Central Perk: 26 oct. 2012

vineri, 26 octombrie 2012

Mish's Global Economic Trend Analysis

Superb Hugh Hendry Interview on Gold, Hyperinflation, Treasuries, Stocks, Japan, China, Real Assets
Credit Crunch in Europe; Eurozone Lending Sinking Fast; Money Supply Contracts
Dire State of Affairs in Illinois; Mish Six-Point Proposal

Superb Hugh Hendry Interview on Gold, Hyperinflation, Treasuries, Stocks, Japan, China, Real Assets

Posted: 26 Oct 2012 12:54 PM PDT

Here is an excellent interview at The Economist Buttonwood Conference featuring Hugh Hendry. You may have to enter your email address to play, but I doubt it has to be accurate as there was no verification process.

The interview is well worth a play in entirety, covering Gold, Hyperinflation, Treasuries, Stocks, Japan, China, and Real Assets. It's the best interview I have seen lately.

Link if video does not play: Buttonwood Gathering Part 5.

Select Quotes

On US Treasuries: "Don't tell me China will sell their US treasuries. If they sell their treasuries, the renminbi goes higher and higher and higher. And their companies that export go bust."

That is something I have been saying for years. Indeed, the Fed and the US Treasury would be pleased to have China dump treasuries.

On Chinese GDP: "We have a roadmap from the 1920's. The UK played the role of the US and the US played the role of China. With the leverage of the creditor cycle, UK GPP peak to trough fell 8%. One year, in America, in real terms, GDP fell 23%. That's the leverage. Now am I sitting here with video cameras saying the Chinese economy will contract 23%? Of course I'm not. But if we have a coffee later I might say something different."

That last sentence above generated tremendous laughter at the conference .

Negative 23% is excessively negative, but we are in the same general camp. China is going to surprise way to the downside. China will not economically pass the US as The Economist expects.

For further discussion, please see The Dating Game: Michael Pettis Challenges The Economist to a Bet on China.

There was an interesting comment on gold at the end. Hendry had been long gold and short the S&P in a paired trade since 2006. That trade worked exceptionally well through 2008. He still likes gold but not as enthusiastically as he did, and he does not like the miners.

Regarding miners, I disagree.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Credit Crunch in Europe; Eurozone Lending Sinking Fast; Money Supply Contracts

Posted: 26 Oct 2012 10:29 AM PDT

A collapse in demand for credit is underway in Europe. Bank lending is down sharply and the decline has "surprised the experts".

I wasn't surprised in the least, but nonetheless, please consider Lending in the euro zone is declining fast, courtesy of Google translate (slightly modified by Mish) from Die Welt.

In the crisis-hit euro zone, fears rise of a credit crunch. The sharp decline in bank loans to companies surprised even the experts.

The sum of bank loans to companies and households in the euro zone shrank more than expected in September. Bank lending in comparison to the same month last year shrank by 0.8 percent, said the European Central Bank (ECB). Analysts had expected a decline of only 0.6 percent.

The lending to companies fell month on month by 20 billion euros after it was dropped in August only to six billion euros. In many countries recessionary demand for loans is naturally low.

"At least in some euro area countries, the capital constraints affect the supply of credit from the banks to the real economy," said Commerzbank expert Michael Schubert. The complaints about the business in France over high hurdles in lending would have declined in recent months, is slow. A similar picture is apparent in Italy.

Credit Crunch or No Demand?

The article bills this event as a "credit crunch". I would define a credit crunch as demand for credit that is not met. Here, I primarily see falling demand. Why businesses should want to expand in this environment is beyond me, and indeed they don't.

So if there is no reason for businesses to expand, especially if Germany and France have hit the skids. And both countries have hit the skids (as expected, at least by me) and as noted in Eurozone Downturn Deepens, PMI at 40-Month Low; Manufacturing Weakness in Germany; Considerable Service and Manufacturing Contraction in France.

So why the surprise? The answer is most of these guys cannot think.

Money Supply Contracts at Sharp Pace

Ambrose Evans-Pritchard reports Eurozone nears Japan-style trap as money and credit contract again.

Data from the European Central Bank show that the tentative rebound in the money supply over the summer may have stalled again in September.

The broad M3 gauge -- watched by experts as an early warning signal for the economy a year or so ahead -- shrank by €30bn and is now down by €143bn since April. This is highly unusual.

