2014-01 Bond Newsletter

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THE WAY WE WERE IN 201370% of Americans said the country was on the wrong track. This is the highest number in two years. 42% expect the economy to get worse in the next 12 months. 54% say they felt little or no economic improvement since the 2008 financial crisis. 29% think the economy will never fully recover. 70% say the U.S. is losing respect internationally. 53% believe Americans play a less important role in the world than a decade ago. 52% say the U.S. should mind its own business and try to stay out of other nations’ affairs.

HOW HAS SOCIETY CHANGED? 63% say it is morally acceptable for unmarried people to have sex. 59% have no moral objections to gay relationships, and for the first time a majority of Americans – 58% favor legalizing marijuana. 59% say the internet and social media are making Americans ruder. 69% think we are too distracted by our gadgets and evidence suggest they are right. 49% of adults and 43% of teenagers admit to texting while driving even though they know it’s unsafe. 33% of Smartphone owners say they have used their device during a dinner date. 9% admit to looking at their phones during sex.

WHO DO WE BLAME FOR OUR PROBLEMS? 59% of voters disapprove of President Obama’s handling of the economy. 60% don’t like how he had dealt with health care. Even young Americans are souring on the President, with 54% of 18-29 year olds saying they are unhappy with his performance. Florida is not frustrated by Obama alone, only 9% approve of the way Congress is doing its job. 60% would like to replace every single Senator and Representative. To get better politicians, however, we may need better voters. 55% say most Americans are guided by their emotions, not facts, when they vote. Note: To save space, I did not indicate the polling entity that provided the aforementioned data, but on request, I will be happy to provide it.


MY PARENTS…were the very definition of Tom Brokaw’s “greatest generation” and what a great generation it was. In my opinion, no generation has contributed more to the well-being of every citizen in this country and to the liberty and well-being of so many people around the world. To put some of their achievements into perspective, please note:

During the 3½ years of World War II that started with the Japanese bombing of Pearl Harbor in December 1941 and ended with the surrender of Germany and Japan in 1945, the U.S. produced 22 aircraft carriers, 8 battleships, 48 cruisers, 349 destroyers, 421 destroyer escorts, 203 submarines, 34 million tons of merchant ships, 100,000 fighter aircraft, 98,000 bombers, 24,000 transport aircraft, 58,000 training aircraft, 93,000 tanks, 257,000 artillery pieces, 105,000 mortars, 3 million machine guns, and 2,500,000 military trucks.

We put 16.1 million men in uniform in the various armed services, invaded Africa, invaded Sicily and Italy, won the battle of the Atlantic, planned and executed D-Day, marched across the Pacific and Europe, developed the atomic bomb and ultimately conquered Japan and Germany.

It’s worth noting, that during the almost exact amount of time, the Obama administration couldn’t build a functioning website.


RIGHT AROUND THE CORNER…we will be asked to file our Income Taxes for 2013. Oliver Wendell Holmes a century ago said, “Taxes are what we pay for civilized society”. During early history, what we term as Income Tax payments went to rulers who provided order, service and military protection. At that time in history, such taxes could be paid in livestock, crops and labor.

Progressive taxes were encouraged in 1776 by Adam Smith who said, “Citizens ought to contribute towards the support of the government in proportion to their respective abilities.” Our government taxed booze, carriages, sugar, tobacco, bonds and the slave trade between 1791 and 1802.

The cost of the war of 1812 added taxes on gold, silverware, jewelry and watches. By 1817, those taxes were replaced with tariffs on imported goods. The Civil War caused Congress to enact the first Income Tax, starting at 3% of earnings between $600 and $10,000 a year. In that era, the average American yearly income was $300.

The new Internal Revenue system had the right to enforce tax laws by prosecution and seizing property, as it does today. In 1895 the Supreme Court declared the Income Tax unconstitutional, by not being fairly apportioned among the states.

The economic aftershocks of the San Francisco fire of 1906 bankrupted twelve (12) insurance companies and, with other causes, led to the “panic” of 1907. It nearly collapsed the stock market and the U.S. Treasury and resulted in the 1913 Amendment to the Constitution that made our Income Tax permanent. The idea of withholding Income Taxes from wages did not begin until 1943. During our lifetime, the concept of Income Tax, its regulations and its enforcement, has been a political football that has been part of the political platform of every presidential candidate since 1913. Now with an IRS code that is explained in over 70,000 pages, there continues to be a cry for a simpler and more equitable tax system in the United States. Any changes, however, center around the “equitable” demands. What is equitable and in the financial best interest of this country remains a great debate, so the number of pages in our tax code continues to increase each year, complexity of the tax code grows expedientially and this citizen, for one, becomes more and more exasperated with our tax code and its inherent inequities and complexities.


IN EACH ISSUE OF THE BOND NEWSLETTER… I feel compelled to add to the useless information already provided, additional useless facts:

  1. It takes glass one million years to decompose, which means it never wears out and can be recycled an indefinite amount of times.

