Mission

A Peak Under The Hood will be dedicated to providing unique insights into macro topics happening around the world and how these topics may affect financial markets. We will try to provide an entertaining, but informative blog, on subjects ranging from Real Estate, Mortgage Markets, Commodities, Major Stock Indexes, Bonds, and Select Trading Ideas. Our site will contain original posts, charts and also include opinions from outside investors and reporters who furnish original thoughts. We will attempt to dig deeper than what can be found on major network financial news outlets and it is our hope that you will continue to visit the site as we provide intelligent analysis that may be counter intuitive to mainstream ideas.

Tuesday, August 30, 2011

Catfish. Wizzie’s New Hat?

Ain’t nuttin in dis world like some fresh catfish, deep fried!  Nuttin!
Which is the better Catch?

Catfish are bottom feeders.  Almost all catfish are negatively buoyant—meaning they sink rather than they float.  Catfish suck the life out of their prey to kill them and most of the largest, nastiest bottom-feeding catfish are located in the United States, but the largest is in Asia. 
Catfish = Banks:  Bottom feedings, life-suckers that sink to the bottom of your portfolio. 

Financials look to have a short life in this rally—if they can break through the downtrend line and the horizontal the upside is still muted at best.  If not, the financials stop dead in their tracks here and slowly float sideways and down.  Not a very good call for the economy—when the banks fall, the economy follows—when this happens EVERYONE gets fried and the real bottom sucking begins.  There will likely be some volatile swings, but remember the old cliché—if you play with fire, you end up with a bunch of negatively buoyant garbage that keeps sinking lower and lower and sucks the life out of your portfolio… essentially, you get corn-breaded and fried- you get catfished.
Wizard Speak 2.0.  The new hat theory. 
Today’s minutes from the last fed meeting were released and more nonsensical ramblings from the ‘experts’ that deliver the data to the internet masses. 
The options with the most support were more asset purchases and increasing the maturity of the Fed’s balance sheet. A “few” favored cutting the interest on excess reserves the Fed pays to banks. The Fed will discuss these options at its two-day meeting on Sept. 20-21.
I have a hard time understanding the ‘several tools’ that the headline suggests…
They might as well have come out and said that the Master Wizard of Fed Narnia, The Great Ben Wizzie, has a new magic hat that will save the economy. 
He then could have pranced around his minions in his new hat, showing the shiny sequins and chuckling over a glass of Merlot.
                ‘A New hat!” a poor boy would say, smiling, while pushing through the crowds of peasant onlookers as he runs to find and tell his parents.  “He has a new hat!  A new hat!  We are all saved!!!”
This reliance on the Federal Reserve to save the economy with monetary fed magic is just foolish.  The feds cannot:
1)      Create jobs with monetary stimulus
2)      Stop housing prices from falling with monetary stimulus
3)      Create confidence with monetary stimulus
4)      Reduce debt levels with monetary stimulus
I’m sure Wizzie will be sporting his ‘new hat’ at the next wizard conference in Sept. 
But remember, new hat or not, this is the same old Fed (up economy!). 

Thursday, August 25, 2011

Watch What You Wish For. Jobs Well Done.

A big shout out to Steve Jobs--

Best of luck buddy.  You are a pimp and you created many gadgets that make the world a better place.  I hope you can live out your life happily with your family and friends... and many rooms filled with money.


It's the day before Fed day.  We all know that Ben Wizzie is getting ready-- probably doing voice lessons with his stimulus speech coach, eating government cheese and joking about leaving a 9% tip on the $80 bison steak he just devoured.  That or he is shivering in his own sweat and freaking out.  Really though, I doubt that-- I would however put money on Wizzie being a cheap ass tipper.

QE3 to save the day?  Better watch what you wish for.

There is a ton of chatter about QE3, how it will be presented and in what way it will spark the markets.  There will be a QE3, but not tomorrow, at least not in the same fashion as QE1 or QE2.  The QE3 announcement will come in 2011, however later in the year when the wheels really start to fall of the bus.  It will be put in place to try and save Christmas... which it will do, at the cost of an intense recession in 2012 and 2013.

In reality, QE3 is a bad idea, as was QE2.  Were they necessary?  That is hard to say.  You get many answers from well dressed 26-year-old analysts on CNBC on this topic-- some which say yes because it pimped the S&P and others that say yes because it afforded them the Armani suit. 