"The message is clear," said Lars Christensen from Danske Bank. "The ECB needs to stop obsessing about fiscal issues and do real quantitative easing (QE) if it wants to stop the eurozone going the way of Japan."

Loans to firms and households fell 1.3pc as banks continue to shrink their balance sheet to meet tougher rules. Private bank lending has been falling almost continuously since April.

"This credit contraction is what happened in Japan in the early 1990 and we have to be careful not get into deflationary spiral," said Prof Richard Werner from Southampton University, a Japan expert. "They to need to launch true QE or an expansion in broad credit creation, and it cant be done easily."

Message is Clear

Lars Christensen from Danske Bank says the "message is clear" and proposes QE as the solution. Prof Richard Werner from Southampton University, an alleged "Japan expert" made similar statements.

What's clear is both are spouting complete economic nonsense and both are devoid of any knowledge of history. Japan launched various monetary and fiscal stimulus programs over the course of 20+ years and it got them nothing but a massive pile of debt to show for it.

Please note that eurozone excess reserves are piling up to the tune of €770 billion as of September according to the Wall Street Journal report The ECB, 'Sterilization' and Money Supply. It's nearly €900 billion now. Lovely.

QE is not going to stimulate the demand for credit. It didn't in Japan, it didn't in the US, it hasn't so far in Europe.

More QE in Europe won't spur lending either, but it might give gold a nice lift.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Dire State of Affairs in Illinois; Mish Six-Point Proposal

Posted: 25 Oct 2012 11:36 PM PDT

I just finished slogging through a 69 page PDF by the State Budget Crisis Task Force outlining the dire state of affairs in Illinois.

I knew in advance that pension funding is the biggest issue facing Illinois. The task force shows exactly that. Here is a summary.

Pension Funding Levels

Teachers Retirement System (TRS) - 46.1%
State University Employees Retirement System (SURS) - 45.3%
State Employees Retirement System (SERS) - 34.9%
General Assembly Retirement System (GARS) - 20.2%
Judicial Retirement System (JRS) - 31.0%

Those funding levels assume 8% returns going forward, something that is not going to happen. So as bad as the above looks, the true pension underfunding is even worse.

Illinois' infrastructure is in bad shape, and the report has the details.

There were many things in the report that I did not know about including the loopholes that let legislators pretend Illinois' budget is balanced when it's not.

Here is a surprising fact: Illinois has more governmental taxing agencies than any other state including California, a grand total of nearly 7,000 taxing bodies!

Here's a juicy tidbit on infrastructure "Nearly two-thirds of Metra and CTA passenger rail cars were in a marginal state. Nearly half of Metra and CTA train stations were past their useful life, and about one-third of CTA and Pace buses were in the last quarter (or less) of their useful life."

The report finished with "recommendations" but they were broad stroke, budgetary meaningless things like timely reporting, long-term planning, accrual planning, etc.

I am in favor of most of the report recommendations, but they will not solve a single problem.

Here is the scariest single sentence in the report "If the projected deficits were paid for by borrowing, debt service costs would grow to consume all sales tax and income tax collections in just five years."

Illinois is insolvent, but what can be done about it?

Mish Six-Point Proposal

Immediately end all defined-benefit pension plans
Default on pension obligations in the fairest possible manner (cap benefits)
End collective bargaining of public unions
Eliminate prevailing wage laws that are murder on local budgets
Lower corporate income taxes to attract business
Eliminate property taxes as the primary method of funding schools

Point number two is against the constitution but I believe it could be accomplished by taxing all benefits above a certain amount at 100%. The alternative is also simple. If the money is not there (the pension plan is bankrupt) all payouts will cease.

The way to win approval from the unions is to set the cap high enough so that the majority of union members get 100% of their benefits.

State Task Force Report

Everything that follows is from the report. It is lengthy and will be easier to read if it is not in blockquotes as per my usual format. Emphasis is generally, but not necessarily mine.

"What Would It Take" Calculations

If the projected deficits were paid for by borrowing, debt service costs would grow to consume all sales tax and income tax collections in just five years.
To close the gap with an income tax increase would require the individual tax rate to rise to 7.1 percent from the then-existing 3.0 percent and a proportional rise in the corporate rate.
To close the gap with a sales tax increase would require the rate to jump from 6.25 percent to 13.5 percent.
To close the gap with spending cuts alone would require over 25 percent across the board reductions in all spending (other than for pensions, debt service, and transportation).