  2. Gold is the only metal that doesn’t rust, even if buried in the ground for thousands of years.

  3. Your tongue is the only muscle in your body that is attached at only one end.

  4. If you stop getting thirsty, you need to drink more water. When a human body is dehydrated, its thirst mechanism shuts off.

  5. Zero is the only number that cannot be represented by Roman Numerals.

  6. Kites were used in the American Civil war to deliver letters and newspapers.

  7. Drinking water after eating reduces the acid in your mouth by 61%.

  8. Peanut oil is used for cooking in submarines because it doesn’t smoke unless it’s heated above 450F.

  9. The roar that we hear when we place a sea shell next to our ear is not the ocean, but rather the sound of blood surging through the veins in the ear.

  10. Nine out of every ten living things live in the ocean.

  11. Airports at high altitudes require a longer airstrip due to lower air density.

  12. The tooth is the only part of the human body that cannot heal itself.

  13. In ancient Greece, tossing an apple to a girl was a traditional proposal of marriage. Catching it meant she accepted.

  14. Intelligent people have more zinc and copper in their hair.

  15. Caffeine increases the power of aspirin and other pain killers, that is why it is found in some medicines.

  16. The military salute is a motion that evolved from medieval times, when knights in armor raised their visors to reveal their identity.

  17. When a person dies, hearing is the last sense to go. The first sense lost is sight.

  18. Strawberries are the only fruits whose seeds grow on the outside.

  19. The moon moves about two inches away from the earth each year.

  20. The earth gets 100 tons heavier every day due to falling space dust.

  21. Due to earth’s gravity, it is impossible for mountains to be higher than 15,000 meters.

  22. Everything weights 1% less at the equator.



WE ARE ENTERING A PRECARIOUS ECONOMIC TIME …in my last newsletter, I talked about the financial issues that we are facing coming out of the recession. From a financial perspective, the next couple of years will provide financial challenges that will require us to “think outside of the box” not only from a contractor’s perspective, but from a credit perspective also. Banks that have been reluctant over the last 4-5 years to deal with contractors are reevaluating their positions. Thankfully we are seeing more interest among a few courageous and forward thinking banks in doing business with the contractors we bond. Likewise, surety companies, will have to move out of their comfort zones to accommodate the surety credit needs of many of their long term accounts. It comes down to a basic principle: We either evolve or become extinct.

An example of this principle is the “eagle”. There is a reason that the bald eagle has such significant symbolism to our society. The eagle has the longest life-span among birds. It can live up to 70 years, but to reach this age, the eagle must make hard decisions. In its’ 40s, its’ long and flexible talons can no longer grab prey which serves a food. Its’ long and sharp beak becomes bent and its’ old aged and heavy wings, due to their thick feathers, become stuck to its’ chest and make it difficult to fly.

Then, the eagle is left with only two options: Die or go through a painful process of change which lasts 150 days. The process requires that the eagle fly to a mountaintop and sit on its’ nest. There, the eagle knocks its’ beak against the rock until it plucks it out. After plucking it out, the eagle will wait for new beak to grow back and then it will pluck out its’ talons.

When its’ new talons grow back, the eagle starts plucking out its’ old-aged feathers. After five months, the eagle takes its’ famous flight of rebirth and lives for 30 more years. Some additional tidbits on the eagle that I think you will find interesting. When it rains, most birds head for shelter. The eagle is the only bird that, in order to avoid the rain, starts flying above the clouds. The eagle is famous for its eyesight and for good reason. The eagle can probably identify a rabbit moving almost a mile away. Therefore, an eagle flying at an altitude of a thousand feet over open country could spot prey over an area of almost three (3) square miles from a fixed position.

Many times, in order to survive we have to start a change process. We sometimes need to get rid of old memories, habits and past traditions and only freed from these past burdens, can we take advantage of the present. No wonder God wants us to spread our wings and soar with eagles. With all of the legal, financial and social changes taking place in our country, will we be willing to make those changes that will allow us to prosper individually and as a country?

If we do succeed, it will be based upon understanding five (5) principles that are basic to our way of life:

  1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.

  2. What one person receives without working for it, another person must work for it without receiving.

  3. The government cannot give to anybody anything that the government does not first take from somebody else.

  4. You cannot multiply wealthy by dividing it!

  5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they worked for, that is the beginning of the end of any nation.


SPEAKING OF OUR CURRENT PROSPERITY…nothing will guarantee the long term growth of the entire State of Florida like the new lock being built in the Panama Canal. The positive commercial and financial effect that the Canal will have, particularly on Miami-Dade County is a subject that would take the space of the entire newsletter to adequately outline.

Over $1.5 billion has been spent by Miami-Dade County, the State of Florida and the Federal Government in upgrading our port (Dodge Island). The largest of these projects is the tunnel that has been completed under Government Cut. In addition to designing and building the tunnels, MAT Concessionaire (a partnership between French industrial conglomerate, Bouygues, and Australian construction firm, Transfield Services) will operate and maintain the tunnels for thirty (30) years after they open. During that time, MAT Concessionaire will collect no revenues from tolls. However, the company stands to receive $450 million in milestone payments – $100 million during construction and $350 million by the time the O&M (Operate & Maintain) contract ends in 2044. The state will make a $350 million payment upon final acceptance and will begin making availability payments upon substantial completion. Over the following 30+ years, availability payments will be made based upon MAT providing a safe, well-maintained facility. Overall, the cost of the tunnel, based upon its construction cost and operations and maintenance through 2044, will be slightly over $1.0 billion.

