Peter Yastrow's Blog

Fiscal Stimulus: SIZE and SCOPE

The Romans built roads. They started building roads over 2200 years ago. Using concrete and stone the Roman senate conceived of roads that would connect all of the territories of the vast empire. This would allow for trade and provide a way to move troops quickly. Roads hundreds of miles long. The great pharaohs of Egypt built the great paramids over 2 thousand years ago- literally changing the horizon with their incredible height and size. These man made mountains required great planning and enourmous vision.
There are many famous Gothic cathedrals in Europe. The gothic cathedrals are famous for the long thin windows and flying buttresses. The style evolved from the fact that the town’s people could only carry stones that were of certain size. With smaller stones, it is impossible to create wide windows, so they made the windows very tall to allow as much light as possible into the cathedral. The walls needed to be high, for the tall windows, and required more support. 13th century engineers designed systems of external piers called flying buttresses which could support the massive walls.
Notre Dame Cathedral in Paris was started in the early 1100s and was not finished for more than 200 years, with different kings responsible for the ongoing project.
They really thought big back then. Egyptian kings tried to build mountains, the European kings built fantastic structures that still inspire and awe us today. What will our leaders create? What type of vision and planning are we engaged in today as we seek ways to stimulate our economy. Those hundred year projects provided people with careers, and trades. A mason, his son and his grandson may have all worked on a cathedral. Those hundred year projects gave direction and shape to the society. It allowed people to plan a future, gave them a path to happiness.
A huge plan would be a great thing for the United States, a multigenerational project of immense size and scope that would galvanize our society and give us some hope and direction. Imagine how the country might have responded to a declaration of gasoline independence, or a national project to completely revamp the transportation system. One project that I am particularly fond of would take more than 40 years to build. We would connect a giant platform in low geo-synchronous orbit directly to the earth with an elevator. This elevator could then lift payloads into orbit in a matter of a few hours, and thus would be assuring us the ability to access space easily, and with proper vehicles, could allow global travel times to be cut down to a matter of hours. Imagine taking the East-Coast elevator at 8:00 a.m. – being in orbit by 11:00, and being in Australia by 11:45 by way of shuttle. Imagine the cost of energy being almost free to us as U.S. citizens because of our awesome solar collection facility-orbiting overhead. We need to think big. We need a 21st century equivalent to long roads, stone mountains, and giant cathedrals.

j.o.y. to the world

peter

CNBC – Monday’s Market Moves

Airtime: Mon. Aug. 2 2010 | 6:30 AM ET

Insight on futures, with Kathy Lien, GFT Forex; Carl Larry, Oil Outlooks & Opinions; and Peter Yastrow, Yastrow Origer.

CNBC – Monday Morning Trade

Insight on the market action, with Matt Smith, Summit Energy; Andrew Wilkinson, Interactive Brokers; and Peter Yastrow, Yastrow Origer.

Decision Making 101

Executives, traders, CEO’s are all paid to make decisions. They are expected to look at all of the facts, and determine the best course of action. Weigh the options, consider the probabilities, calculate the expected values and make a decision that will have an impact on the lives of all of the people involved. If a company chooses one vendor over another, not only are all of the people affected at both vendors and our company, but the lives of all of the children and spouses as well. Decision makers are burdened with tremendous responsibility, and must cope with stress and doubt around the clock.

When the future seems more uncertain, decisions become even more difficult. When conditions are in a state of flux, EVEN IF THEY ARE IMPROVING, a decision maker often chooses to wait. Waiting and being patient are valued skills, and when the facts are changing, they are most needed. Starting a course of action, when you know that in a matter of days it might be necessary to stop, and even reverse course would seem reckless and frantic. Therefore decision makers will sit on their hands and do nothing when conditions are changing.

Knowing this:
1.What will happen before a big vote on tax increase ?
2. What will happen before a big vote on tax decreases?
3. What will happen during stimulus package implementation?
4. What will happen when rates are getting slashed?
5. What will happen when rates are getting raised?
6. What will happen before almost anything big gets finalized?

If you answered: We should see economic activity slow – YOU RE RIGHT !

This crippling fact is often why the Government and the Federal Reserve seem to get results that are contra to classic economic dogma. They seem to forget that at the end of the day, the markets, and the economy consists of millions of individuals, all acting rationally, all fearing their own humanity, not wanting to commit an error. They will each choose to wait and see how things unfold.

If our Government wants to help our economy, they should understand that enacting policies has a large cost. Unless the benefits are going to be very large, it is probably best to do nothing. Doing nothing reassures decision makers. Doing nothing lets decision makers plan for the future. Our medical community lives by the Hippocratic Oath; First Do no Harm. I can think of no better motto for our Government to live by.

J.O.Y. to the world

peter

“Navigating Choppy Trading Waters” – Peter’s CNBC guest appearance in NYC

Airtime: Wed. May 12 2010 | 5:31 AM ET

Peter Yastrow, of Yastrow Origer, tells CNBC how he’s navigating the choppy trading waters.