Of Illinois' three biggest fiscal problems — pension costs that are crowding out the rest of the budget, Medicaid cost increases that have grown faster than the state's resources and will be unsustainable as the federal ARRA funds expire.

Despite greater recognition that the growth in pension costs cannot be sustained, different views of how to cut or shift the costs have led to a stalemate. No action on pension reform is expected until after the November 2012 elections at the earliest.

Illinois' demographics show an aging population with a trend toward fewer workers and more retirees, which will pose daunting fiscal challenges in the years ahead. Illinois is also a diverse state with a variety of competing interests, which makes it difficult for political leaders to reach consensus on key issues.

The Politics of Spend, but Don't Tax

While in Illinois, as elsewhere, the desire to please constituents by expanding government services without increasing taxes is a given, the origins of the structural gap between spending growth and sustainable revenues can be traced to the 1990s. Governor Rod Blagojevich (Illinois' first Democratic governor since 1976) was elected in 2002 with an agenda to expand programs for children, seniors, and the poor.

However, conflict between Blagojevich and Speaker of the House Michael Madigan (both Democrats) meant that tax increases became virtually impossible as the two "checkmated one another.… The governor declared he would veto any general tax increase…. Madigan blocked all the revenue initiatives proposed by the governor."

Illinois' Squishy Balanced Budget Requirement

It would appear that Illinois' budget is required to be balanced. The Illinois Constitution states that "Proposed expenditures shall not exceed funds estimated to be available for the fiscal year shown in the budget"

However, Illinois' balanced budget requirement has some serious limitations.

First, it refers to anticipated revenues, and there is no requirement that the state adjust its spending if the anticipated revenues are not realized. There is nothing to stop a governor or General Assembly from using an unrealistically high estimate when crafting the budget.

Illinois' balanced budget requirement is also a cash concept, referring only to the current fiscal year. This means that the balanced budget requirement does not refer to future pension liabilities or unpaid bills from the previous year. Each fiscal year from 2009 to 2012 ended with a larger stack of unpaid bills — $8 billion at the end of fiscal year 2012 — and each year these bills were ignored when projecting balance for the next year's budget.

Underfunded Retirement Promises Are Crowding Out Other Needs

It is widely recognized that Illinois has the worst unfunded pension liability of any state. Its five retirement systems had a total of $85 billion in unfunded liability in 2011 (Table 2), and the figure has increased since then. Dealing with some of the lowest funded ratios of public pensions in the nation has contributed to the state's ongoing fiscal crisis. Illinois' pension problems were cited by Moody's Investors Service when it downgraded the state's bond ratings in January 2012, making Illinois' credit rating the lowest of all fifty states. However, Illinois has done nothing to reform state employee pensions since that time and it is doubtful that anything will happen before 2013.

Table 2 describes the five retirement systems the State of Illinois is responsible for funding: Teachers Retirement System (TRS), State University Employees Retirement System (SURS), State Employees Retirement System (SERS), General Assembly Retirement System (GARS), and Judicial Retirement System (JRS). It also shows the Illinois Municipal Retirement Fund (IMRF), which the state administers but the local government entities are responsible for funding. Most of the state's
$85 billion in unfunded liabilities are in the three largest funds, TRS, SURS, and SERS. All five state funds have funding ratios below 41 percent. The IMRF has a much higher funding ratio because of a state law that obliges local governments to make "annual required contributions" (ARC).

click on chart for sharper image

The Way Pension Costs Are Reported Can Obscure the Problem

Illinois' pension systems are likely in a more dire fiscal condition than they seem. Illinois' three largest pension systems discount future pension liabilities using an assumed rate of return on investments of around 8 percent. Since the financial crisis, ongoing economic instability in Europe, and worries of a double-dip recession, many believe that this assumed rate of return is overly optimistic. Most state pension systems have exceeded an 8 percent rate of return over the past several decades, but the rates have been much lower in recent years. Lower discount rates will soon be required in Illinois and other states.

Under new rules approved by the Governmental Accounting Standards Board (GASB) in June 2012, Illinois will be required to report liabilities using "market rates," which are typically closer to 5 percent. Although this change will no doubt have a positive impact by more accurately estimating the level of state liabilities, it reveals an even more precarious financial position. For example, "under the new rules, the Illinois Teachers' Pension System [TRS], one of the country's worst funded, would have shown just an 18 percent funding ratio as of July 2010."