The tunnel is scheduled to open with the first eighteen (18) wheeler going through the tunnel in May 2014. The tunnel will connect the county-owned seaport on Dodge Island to the McArthur Causeway and thus to Miami’s highway system, travelling under a part of the bay known as Government Cut. Currently, the only road in and out of the port is the main entrance road off Biscayne Boulevard near American Airlines Arena which funnels all of the port’s traffic through downtown Miami. Nearly 16,000 vehicles, including more than 4,000 trucks travel to and from the port through downtown streets each weekday. As of May 2014, this traffic will be diverted from downtown Miami through the tunnels.

For over ten years, the concept of the tunnel, along with the many inherent risks, had been debated. History will show, however, that overcoming the objections and challenges will have produced the single project that will contribute more to the continued growth and prosperity of Miami-Dade County than any other.


FLORIDA’S GROWTH OVER THE NEXT TWENTY-FIVE YEARS…will depend on millions of people determining that Florida is the most desirous place on the planet to retire. To assist those trying to make this decision, let me compare five (5) areas of the country for you:


  1. You are willing to park 3 blocks away because you found shade.

  2. You’ve experienced condensation on your hiney from the hot water in the toilet bowl.

  3. You can drive for 4 hours in one direction and never leave town.

  4. You have over 100 recipes for Mexican food.

  5. You know that “dry heat” is comparable to what hits you in the face when you open your oven door.

  6. The 4 seasons are: tolerable, hot, really hot and ARE YOU KIDDING ME??!!


  1. You can make over $250,000 a year and you still can’t afford to buy a house.

  2. The fastest part of your commute is going down your driveway.

  3. You know how to eat an artichoke.

  4. You drive your rented Mercedes to your neighborhood block party.

  5. When someone asks you how far something is, you tell them how long it will take to get there rather than how many miles it is.

  6. The 4 seasons are: Fire, Flood, Mud and Drought.


  1. You say “the city” and expect everyone to know you mean Manhattan.

  2. You can get into a four-hour argument about how to get from Columbus Circle to Battery Park, but can’t find Wisconsin on a map.

  3. You think Central Park is “nature.”

  4. You believe that being able to swear at people in their own language makes you multi-lingual.

  5. You’ve worn out a car horn. (Ed. Note if you have a car).

  6. You think eye contact is an act of aggression.


  1. You only have four spices: salt, pepper, ketchup, and Tabasco.

  2. Halloween costumes fit over parkas.

  3. You have more than one recipe for casserole.

  4. Sexy lingerie is anything flannel with less than eight buttons.

  5. The four seasons are: winter, still winter, almost winter and the week between almost winter and winter.


  1. You eat dinner at 3:15 in the afternoon.

  2. All purchases include a coupon of some kind — even houses and cars.

  3. Everyone can recommend an excellent dermatologist.

  4. Road construction never ends anywhere in the state.

  5. Cars in front of you often appear to be driven by headless people.

In all seriousness, Florida is, in my opinion, the most attractive place in the country for “baby boomers” to settle down for our last round-up. When you consider the fact that Florida has no personal income tax; one of the best Homestead Exemption laws in the nation and, without question, the finest weather in the country (if you have been watching the national weather reports over the last 2-3 months, you would agree with me), why would you want to retire anyplace else? For many of you this may not be great news, but as I pointed out in my last bond newsletter, in the next 25-30 years, Florida’s population will probably double from the current 19.5 million to potentially 40 million residents. We will add more residents in the next 25 years than any other state in the union. No economy is completely linear, but we are looking at a quarter of a century of growth and prosperity.


BASED UPON SOME OF THE FINANCIAL AND ECONOMIC CHALLENGES…ahead for many contractors in the next couple of years, as the largest surety broker in the state, we offer our services to any contractor that we currently do not have the privilege of servicing. We write more contractors with more surety companies than any other surety or insurance broker in the state. Let us put our well-earned expertise to work for you. Feel free to call any one of our offices and we will be happy to work with you and show you why we provide surety credit to more contractors than any other organization.


THE REASON THAT HUMANITY HAS SURVIVED…is based upon a “fight or flight” response that is built into each one of us. And as a parting shot and as a public service, I want to provide six (6) situations in which a man should “run” even if the “fight or flight” response does not kick in:

  1. The boulder is rolling towards you.

  2. She has a Justin Bieber poster on her wall.

  3. Your daughter is in the hospital.

  4. Bar fight, foreign country, cops en route.

  5. Final boarding call.

  6. Brunch

Hopefully I have saved some lives or saved you from yourself.

Charles J. Nielson