Others, the more seasoned analysts, (still wearing Armani mind you) say.. maybe?  I suppose the verdict is still out on QE2, but from my vantage point as 'the consumer' I think it sucked.  Everything costs a ton more and there are still no jobs or housing market.  The only real difference I saw from QE2 was that grapes went from being $0.99/lb to about $2.99/ lb.  Luckily I drink my grapes! 

If Ben Wizzie does announce a curve-ball QE3 tomorrow that mimics the QE2 mistake, you can expect the markets to rally, 26-year-old analysts to 'holla' about how great the S&P is doing, and dollar based commodities will shoot higher-- most noticeably oil.  It may be great for a month, but the rally will fizzle-- there just isn't the money in the pockets of the consumer to support higher prices right now.



This is why I think Wizzie waits until right before Christmas.  He knows the rally won't hold and it will kill the consumer shortly after the announcement.  Why waste your last bullet now when you know you can use it in late November and get a quick jolt before the holiday and save Christmas before the house of cards comes tumbling down.
 
The markets look to be in rally mode regardless of this happening.  Insider buying has been ridiculous, so expect the S&P to pimp higher despite what Wizzie says.  They will probably give ole' Wizzie the credit regardless.  As always, be smart in these bear market rallies-- all that glitters is not gold (painful few days there as well!).  We are going to take a dive soon, but this is not 2008... this is 2011.  The fall will not be a rapid plunge like 2008.   

Think about taking a rubber kick-ball and throwing it off a tall mountain.  On the way down it will bounce up, sometimes very high, but it will always lose to gravity and continue the fall.  We are about to see how high that first bounce up will be... 

Saturday, August 13, 2011

Markets over the next month or two

I have not chimed in for a while but did want to get out a quick update on my view of what may happen in the markets over the next little while.

Wow, what a wild week we had! You like volatility? You like apples? How do you like them apples?
The week was more volatile than my two year after a birthday cake high which we got to experience today.
So what to make of all this you ask?

1) Things have changed and in my opinion the overall direction of the market over the next year is down.
2) This week the market appears to have put in a solid bottom base.
3) I would buy all dips early next week if they came.
4) The market is poise for a rip your face off bear market squeeze UP.
5) This move will go father than most think possible.
6) Just as everyone is convinced we are all good again something will come to light here, in Europe, or Asia and the market will fall to pieces again. Like my little girl did after the sugar high.
7) The next move down should go well beyond the lows we just put in last week.
8) Bank stocks will continue to lead down

And those are my thoughts. 1/2 of RandR

I hope all is well

Sunday, August 7, 2011

Everyone Sucks. A look back on Predictions made in Jan.

S&P says 'Suck it America.'

C'mon.  Wasn't this in the cards?!?  We have tripled our outstanding debt since 1995, spent money on pointless stimulus programs (and monetized our own debt by doing so- MAGIC!) and literally CREAMED the next 2-3 generations with debt levels that will require taxes to be raised 300-400% from the current levels.  Oh yea... and Timothy 'paper tiger' Geithner still has a job.  Guy isn't even a freekin' wizard. 
A story that SHOULD get the same reaction, if it were to be released:  'Barry Bonds Admits to Steroid Use.'  Maybe two people-- one a one-eyed, son of a pirate, 6th grader with learning disabilities, would be surprised about the Barry Bonds headline.  That is 2 more people than should be surprised about the US downgrade. 

I doubt the markets will be down for long on this announcement, but this week will be fun to watch! 

And now... The USA's economy visually presented as a monkey.  

On another blog site I started right before the Peak, I made my 2011 predictions: http://mymarketanalysisworld.blogspot.com/ It was the only post on this blog and I have no intention of writing any more on that site. 