Schools

In Illinois, total preK-12 education spending per pupil slightly exceeds the national average, but the proportion that comes from the state's own resources is low in comparison to other states. In the 2008-2009 academic year Illinois was ranked forty-eighth in per-pupil education revenues from state sources, but tenth in per pupil revenues from local sources. Illinois' heavy reliance on local property taxes to fund education means that disparities between wealthy and poor communities are reflected in the quality of the schools.

During the 2009-2010 academic year, Illinois' wealthiest elementary districts spent about $24,000 per pupil while the poorest districts spent about $6,000. A 2010 national study found that Illinois has the second-highest disparity between high-poverty and low-poverty schools.

Illinois has the third highest number of school districts of all U.S. states. More than 200 of Illinois' 868 school districts have only one school.

Underinvestment in Infrastructure

Crowding out has also become increasingly evident in the case of Illinois' aging infrastructure. In 2010, the American Society of Civil Engineers (ASCE) Infrastructure Report Card gave Illinois an overall grade of D+.140 The state's infrastructure is in urgent need of immediate repairs to meet basic standards of public safety, and in need of expansion and modernization to accommodate future growth. However, as Illinois continues to struggle to pay its pension, Medicaid, and debt obligations, the state's infrastructure condition will only worsen. Illinois state agencies estimate that infrastructure needs over the next twenty to thirty years will exceed $300 billion. But the state does not have a comprehensive capital improvement plan, and the information needed to make an accurate assessment of the condition of Illinois' infrastructure is incomplete.

Condition of Illinois' Infrastructure

The poor condition of Illinois' infrastructure — including highways, roads, bridges, trains, buses, dams, locks, and buildings — has become critical.

A FY 2011 survey of Illinois' highways and roads by the Illinois Department of Transportation indicated that approximately half of Illinois' highways and roads were in Fair or Poor condition. According to the Federal Highway Administration, in 2010 over 15 percent of Illinois' 26,000 bridges were structurally deficient or functionally obsolete.

Illinois' mass transit infrastructure is also lacking: in 2010 approximately one-third of mass transit bridges and structures; maintenance facilities; and buses were not in a state of good repair. Nearly two-thirds of Metra and CTA passenger rail cars were in a "marginal" state. Nearly half of Metra and CTA train stations were past their useful life, and about one-third of CTA and Pace buses were in the last quarter (or less) of their useful life. Little state funding is available to address these needs.

Local Government Fiscal Stress

Local government taxing jurisdictions weave a complex web in Illinois. According to the 2007 Census of Governments, Illinois has more units of government than any other state — nearly 7,000. This includes 102 counties, 1,400 townships, 1,300 municipalities, 868 school districts, and about 4,000 special taxing districts such as library, fire protection, forest preserve, and park districts.

In Illinois, the fiscal condition of thousands of local governments is intertwined with that of the state. At present, neither is in a position to help the other. The state's fiscal stresses have led to cutbacks in transfers of state revenues to local governments, exactly at the time that local governments are most in need of assistance.

Everything above, starting with "What Would It Take Calculations" were pieces snipped from the 69-page PDF.

Illinois is in deep "sheet" and the primary proposals under discussion all involve tax hikes and more pandering to public unions which will do nothing but drive businesses away.

My six-point alternate proposal would put Illinois back on a track towards fiscal sanity and also encourage businesses to relocate to Illinois.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

"Wine Country" Economic Conference Hosted By Mish
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8 Ways to Delight the Pants Off Your Community - Whiteboard Friday

Posted: 25 Oct 2012 06:03 PM PDT

Posted by jennita

Ahh yes, Community. One of the most important areas of SEOmoz. We've come to realize that growing and nurturing our community isn't just great for business, but it's great for our members and for the greater marketing community. Think of it this way: the more you can get a community member to participate, the more they learn and share their knowledge, the richer the whole community becomes. I could go on for days about the importance of Community, but perhaps another time :).

Keeping your community happy (or at least showing them you care) is one of those aspects that is uber important, but doesn't get discussed nearly enough. Today, I'll be talking about just that! I'm excited to share some tips on ways to make your community *happy dance* their way into becoming lifelong fans. So sit back, relax, and learn how to delight and surprise your community - one cupcake at a time!

