An Open Letter To Detroit

Dear Detroit,

In 2004 I declared personal bankruptcy. There. I said it. It's out there. But if you've been reading TORC from the beginning, can you really say you're surprised? I wasn't. And, to be honest, I don't really think the six credit card companies that issued me lines of unsecured credit were either. Detroit, I want to tell you what to expect and how to cope with the humiliation and despair that comes with bankruptcy so that you don't end up like Donald Trump: A frightening, self-deluded weirdo who sends tweets out like Osama Bin Laden taunting the American public with hateful diatribes.

Byzantine Coin

When I declared bankruptcy, my only assets were a 12 year-old car and an 11th century Byzantine Empire coin. My creditors, surprisingly, didn't want either of these. My bankruptcy attorney, a very patient and understanding man looked at me throughout my interview as though thinking "There but for the grace of God go I." A look I'm too familiar with. What he told me I remember to this day because it comforted me in the hard times that would follow. He said "People fail. There is no shame in that. But when you fail, it's important to do the right thing and get back on track. Now you could have just taken your 12 year-old car and your Constantine the Second late Byzantine Empire coin and went underground, but you did the right thing and there's virtue in that decision." So, Detroit, I did the right thing and now it's time for you to do the right thing.

There are three things I learned from my experience and I'd like to now impart them to you, my dear friend, Detroit.

New Detroit!

1. A New Beginning: When I had my job as a stage manager for a California touring production of Noises Off I was raking it in at $1,200/week and then, suddenly they closed the show. I had to get rid of everything I owned. CDs, furniture, food, whatever I could sell got sold. Eventually, I got a new job, changed my name for a little while to Chase Talbot, wore a fake mole on my cheek, and carried a
walking stick like a real dandy. Some said I had a nervous breakdown, while I prefer to think of this as "reality reinvention". Detroit, don't look at this as an ending, think of it as a new beginning! Now you don't have to be the cancerous tumor of the blighted American landscape! You can become anything you want to be, a pre-Columbian Mayan City, Florence in the 15th Century, 18th Century London. Anything without electricity or plumbing will work.

2. Remember Who You Are: Detroit, you've got a lot going for you. When you started out as a trading post, you had lush forests and many beaver furs to sell. It's never too late to get back to your roots. Raze everything to the ground, grow your forests again and invite the Quebecois in to once again travel in their canoes to barter fur.

3. Let Go: This is the most painful thing about bankruptcy. You need to let go of ever becoming what you hoped you'd be. You will never be New York, Chicago, or Los Angeles. You won't even be Houston or Kansas City. Embrace this quickly and your pain will be reduced tenfold. Detroit, I am your friend, and I am telling you to give up the Tigers, the Lions, and the Red Wings. Give up GM and Motown. Give up public transportation and a functioning, viable budget. Those days are behind you. But who knows? Perhaps something else will come your way.

I know this might sound like tough talk, but Detroit, these are tough times. In an earlier TORC blog, I said "I'd rather eat a plate of human shit than live here" and I was right. I will also say that my online enemy did not warn his investors and to them all I can say is that perhaps it's time you started reading someone with the guts to call it as it is. But I digress. Let me just say that as someone who has suffered with financial hardship as you are now, it will get better and that hope is an asset you can't afford to sell off.

Stock Watch: There's been a large infusion of capital due to a higher salary. Value: $1.12

TORC: I Hate Baseball!

America's Pastime

When I was nine, my father took me outside with a glove, a bat, and a ball and taught me how to throw, catch, and hit. He made me stand outside in the pouring rain and the freezing snow until he realized I would always fail to live up to his expectations. And when I recovered from double pneumonia and tuberculosis, he was right there by my side ready to remind me, for the rest of my life, how his dreams of having a son he could be proud of were as far reaching as a home run in Fenway Park. He taught me more than baseball, he taught me no matter how hard I tried and how much blood I coughed up, I would never live up to the expectations of a detached and emotionally distant father. This, dear reader, is the American version of the masculine right-of-passage. And now this tradition is under attack by my Google rival and namesake.