Here is how they are panning out so far:
#1) Q1 2011 Earnings will disappoint and companies will start to firing not hiring— Earnings are already expected to lay an egg compared to 2010.  Q1 Earnings this year will most likely stink, and the market is no longer buying like a mad man when we have ‘less bad’ data (see crappy Dec. jobs report).  I expect that companies will end up doing a ton of the same as they did in late 08 and 09 to try and battle the price deflation—fire more employees.  We all know the biggest cost in a business is personnel, so the obvious answer is to trim the already trimmed staff to compensate (this is an attempt to keep stock prices up and fleece the pockets of the CEO).  I would not be surprised if earning reports are coupled with planned layoffs and very poor guidance.  What are companies supposed to do?  As US consumers get more and more cheap (No pay raises since 1998 will do this), they will only buy Groupon style ‘deals’ for everything from cruises to TV’s.  To keep sales NUMBERS up, PRICES have to stay low and go lower.  There are also a limited number of consumers who are going to buy another high-efficiency washer and dryer, flat screen TV or Blu Ray player (the cost has collapsed up to 70% from three years ago on these products).  And to think that retailers can actually ‘raise’ the cost of these items is just ludicrous.  The only real way to beat 2010 numbers is to have a bigger fire sale with lower prices, lower costs to produce goods and higher sales numbers.  The only way to do this is to cut salaries.   If you thought 2010 had great deals around Christmas—wait until 2011.  It will blow your freekin’ mind!
I must say I was wrong on the date for this prediction, but the action is coming true-- Q2 firing numbers are on the rise as the global slowdown is killing precious overseas profits.  I'll give my self a 50/50 on this one
#2) Europe is a zoo and will be a problem for the market(s) all year—What is going on over the pond?  Portugal, Greece, Italy, Ireland, Spain and Belgium look more roughed up than Jenna Jamison after 300 person orgy.  The Euro is a problem, but the biggest problem is not these hard hit countries—it is the stronger countries—Germany, the UK and France.  Stronger nations are seeing the full picture unfold and are realizing the mounting deficits that come from propping up the red-headed step children.  German’s, as it turns out, only likes Portugal when Portugal isn’t hemorrhaging losses—They also don’t really like Spain when Spain’s property values collapse 50%.  The Brits have never liked anyone else’s shit and I still don’t get why they are even in the EU (are they really in the EU when they still rock the Pound?).  While the US media will make is seem like there is no biggie here, they fail to recognize that Europe, while acting as one nation with a conforming currency, is anything but one nation.  There are different governments and different central banks—not one Fed, like the US.  Each of these countries, until recently, had complete control over their people and banking.  I think the last 12 or so years will go down in Europe’s history as the EU’s financial black plague (or some goofy silly dilly British saying).  The single currency experiment has created deficits, real estate bubbles and spending habits that Europe cannot sustain.  Will the currency break up?  If German’s had their way, Yes (but they have also tried to take over the world twice unsuccessfully).  Regardless of what happens with the Euro, 2011 is going to be an ugly year for the Europe--  and that is going to send money someplace safe… U.S. bonds and the dirty Green Back!
Hit this one on the head, but it was really easy to call... And to think all those analysts cried to get into Europe before the dollar collapsed.  Dollar collapse?  Ha ha-- we are the reserve currency.  That science project, the Euro is about to torched on the Bunson Burner.  
#3) Real Estate markets worldwide will start to collapse—The housing market cannot be sustained at these levels…. In China… or Brazil… or Canada… or Australia… or the US.  Globally, real estate is going to be a major drain on world economies in 2011.  Real Estate bubbles seem to affect economies like Kryptonite to Superman, but what surprises me the most about real estate bubbles is that no one ever sees them coming.  Every county (and citizens) listed above has had fair warning about real estate bubbles (some like the US have already had one collapse), but still it is sunshine and cookies as we watch property values climb by 30-50% annually because ‘there is a housing shortage,’ or ‘affluent investors are using real estate in X country to boost exposure to X country in their portfolios,’ or ‘XYZ country’s real estate market is different than the US because of X,Y and Z.’  Sounds allot like the girl who tells the boy he doesn't need a condom because she can't get pregnant???  And we will watch the house of cards drop each time.  It's hard to call it, but if I was a betting man, I would expect Australia to be 1st, but China, Brazil and Canada will follow very quickly.  The US is already in the beginning stages of a double-dip housing depression and will continue as there are no government interventions this year for housing (and the previous ones are the reason for the double-dip).  Sadly, real estate bubbles destroy the middle class in any economy as the home is the main drain of the paycheck, and if there is no increase in value, middle class members will never get ahead by selling equity gains.  China will have an extremely difficult time with this drop in property value as their culture does not treat real estate like America.  Here in the red, white and blue will foreclose or short sale in a heartbeat and use the reduction in mortgage payments to go to Hawaii thrice a year and buy our grand babies a $1200 Bugaboo stroller while we wait for the FHA’s cooling down period (a couple of years at the most) before we buy another home.  Asian cultures will stick with their properties... all the way down, keeping them out of the market for many, many years.
That's another ding-ding.  Right on-- I plan to see this escalating even more for Australia and Canada into the end of the year.  Canada is right on the edge and will be falling fast. 
   