Video Transcription

"Hey, SEOmoz fans. I'm Jen Lopez. I'm the Director of Community here at SEOmoz. So of course today I'm going to talk about eight different ways that you can delight the pants right off of your community members, and by pants I mean not pants, but anyway, we'll get into that a little bit more.

So, the first thing, something that we do here at SEOmoz is we give them points. Now, that could be brownie points. It could be actual money. It could be whatever you want to give them, stars, but something that lets them know that the activity that they're doing, the stuff that they're doing that they're doing a good job, and where people can actually tell them "You're doing great," whether it's like on Instagram, you can "heart" something. I actually always love that. I like it better than a Like because a heart has a little more power than a Like, and on Instagram, when I post something and I get a ton of people hearting my stuff, I get really excited. My pants don't come off, but I do get very excited.

Number two, you have to be sure to actually thank them. So, if somebody does something really nice, you should thank them. You're going to notice that all these really boil down to the last point, but I'm not quite there yet, so I'm not going to go there. But thanking them, taking that step, whether it is on the site in a comment, whether it's via Twitter, it's on Facebook, it's in an app, it's in a forum, whatever the case may be, if you thank someone, thank them for giving you feedback, thank them for their comment, whatever the case may be, the little, tiny step of saying thank you actually makes a huge difference to somebody. I know that, for me personally, I've been absolutely delighted in other communities when I've been participating and someone has said, "Thank you so much for your help with this, we really appreciate it." It absolutely makes a world of a difference.

The third one is be human. This is in your messaging across the site. If your site is down or you're having issues, rather than just saying, "Oh, hello, I am a bot and my site is down, and you must come back later," if you had a little bit of personality and actually show that you give a crap about your community and the people who are using your site, they're really going to appreciate that. If you say, "I'm really sorry, we're having issues right now, we'll be back as soon as possible, check us out on Twitter," whatever the case may be, we all know the fail whale. That's because Twitter, although we hate to see the fail whale, we all know about it and we actually kind of like it. Twitter has even spruced it up over the years, and it shows that they're human, that they care, that they found a design, and people really latched on to it. There are T-shirts out there with the fail whale on it and all of this.

So, actually be human. In everything that you do, make it known that there's a human behind it. If you're running your Twitter account, you're running your Facebook account, don't make it be like, "Well, we're a big organization and you're talking to a big bean." You're talking to a human and make sure that they know that.

The next one is show some personality. For us, it's sort of fun when we are engaging with the community on Twitter or Facebook, we get to be Roger. We get to be a robot. It's a lot more fun to be like, "beep, I love candy apples," or whatever the case may be that Roger seems to like that day. It's easy for us to put some personality into it. But that's another thing. It goes with "your site's down." We actually recently had somebody write a blog post about how much he enjoyed our "site down" message, and then he tweeted to us and we sent him back a response with a picture of Roger and he really enjoyed it. He wrote a blog post about it, which he then linked to us. So just by showing some personality and being human and doing all these things, we actually got a link out of it, not specifically on purpose, but because we're building this community and we actually care and we're working hard to do that.

The other thing is you have to make it easy. Nothing frustrates a user more than getting to a website and not being able to do what you want to do, whether it is to simply leave a comment, whether it is to sign up for a paid account, whatever it is, even if it's Twitter or if it's Facebook, make sure it's easy for the end user.

I like to really talk about Lady Gaga's community. This sounds really silly, but if you go to LittleMonsters.com and walk through the sign-up process, you will see what an excellent community is and how easy it is to sign up. They walk you through step by step, telling you everything that you're doing along the way. They pull in your information from Facebook or Twitter, wherever you want it to come from. You can change it. Then, as soon as you're in, they walk you through how to use the community. I'm actually quite a fan of Lady Gaga, and I don't participate in the forums or anything. But we have actually used their sign-in process and on boarding process quite a bit here at SEOmoz when we've been working to build our community even more.

So make it something that, whether it is sharing content, whatever it is, if you want somebody to write a YouMoz post, we don't make that super easy. That's one of the things that we actually need to work on. But make it really, really easy for your community to do things, and they will be happy as pie. Although hopefully, they'll still have their pants.

