican majority in the House of Representatives is safe. The Republicans have the possibility of picking up eleven (11) additional seats, but I think we will add no more than six (6) to the House of Representatives.

As far as the gubernatorial race in the State of Florida is concerned, to me that situation is “black and white”. First of all, I think Rick Scott has done an excellent job (not perfect, but excellent) as Governor. There are over 2,500 business regulations that Governor Scott has trashed. There is a lot of argument as to how many jobs have been created under Governor Scott, but without question, Governor Scott’s pro-business policies have created over a half a million jobs compared to over one million jobs lost under the previous administration. Governor Scott and his administration have cut taxes twenty-four (24) times since he has been in office and will be cutting another $500 million in taxes this year, including a rollback of vehicle registration fees that were increased under Governor Crist. By the way, unemployment has been reduced by 6.3% and we have paid down $36.6 billion in State debt and paid back another $3.5 billion borrowed from the Federal Government for unemployment assistance. We have a balanced budget and for those of you concerned about crime, the crime rate in the State of Florida is now at a forty-two (42) year low…need more be said.

Although I think the political party of any candidate should be subordinate to the qualities of the individual, it is important to understand that a candidate’s policies on any issue are often mandated by the masters that they serve…the political parties that pays for their campaign. Therefore, it is very difficult for a Republican or a Democrat to stray too far from the stated party platforms. In that regard and for those interested, let me provide a comparison of the party platforms between the Republican Party and the Democratic Party as follows:

REPUBLICAN PARTY PLATFORM

 

Safeguarding Religious Freedom: HHS Mandate

  • Republican Party opposes the HHS Mandate and firmly believes the government has no right to force individuals to abandon their religious beliefs and violate their moral values by forcing us to provide sterilization, abortions on demand and contraceptive coverage to their employees.
  • Republican Party supports the public display of the Ten Commandments in government agencies, judicial courts and public schools.
  • Republican Party affirms every citizen’s right to apply religious values to public policy and the right of faith-based organizations to participate fully in public programs without renouncing their beliefs, removing religious objects or symbols, or becoming subject to government-imposed hiring practices.
  • Republican Party supports the right of students to engage in student led prayer in public schools, athletic events, and graduation ceremonies, when done in conformity with constitutional standards.
  • Republican Party deplores the increasing incidence of attacks against religious symbols, as well as incidents of anti-Semitism on college campuses.

Abortion – Protecting Innocent Life

  • Republican Party supports the Sanctity of Human Life and refuses to fund organizations performing abortions, like Planned Parenthood, the United Nations Convention on Women’s Rights, and the United Nations Convention on the Rights of the Child.
  • Republican Party supports using adult stem cells, umbilical cord blood, and cells reprogrammed into pluripotent stem cells. Opposes investing federal funding and tax payer dollars in research that unethically destructs embryonic human life.
  • Republican Party opposes the use of public revenues to promote or perform abortions, nationally & international.
  • Republican Party supports the Born Alive Infants Protection Act that ensures infants who are born alive during an abortion receive the treatment and care that all newborn infants deserve.
  • Republican Party supports traditional family adoptions.

Education: Return education to parents – Abstinence

  • Republican Party supports programs for teens and funding for abstinence education, as the responsible and expected standard of behavior.
  • Republican Party supports School Choice, charter schools, vouchers and tax credits for attending faith-based or other nonpublic schools, as well as the option of home schooling.

Marriage – Preserving traditional marriage

  • Republican Party supports the Defense of Marriage Act, and recognizes marriage as the union of one man and one woman.
  • Republican Party also encourages states to review their marriage and divorce laws to strengthen marriages.
  • Military, International and Homeland Security
    Republican Party opposes the repeal of “Don’t Ask, Don’t Tell” in the Military, as this was the request made by its generals.
  • Republican Party supports Israel and all our allies, endorses strength through a strong Military force, a clear policy and firm position against our country’s enemies and support law enforcement agents for better Intelligence to fight bioterrorism and cyber-terrorism.
  • Budget, spending and taxes
    Republican Party favors the adoption of the Balanced Budget Amendment to force legislators to balance the budget every year except in time of war.
  • Republican Party understands our National Debt is a huge danger to our National Security and advocates reducing our expenses, minimizing regulations and running a smaller/smarter government.
    Republican Party believes in returning power to the states to return the power to the people.

Energy

  • Republican Party supports all energy sources and the Keystone Pipeline for energy independence and to secure American jobs.
DEMOCRAT PARTY PLATFORM

 

Safeguarding Religious Freedom: HHS Mandate

  • Democrat Party supports the HHS Mandate and the Supreme Court rules it Constitutional, so it is now the law of the land, and religious organizations, as well as employers with deep religious beliefs, are now forced to provide sterilization, abortions on demand and contraceptive coverage to their employees.
  • Democrat Party opposes the public display of the Ten Commandments and enforces the separation of church and state.
  • Democrat Party opposes all faith-based initiatives on government property, including government agencies, judicial courts and public schools.
  • Democrat Party bans students from engaging in prayer in public schools, athletic events and graduation ceremonies.
  • Democrat Party opposes all displays of religious objects or symbols in government property.

Abortion – A woman’s right to choose

  • Democratic Party strongly and unequivocally supports Roe v. Wade and a woman’s right to choose an abortion, regardless of ability to pay. It also supports organizations like Planned Parenthood and United Nations abortion rights efforts.
    Democrat Party supports investing federal funds and tax payer dollars in research that destructs embryonic human life.
  • Democrat Party supports using public funds to perform abortions through Planned Parenthood.
    Democrat Party opposes the Born Alive Protection Act, and passed legislation preventing physicians from providing medical care to babies born alive after a botched abortion.
  • Democrat Party supports gay adoption of children.

Education: Public Schools control education

  • Democrat Party supports providing age-appropriate sex education to children, as early as elementary grades.
  • Democrat Party opposes School Choice and prefers all schooling to be received through the Public School System.

Marriage – Same sex marriage and civil unions

  • Democrat Party opposes the Defense of Marriage Act and supports same sex marriages.
  • Democrat Party supports the full inclusion of all families, including same-sex couples, in the life of our nation.

Military, International and Homeland Security

  • Democrat Party repealed the “Don’t Ask, Don’t Tell” policy in opposition of the recommendations of military leaders.
  • Democrat Party endorses a reduction in our military force and urged Israel to change its borders to benefit the Palestines.

Budget, spending and taxes

  • Democrat Party favors putting end to the special interest driven corporate loopholes and eliminating tax cuts for the wealthy.
    Democrat Party endorses Stimulus bills and bailouts to save failing industries.
  • Democrat Party believes in big government and looks to remove powers from the states and transfer them to the federal government.

Energy

  • Democrat Party only supports green energy to benefit the environment and prevent global warming.

SHERIFF JOE ARPAIO, MARICOPA COUNTY, ARIZONA SHERIFF… has provided us with a very enlightened view of a liberal paradise.

“A liberal paradise would be a place where everybody has guaranteed employment, free comprehensive health care, free education, free food, free housing, free clothing, free utilities and only law enforcement has guns.

And believe it or not, such a place does exist, it’s called prison.”

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TRUST ME… If we currently do not have the privilege of providing surety credit for your company, there has never been a better time to set up a “back-up Line of Surety Credit”. Please give us a call and let’s discuss.

Parting shot: “The one difference between death and taxes is that death does not get worse every time Congress meets.” – Will Rogers