#4) Market selling will lead to record low mortgage rates-- There is little good news in the markets for consumers in 2011, aside from low mortgage rates (If you missed 2010 or your home doesn't depreciate faster than a Pontiac).  The tide of selling extremely overpriced equities in the US markets will probably start in mid to late Q1 and become very apparent in the middle of the year.  The selling will become extremely intense when people realize that we are not going back to DOW 12,000 and people try to save their butts by shorting before the next guy gets the same bright idea.  As markets see-saw up and down as they try to find some level of equilibrium,  bond yields will experience another dip, which will again drive mortgage rates down to levels never seen.  While the markets are hyping the return to Cadillac Escalades in every driveway, $9 super burritos for everyone and general 2006 prosperity today, the real truth is that the US markets are barely holding on.  Profits are a direct result of slashing jobs and dropping prices (see #1).  World economies are unsustainable and financial institutions will not be able to handle the real estate market crashes.  The kicker to this prediction—QEIII. QEIV and QEV will result from these bond market calamities as the Fed tries to stop the deflation cycle (like stopping a 400lb stoned man from destroying the Chinese buffet).  These interventions will stop mortgage rates from dropping in the short term, but will also create future see-saws in the bond market, which will lead to more mortgage rate volatility in 2012.
The 15 year mortgage rate hit an all-time low last week.  I expect it to fall lower over the next 12 months. 

#5) People aren’t going to buy shit (unless it is Christmas)—  We have created a monster with the US consumer.  The US consumer is now a broke-ass baby-boomer, with no home equity, with the same 401K balance as 1999 (crappy 3% match), living paycheck to paycheck with minimal savings, supporting two 20-something World of Warcraft/ Madden 2012 video game junkie children who moved back into the basement after grad school, sucking the tit of a crappy job ( for health insurance to pay for the rising cost of Nicorette patches and dick pills), that doesn’t give a shit about some mid-year sale… because he/she knows the deals will be better at Christmas.  That’s right—stores might as well shut down on Jan 15TH and re-open in mid November.  The US consumer, unless they have lived on make believe planet Glork in a different solar system for the last 3 years, knows that no matter how good the deal is in May, July or October, the same product will be cheaper at Christmas... and you know what... they are willing to wait. 
This one is still on the table.  Will Christmas even be saved in 2012?  I expect it will... by wizards.  Q1 spending was decent, but Q2 was pretty terrible.  Will we collapse into Q3 or will the consumer stay resilient?  ha ha.  Consumer-- that is you and me!  I still see some BIG deals this year after a pathetic June- November season.  Maybe Bush can tell Obama to send some live checks around Dec 10th.  The ratings agencies would love that.  Make them 2 party checks that have to be signed off on by an employee of Wal*Mart!


I also think the Denver Broncos will start John Elway after the CBA-- You have to be wrong on one prediction...
I still think this has a chance!  There is no way they start Tebow!

Enjoy the Chaos this week! 
 RJK

2011 Market Predictions that make sense but not friends...

Thursday, August 4, 2011

U G L Y... You ain't got no alibi....

Whew...-- Is it New Years Eve at about 1:44am?  The only people left at the bar are the real ugly mofo's that are hoping for some action. U G L Y looking out there on the dance floor!  Nasty! 

Nope... it's only about 10:00pm.. the ball hasn't dropped yet-- it is about to get uglier.

Yep... 2008 ugly closer than you think

Pretty soon you will hear the 'we didn't see it coming' speech from XYZ financial advisor on CNBC (who has secretly been in cash and buying scratch tickets since March).

Watching this recession part deux unfold has been like a crowd watching a B-52 bomber full of babies, old people and a nuclear warhead (odd combination I know) come in without landing gear.  You see it coming from a mile away and the approach is slow.  As soon as you notice the plane has no landing gear you point and shout.  Everyone points and shouts.  Old people, young people, teenagers, stoners, sign spinners in cow suits selling Chick-Fil-A, dogs bark, people scream... NO ONE wants the plane to crash, but all the screaming and all the sign-spinning is worthless.  Nothing you do in the crowd can stop the impending crash landing. 

Don't look now-- this will not be a 'soft landing.'

