The old saw that highly intelligent people lack common sense is usually uttered by unintelligent people in an attempt to feel better about themselves. Being absent-minded or unmindful of mundane details is not the same as lacking common sense. Besides, I defy anyone to actually define “common” sense.
That’s my story and I’m sticking to it.
August 1st marked the fifth anniversary (!) of my receiving my first pension payment from major league baseball. This month’s payment was received today; although the payment is supposed to be received on the 1st of each month, it is actually received on the first business day.
I have probably written elsewhere on this blog about my months of ruminating on when I should start receiving the pension. I performed all sorts of calculations using fixed and variable discount rate models in an effort to find the age that would maximize the present value of those payments. It should come as no surprise that the pension payout is structured in such a way that no real change exists in the present value at age 55–the first age when a person with 10+ years of service can begin receiving the pension–whether one begins receiving it at 55, 60, 65 or any age in between. (The earlier one begins receiving the pension, the smaller the nominal amount. Of course, a dollar received today is worth more than a dollar received five years from now. The amount increases literally every month one waits to receive it, like Social Security. Unlike Social Security, however, the pension is not adjusted for inflation. Also unlike Social Security, where waiting until 70 maximizes the nominal monthly amount received, the max for the baseball pension is age 65.)
I decided to begin receiving the pension on August 1st of the first year I was eligible because 1) that most closely mirrored my last day as a full-time employee of a major league team and 2) that would almost maximize the number of payments I received until they put me in the ground. The baseball pension is an “old-fashioned” defined benefit plan, of which very few exist these days. I did not put one penny into the pension fund; my benefit is a function of how many years I worked and how much I earned.
How much do I receive every month? That’s no one’s business except for my wonderful wife and my accountant.
On this day in 2007 DaimlerChrysler completed a deal to sell an 80% stake in its ailing US Chrysler division to the private equity company Cerberus Capital Management for 7.4 billion euros, or $10.1 billion. Because debt/credit markets were already beginning to suffer at the beginning of the “Financial Meltdown/Great Recession,” DaimlerChrysler and Cerberus had to help with the financing. This was the first time a private equity company took majority ownership of a US car company.
Daimler-Benz AG had acquired Chrysler in 1998 in an alleged “merger of equals.” However, the merger terms clearly favored Daimler and within a year many people at Chrysler said it was being “Germanized” into a mere division of Daimler-Benz. Jurgen Schrempp, Chairman of Daimler-Benz, later conceded that was part of the “merger” plan.
Of course, less than two years after being sold to Cerberus Chrysler filed for Chapter 11 bankruptcy protection, which set in motion the events that led it to be purchased by Fiat, the company that currently owns Chrysler. Maybe the echoes of the Great Recession still haunt American car makers today and that partly explains why, in general, they seem very risk-averse in terms of product offerings. The fact that 70% of American adults are overweight and a third are obese also is a factor in the glut of SUVs and pickup trucks. The companies are all too happy to oblige since profit margins on those vehicles are higher than on “regular” cars.
From Classic Cars a picture of one of my favorite Chrysler/Mopar products, the Chrysler 300B:
The “B” designation means the car is a 1956 model. The optional engine for this car was the first American motor to offer at least 1 HP per cubic inch, generating 355 HP from 354 cubic inches. The engine also produced 405 LB-FT of torque.
Who knows what long lasting effects “the virus” will have on the US and world automobile industries? Must I write it again? History is replete with examples of the folly of human beings trying to predict the future.
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