The Flywheel

Program for February 29th

What makes generations X and Y tick?

Bill Wittich

Bill Wittich, Elk Grove Rotarian and regular on the Rotary speaking circuit talks about “Generational Diversity” and what makes younger Americans different from Boomers and Warriors and even older generations of Americans (besides age?).


MEETING OF February 22nd, 2008

Welcome, Invocation, Thought for the Day

Prez Pam rang the bell and Richmond Rotary whirred through its usual opening with the pledge lead, Stony’s Invocation and Henry’s Korner, Henry Kelman stating the obvious, that Prez Pam “Is looking good!”  This caused a slight amount of confusion at the Head Table, trying to understand what Henry ‘really meant’ so your Editor recommends more regular and consistent compliments to Prez Pam so she will have more practice accepting them at face value.

Guest Rotarians & Guests In General

It’s about this part of the meeting where your Editor remembers he has to take notes.  But that wasn’t quite fast enough to get the name of our visitor from the San Ramon Club or Prez Pam’s guest.  However, Jim Young did remember his own guest Jonathan Van Selow, who is part of the Mt. Diablo Bank lending team.

Sunshine Report

It was literally a rainy day, without a Bill K. but with Elof Granberg present and no other untoward news.


  • Glenn Daggs announce that he is still taking signups for the Read Across America Program at Peres on March 3rd in the afternoon.
  • Jim Young passed along a message for an absent Mark Howe that the work part at the Rotary Centennial Project is postponed because of rain but will happen next Saturday March 1st at 401 First St. (9:00 AM?).
  • Prez Pam reminded the members of the District Conference April 24-26 at the Radisson Hotel in Sacramento.  And that we, she actually will be hosting the Ambassador of Madagascar. It’s OK to offer to help Prez Pam with this responsibility.
  • Secretary Jon encouraged members to turn in their make-ups form other clubs and be sure to attend club social and work events which Richmond Rotary counts as make-ups.  Someone shouted out that Jon looks like he ‘s lost weight, and Jon blushed knowingly because it is true.


Jim ‘The Beav’ Beaver recognized Dandy Don Lau’s 19th wedding anniversary.  Don was uncharacteristically quiet and mumbled something about marriage, Shelly and the Lau Luau almost killing him.  But he perked up making a $100 donation to the Rotary Foundation.

Happy and Sad Dollars

  • Jim  Beaver had Happy $$ for seeing our San Ramon Guest who’s name I still didn’t get.
  • Elof Granberg had Happy $$ for all the nice cards he got while in the hospital.
  • Hank Covell had Happy $$ for his dinner date with Doreen celebrating the 55th anniversary of their First Date! Whatta guy!
  • Don Hardison had Happy $$ as it is always good to see Elof at the meeting.
  • Jon Lawlis had Happy $$ for th successful Rotary Beer Tasting Dinner at the Hotel Mac and for Red Badge Rookie Lee Johnson’s commitment to club socializing because she doesn’t even drink beer.
  • Werner Schwarz had Happy $$ that Elof didn’t have a heart attack as previously reported and that his recent hospital visit was short.  At this point in the meeting a large gift basket that had come into Werner’s possession in an unexplained manner was auctioned off for the benefit of the club.  Variously called a Xmas Basket, a Holiday Basket and a Hanukkah Basket, the auction went to George Egan for $60.  Thank you George and Werner.


More than a "credit crunch"


Jim Young introduced Michael Pelham, who is the departing Treasurer of Greater Bay Bancorp, as the sun slowly sets on Greater Bay Bank.  Mike is filing in for Ryan Johanson who had an unfortunate motorcycle accident and whom we wish well.

Michael’s presentation is a follow on to Ryan’s previous presentation about hedge funds and their impact on the changing structure of global capital markets.  Young introduced Mike as s talking about the “Credit Crunch” which is something that has never happened before.  Mike began by apologizing for his probable use of jargon and acronyms in his presentation and encouraged interrupting questions for the sake of clarity.  He then said that Jim’s introduction was wrong, the “credit crunch” has happened before, just not in the United States.  Mike characterized the situation as a much larger, global version of the Japanese real estate bubble of the 1980s.  Mike reminded everyone that in the ‘80s the Japanese were buying up everything on the planet;  Japanese land values had increased ten fold the Nikki stock index went to 38,000 – then the bubble popped.  With the deflation in Japan, the Nikki dropped to a low of 7,000 and land values decreased constantly for 15 years straight, only beginning to recover last year.

Mike attributed the current situation to a global combination of fraud, complacency, incompetence and yes, greed, with the primary driver being the sub-prime mortgage “mess” in the USA.  Sub-prime mortgages , which he also called “liar loans”, are a product of deregulation of the American credit markets which after the Great Depression reforms, principally the Glass Steagall Act, made American credit markets the most stable on the globe and the envy of lesser economies.  Without regulations slowing the process and with new electronic technologies speeding it up, American financial markets replicated the mortgage bundling techniques of FanniMae and FreddiMac (which are the primary, quasi-public supporters of the long term American housing market), creating “private” unregulated mortgage backed securities that were then blessed “AAA” by the rating agencies like Standard & Poors after they had been insured by the mono-line insurance agencies that up until now had only insured municipal and other public debt.  Technology allowed these new mortgaged backed securities to be sold very rapidly into the global markets.  Venturing a personal guess, Mike thought the amount of capital at possible risk could be $1 Trillion, with a market restabalization duration at least as long as the run up, i.e. five years.  Mike reminded everyone that was just his guess.  When asked what people with cash should do, Mike repeated the oft said banker advice, “Stay liquid, and be in Federal paper or federally insured deposits”.

Mike provided one of the best, comprehensive over-views of a complex, fast moving subject your Editor has heard.  He gave lots of facts and statistics that are too numerous for the Flywheel, but which could be discussed at the Centennial Work Party next Saturday.  Thank you Michael Pelham for an outstanding program.

- Your Rotating Editor, Jim Young