Narnia is in Jepordy

We all know that the master wizard of Fed Narnia, Ben Wizzie is going to do another QE program, QeTHRee.  He will probably announce this at the next wizard conference at Jackson Hole.  The Feds have to buy bonds to keep bond prices stable.  With no QE, T-bills will yield zero in no time.  I expect this next QE to have temporary muted upside effects on the markets, opposed to the last two QE 'attempts' that have done nothing but stroke Wall Street's woody.  Too bad QeTHRee will collapse the (global) economy that already can't afford increases in food and energy...

QeTWoo was a complete failure.  QeTHee may create a buzz, but any strain on the consumer at this point will kill any short term rallies in the market.  The consumer (yes, that is a generic term for you and I when we are shopping) was destroyed at $100 oil... WHY does anyone think another round of QE would help if/ when it raises oil to $130.

Brush off dem' shoulders

As for great buys of 2011-- here is a shout out to the post earlier this year where we PIMPED TLT @ $89 a share.  Patting my back on this one (traded over $105 today).  A good buddy who is a financial advisor at a monster bank and I traded some dialogue today about the markets and he said that bond yields are to low.  Funny how I see them being too high.  A 2.50%  yield on a 10-year T-bill sounds much better than a negative return on SPY.  I will never see eye-to-eye with the big bank FA's however, but I told him that if he wanted yield he could buy some Italian, Greek or Spanish bonds, all of which will give you a much greater yield... That is if you are the kind of person who will put their hand in a running blender if someone drops a quarter into a batch of margaritas.

Sadly, it is probably too late to move into TLT, however if you bank at NY Mellon you should avoid making deposits-- It will cost you!.  Good thing mattresses are always on sale (wait a few months for better deals!)

Get out of Europe

I'm just saying-- no need to even comment on the disaster that is happening over there... If you see a lot of Swiss, wearing mink and strait blinging in 1980's style rapper gold chains at the local Ikea this weekend, here is the reason. 

Terminal Debt Cancer

If Grandma has cancer and she makes it 6 months on a 90 day diagnosis, that is great, but it doesn't mean she is not going to die of cancer.

The world is currently washed up in terminal debt cancer.  It is a terrible diagnosis, but Europe is very sick, the US is showing horrible symptoms, Japan is (and has been on and off) life support, and Canada, Australia, India, and China are getting sicker by the second (first sign is a real estate collapse...). 

The world is not going to end, but the next few years are going to be rough...

Short term rallies at this point will be muted, but the big scare in the markets will come soon when the 'HOW WILL WE SAVE CHRISTMAS' question comes into play.  If consumers (again, you and I shopping) don't buy buy buy at Christmas all bets are off for 2012-- store closures will be more common that baseball steroid allegations in 2006.


Tell Little Timmy to save his money-- Christmas this year is going to be CHEAP!

And all the financial porn gurus said it was different this time-- we could handle $100 oil and wage losses.  The consumer was resilient because they had pent up demand.  Demand shemand... mirage recoveries are not real.   

Funny how it's different this time never ends up being different at all.

Thursday, July 28, 2011

How to Raise Some Money after Default: QeTHRee getting closer

It just keeps getting better!
This just released from the White House: 
The White House understands that not raising the debt limit will mean many American's will not be paid.  We are having trouble with a real 'BONER!'  We think this is a real bummer, but there are two plans that the administration is ready to institute immediately if there is a default. 
I was just as excited as you!  Here are the ideas.

Hillary Clinton's Budget Buster Bikini Car Wash. 


White House Bake Sale


It looks like Topless Hillary Clinton is the only answer out there!  I knew it! 

QeTHRee gaining some traction?

There are many stories swirling about needing QeTHRee.  Here is just one example:  QeTHRee Needed!

From this article:
If the Fed were to engage in a new round of bond buying — call it QE3 — it could push long rates lower as it did under QE2 and provide needed assistance. Besides the immediate past, there is ample precedent for such a gambit.
Huh?  QE2 actually CREAMED long term rates.  Even Captain Obvious knows this.



QeTHRee is gaining traction and is a sure thing at this point.  Will it work?  If you like high food and gas prices then YES!  I anticipate that the equity markets will not react the same-- higher inflation will zap any recovery fast!  Uh oh... what if this happens around Christmas?  QE2 saved Christmas 2010... QeTHRee will be the Grinch in 2011.  $175 to fill the Escalade = less presents under the tree!

Could the US 10 Year Treasury trade in the low 2's or high 1's in the not so far of future?

Hell yea!... if (when) we throw QeTHRee on this fire. 