El Paso, the second largest American city without a baseball franchise, has finally decided to step up to the plate in an attempt to join the elite list of metropli including New York, Dallas, and Tampa Bay. They are attempting to raise, through bonds, enough money to attract investors to buy their way into the American fabric. Everyone knows that by spending hundreds of millions of dollars in a multi-use sports complex that the local economy will blossom bringing local residents the peanuts and Cracker Jacks they so justly deserve. Ask any Brazilian who is, as I write this, dancing and celebrating in the streets as their country prepares to welcome the World Cup. But there is one voice of insidious hatred for this prospect and here is what he has to say: 

“Sports stadiums have gotten to be very expensive and they’re not necessarily going to have a full payback to the community. They squeeze out tax dollars that are needed for more essential purposes.” - Richard Ciccarone, Bloomberg News, May 28th, 2013.

The Sultan of Swing?

More essential purposes, indeed. One might ask this Grinch who stole second what is more essential than taking your family to a baseball game to show their sons and daughters how far they've fallen short of their expected abilities? What is more essential than rooting for a group of highly paid strangers to win in a game that will have no direct affect on their lives? How else are we to train the younger generations to live vicariously through others' talents? I'll bet Al Qaeda thinks there are a lot of things more essential than witnessing an American tradition. Perhaps my online nemesis would be more comfortable with public beheadings or the stoning of adulterers.

And to say that these stadiums would not offer a full payback to the community is like saying that Euro Disney did not bring Europe from the dark ages (again) and into the beatific light of frenzied consumerism. Where else should we be spending this money? On public transportation? Education? Healthcare? If my unempathetic ether-opponent took the time to actually see how far those services have fallen into complete disarray, he'd realize that watching a public spectacle might be the only thing our society has left to enjoy. But perhaps the OTHER Richard Ciccarone is too busy driving around in a limousine and drinking from the elegant high-heeled shoe of one of his model/actress girlfriends to understand what we, the regular person, really need. And believe me, it's not another bus to take us to our low paying jobs or another school book for our children who will never compete with the Chinese. It's a baseball, a bat, and a glove. The holy trinity of Americana.

Stock Watch: Due to a change in jobs and a higher salary, TORC has surged back! Value: .97

TORC: No Longer We Live Like Pigs!

Welcome back everyone! It's been a long time since I've last written. Financial advice doesn't just happen, it needs to be researched and studied, data must be collected and analyzed. There is work to be done and reputations to soil. I know the other Richard Ciccarone thought I was out of the financial game, but now he must tangle with a leaner, more savvy Google adversary. For you see, I have subscribed to the Wall Street Journal and I've read two or three of the articles. That's right, this is TORC 2.0, and this time it's personal.

Bedford Falling

Today on TORC, I will dissect and analyze the film "It's a Wonderful Life". You may ask "Hey, I thought this is a financial blog?" And you'd be right to ask, my worried reader. But beneath that iconic film of American values lies a lesson in municipal bonds that can not be overlooked. If you haven't seen the film ... actually, if you haven't seen the film I'm not going to explain it here because either you live in a cave or you're too successful to watch television, in either case, you won't care. But in the film there is the town of Bedford Falls, an idyllic community complete with a pharmacy, a bank, a savings and loan, and a pond with no adult supervision in which children fall through the ice to a frozen grave. In this town we meet the inhabitants who drive cabs, act as local police, run taverns, and occasionally poison people at the pharmacy. This is the world of George Bailey, whom after he asks an angel to see the world without his existence, is then thrown mercilessly into a dystopian vision of an alternate universe. A universe in which his greedy nemesis, Henry Potter, slumlord and majority stakeholder in the local bank, finally gets his clutches on the town and renames it Pottersville.

Pottersville or Hottersville?

And here is where TORC takes a closer examination from the perspective of municipal bonds. In Bedford Falls, there is little financial opportunity. George Bailey must continually defer his dreams of going to college due to lack of finances. His father runs a flailing savings and loan and can not afford to send both George and his brother to school. There is a quaint tavern that does fair business, a taxi service which apparently only has one cab in its fleet, and a local floozy who is giving it away for free. Now, cut to the world without George Bailey: Pottersville. It is a thriving, financially booming town with an active nightlife, a moving economy, and a bustling population. The quaint tavern is a busy and profitable club, and the streets are filled with people enjoying themselves, and jazz music fills the air. The town floozy, when she's not being arrested, has secured employment as an erotic dancer and probably makes more money than she ever imagined in a world filled with George Bailey. Sure, crime has increased and it's louder, but aren't these indicators of a thriving community? The once sleepy, economically dormant hamlet is now a place you'd actually want to visit.