The next one is take it to e-mail. I've had this personally happen to me several times, and from that I have then starting using that within our own community. One time I was in New York City, and I had paid for the WiFi and it was about 11 o'clock at night and I tweeted from my phone because I couldn't get on WiFi. I tweeted about the WiFi problem at this hotel. Well, the next afternoon, I received an e-mail from somebody saying, "We saw your tweet. We've actually gone to your room. We fixed the problem. Your WiFi issue has now been solved and you don't have to pay for WiFi the rest of your three night stay."

My pants almost fell off, because I was so excited about that, and I've actually talked about it in almost every one of my presentations since, because I was absolutely floored that they went above and beyond. I sent a tweet. They read my tweet, and they found out who I was. Okay, it's maybe a little stalkerish, but I'm okay with it cause I signed up with my e-mail address. Anyway they were able to find me and help me out.

More recently Sprout Social, we've been testing them out. We're testing out various social management software. We're trying out Sprout Social, and I got a tweet from someone who works there that says, "Oh, we really love you guys. I'm glad you're trying it out." The next thing I know, we get a bunch of cupcakes in the mail. That has nothing to do with the e-mail. That was actually number seven, that rolls right into that one. I am so ahead of myself here.

Number seven is take it offline, and some of that goes with the e-mail, if you can reach out to the person. Sometimes we'll have someone in the comments who's having issues or wants to ask more questions or whatever. We reach out to them and say, "Hey, I'm here. I'm a human. I'm here to answer your questions and figure out how we can help." So, whether you're doing that in e-mail, on the site or on Twitter, whatever the case may be.

Then the next step is to really take it offline, like I said. Send them something nice. So we received cupcakes, which if you follow me on Twitter or you've ever seen me speak like at MozCon or something, you probably know that I really like cupcakes. I actually think it might be in my Twitter bio. So all they had to do was look at my Twitter bio that said, "I love cupcakes," and they sent me cupcakes.

Now, are we going to use Sprout Social? I'm not 100% sure, but I guarantee that every time we talk about it, I'm like, well let's not forget about Sprout Social because they remembered I liked cupcakes. So take that when you're trying to woo a community member.

The last thing, and it's something I've actually talked about through the whole thing, is just to make it personal. They're a human on their end. If you make it personal for you, that you care about what they're saying, you care about what they're asking about, again we're talking whether it's on social, whether it's within your app, it's on a forum, it's on your blog, whatever the case may be, just remember that they are human and you are human and they're having a bad day. I can do a whole Whiteboard Friday someday on how to deal with trolls, and one of the biggest things will always be to remember that they are human also. They may not act like it, but when it comes down to it, if you treat them like a human being, they're going to respect that a whole lot more.

So that is today's Whiteboard Friday, and I believe I went through everything, and hopefully you still have your pants on. I'm hoping. Everybody got your pants? Checking? Okay.

Everybody have a really great week, and we'll see you next week for another edition of Whiteboard Friday. Thank you."

Video transcription by Speechpad.com

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West Wing Week: 10/26/12 or "The Difference One Person Can Make"

Your Daily Snapshot for
Friday, October 26, 2012

West Wing Week: 10/26/12 or "The Difference One Person Can Make"

Welcome to the West Wing Week, your guide to everything that's happening at 1600 Pennsylvania Ave. This week, the President urged Congress to join him in helping responsible homeowners refinance, Cecilia Muñoz reflected on the importance of the Cesar Chavez National Monument, and the Vice President and Dr. Biden honored Breast Cancer Awareness Month. Meanwhile, the White House wrapped up its fall garden tours and held a Garden Social for our online followers.

Check out this edition of West Wing Week.

Seth's Blog : A bias for trust

A bias for trust

Two very simple truths:

a. Don't waste your time initiating relationships that aren't going to thrive and benefit both sides.

b. Productive connection requires mutual trust. You can't empathize with someone you don't trust.

If you enter an engagement filled with wariness, alert for the scam, the inauthentic and the selfish, you'll poison the relationship before it even starts. Those you deal with won't be challenged to rise to your expectations of excitement and goodwill. Instead, they'll struggle in the face of your skepticism.

Instead of seeking and amplifying the sharp edges, consider focusing on the dignity and goodwill of the people you're working with.

Sure, there are people out there who will disappoint you. But expecting to be ripped off poisons all your interactions instead of saving you from a few dead ends.

An open mind and an open heart usually lead to precisely that in those that you are about to deal with. Perhaps we should give people a chance to live up to our trust instead of looking for the gotcha.