Rueter's explains the PAIN that will come from QeTHRee here:  QeTHRee more harm than good.

It is just starting to get interesting... Smells like someone is brewing up a recession to me!  This one is home brewed too!  Compliments of your Master (wizard) Brewer Ben Wizzie! 

Tuesday, July 26, 2011

Collateral Damage. History of Debt Ceiling. Sprinkler heads.

I'm with Stupid... I think? Or are you with Stupid?  Am I stupid? 
"We can't allow the American people to become collateral damage to Washington's political warfare," Obama said.
Moments later, Boehner responded that the president "wants a blank check" to continue government spending that is "sapping the drive of our people."

Obama is definitely trying to figure out something—I will give him that, but he looks pathetic in doing so.  If the republican’s goal is to destroy Obama’s image until the last second, they seem to be doing a great job.  I highly doubt that these two clowns will fail to figure some way to keep the circus going, but I am sure it will be a band-aid fix and nothing else.  The debt ceiling debate will be in full swing again when the real dog-and-pony show, the presidential elections, start for 2012. 
As for collateral damage, I disagree with Obama’s statements.  Yes, there will be some pain if the US credit rating is downgraded, but it doesn’t mean it is time to buy guns and ammo.  Japan lost their AAA rating 10 years ago and they have very low rates and the Yen is a very strong currency.  At this point it is all politics… tick tock, tick tock politick, tock.  The clock may be ticking but this is all a charade to make Obama look worse.  Nothing else.
Maybe these guys need to do this deal the old fashioned way:  A bottle of Whiskey, a pen, a paper and a hand-gun.   
History of the Debt Ceiling…        
Here is an interesting story on Wallstreetcheatsheet.com about history of the debt ceiling.  The debt ceiling has been raised 77 times since it was put into place.  This story puts some perspective on how much of a puppet show this really is.

In fact, the debt ceiling has already been increase three times during Obama’s presidency, twice in 2009 and once in 2010 when both the House and Senate were led by Democrats.

During President George W. Bush’s two terms in office, the debt ceiling was raised 7 times, the first time by a Republican-led House and a Democrat-led Senate in June 2002, the second with a Republican majority in both houses less than a year later, and the final time by a Democratic majority in both houses in November 2008. During Bush’s tenure, the debt ceiling was increased from $5.95 trillion to $11.315 trillion.

Bush’s 8 years doubled the debt ceiling and Obama has already maxed out the $14.3 trillion line. 

The real question that needs asked is, ‘Why is there a debt ceiling if there is no intention to EVER pay it back?”

Does anyone ever see us paying this back?  I suppose in 30 years when all the baby boomers finally die after receiving Social Security for 3 decades we may have a chance, but in reality there is no feasible way we can pay back this debt.

Default or Pay it down.

If you or I was to get into a situation where we had borrowed too much money we would have to come to some conclusions about how we planned on structuring our current finances.  Do you Default (personal bankruptcy) or do you pay it down (sacrifices to your current life style)? 

This is really an easy situation when presented this way.  If America has raised the debt limit from $5.95 Trillion to over $14.3 Trillion in the last 10 years, there is NO WAY they can change the way they are spending… the obvious answer would be default, or bankruptcy, for a consumer.  Somehow, in some way, you have to get spending in control.

The answer cannot always be to print more money (sorry Ben Wizzie).

Sprinkler Heads. 

I moved into a house in 2009 (foreclosure that sold for a 27% discount from the previous sale 2 years prior) and had a big problem with the sprinkler system. 

I had one guy that recommended replacing the whole sprinkler system—tearing out all the lines and rerunning the system so it was more efficient and effective.  All this for a cool $4000. 

I suppose this was an option, but the thing about options is that you have a few to choose from.  We concluded that it wasn’t the sprinkler system that was broken, but the sprinkler heads that needed updated and replaced.  The Home Depot carries these for about $4 each.  At 10 heads, the cost to replace the heads is a 90% discount to replacing the entire sprinkler system.
What did I learn from this? 

A system is not always broken, even though it seems to be working improperly.  Sometimes all you need to do is change out the heads.

Going Back in Time...

- Sen. Barack Obama (D-IL), March 20, 2006
The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. Government can’t pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. … Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.”
I think the government could learn a lot from my sprinker story…  


BONUS MATERIAL!!! For your visual enjoyment-- $15 trillion in pictures!  Great site! http://www.wtfnoway.com/