The sleepy town quality has been replaced, but isn't that the story of America? The small town boy or girl goes to the big city to amass their fortune and sell their talents on the open market. Isn't this what we all strive for? Even George Bailey himself complains incessantly about getting out of Bedford Falls and seeing the world. It literally takes an act of God in which he's thrown into a world without money, identity, or friends; a world where his own mother treats him like a creepy stalker and he's hounded relentlessly by the police, for him to beg to return to his own world. Who wouldn't? It's a nightmare acid trip as a result of God's wrath. But I guarantee you, if George Bailey had the stones to stick around, I bet Pottersville would be a place he'd probably never want to leave and a town where he could probably make a decent living.

As a municipal bonds analyst, this is a very telling metaphor for how to find solid investments for this market. Would you really invest in Bedford Falls with its poor infrastructure and shoddy public service? (Apparently there is no money to plow the streets after a snow storm and the police are busy serenading honeymooning couples.) For my money, you can keep Zu-Zu's petals, I'll take Nick's Bar anytime.



Stock Watch: TORC has taken a severe tumble in the market due to some poor financial decisions which I'd rather not get into. Share Price: .23

Immigration & the Municipal Bond Market

While the nation performs our twenty-year cycle hand wringing penance about immigration and pretends that it's the first time in its history its faced this problem maybe the rest of us can have a civil conversation. For those of you who can discuss this topic like adults without stooping to phrases such as "border fences", "identity cards" or "filthy Papists", come in and enjoy the fresh smell of reason baking on the warm oven of facts served on a plate of truth.

Cities with higher populations of immigrants do better in the municipal bond market than cities that do not. Three of the top municipal bond funds feature California and New York, states with cities that have 5 of the top six highest immigration populations. We at TORC believe there is a correllary (not necessarily causal) effect, but one which is worth examining even as an indicator. And here are the reasons we believe this is so.

1 - Cheap labor: It's the dirty secret of American history that we may not have come so far so fast if not for the whole slavery thing. Could you imagine if this country had unions in the nineteenth century? I'm pro-union, but let's face it, if you're building a nation the first thing you want to do is increase your exports cheaply and fill your coiffures. One of the first things Hitler did to increase productivity was break the unions. Immigrants who come here will work for less and suffer longer hours which creates more wealth for companies. Yes, it's disgusting, but when you're playing the muni bond market, the games the game.

A petri dish of
superhumans!

2 - Diverse populations: Darwin has explained to us that the strongest species are the ones that adapt and cross-breed. It weeds out the weaker genetic flaws by mixing the strongest of two different types of strains. When you introduce a new type of DNA into any pool, what you get is a blend of the best. And this isn't limited to just the atavistic principles of breeding, but also food, music, architecture, and ideas. Take for instance when the filthy Irish came to this country, they brought to our shores the gift of literary appreciation and wholesale grifting. The Italians brought with them opera, exquisite food, and the drive-by shooting. When a city opens its doors to immigrant populations, it's also opening its door to ideas and ways of doing things that will only create a stronger, more vibrant eco-health.

3 - If you can't breed them, buy them: The entire American economy is based upon one simple fact: if people stop buying, we die. Remember 9/11? The message wasn't "Loose Lips Sink Ships" or "Buy Bonds", it was "For the love of God, buy something! Anything!" America needs to repopulate its consumers and currently the industrialized nations of the world are not keeping up with replenishing. We're lucky because we can just turn on the immigration faucet and repopulate whenever we want to! This in turn creates a functioning economy and those cities that have immigrant populations, see the benefits of that first.

So go out and hug an immigrant! Make a baby with one and enjoy their economic and carnal fruits!

Stock Watch: TORC stocks took another dip due to a slight depression and overwhelming work load. Share Price: .97