The stock market spiral. It may not be what you are being told

Stock market downturn august 2011

The broadcast media loves a good, tight narrative. Here is the narrative for the stock market downturn for the recent events happening on Wall Street.

Congress squabbles over debt ceiling, Tea Party was obstinate about debt and deficit, we came close to default, S&P drops rating, stock market reacts. Package that up with some pundits, repeat over and over and it becomes fact. Next story.

Only part of this is true.

Here is what I think is happening with the stock market. It is about as simple as the narrative, but admits that human behavior is behind all the numbers so that is always scary territory for economists. But we’ll give it a go anyway.

In 2008, the economy came to a grinding halt. Millions of people lost their jobs, many were on their way to losing their homes and since poor people don’t spend money, millions of businesses quit stocking inventories.

Corporations shed jobs and cut expenses and immediately became more productive and profitable just in the way we measure these things. When the economy started growing slowly, they did not re-hire people; they replaced them with technology that shows up every day, do not need a medical plan and will never saddle the corporation with a pension plan. Investors like that so they buy more of that company’s stock. And they bought a lot in the past two years, pushing stock prices higher. Investors were getting richer.

But you can not cut your way to long-term profitability. The life span of a “cost-cutting to profitability” plan is about 18-24 months. After that, if you are not growing revenues, your profitability will start to decline. Business knows that but they also know that the average “dip” between recessions is about 18-24 months. After that, people get tired of austerity, they start spending, jobs get created and the economy kick-starts itself into gear.

Investors also know this, but they never know exactly when they should be selling the stock. But the smart ones know they will sell the stock eventually because companies will start hiring based on product/service demand and their stocks will take a hit before going back up. Investors hate when companies hire; it means lower short-term profitability and long-term obligations. They like to sell before that “hit” happens.

The underlying reason businesses are not hiring is because they have no need to hire. There are few customers on the horizon. Regardless of what the GOP spins about tax cuts and regulations, the number one — and only reason — businesses are not hiring is because they do not see any customers. Period.

Taxes and regulations are things to either comply with or figure out how to get around when you really, really want to get to the dollars on the other side. To date, I have not met a businessperson who does not believe that in his/her heart. Have you?

We are at about the 24 month mark when the economy should be swinging upward. Only it isn’t and the only organization with the will and means to spend money to get things kick-started — the US Federal Government — is now in a Tea Party-forced cost-cutting frenzy. Even if the President were to introduce a jobs bill, he could never get it funded. What the market heard during the debt ceiling debate and Mitch McConnell’s comments afterwards is the government is going to keep cutting way past the 18-24 month window. Way, way, way past.

“Holy crap!” think investors who are looking at history and know they are at or near the end of the “cost-cutting to profitability” plan of most corporations. “I’m not going to lose my butt in the private sector. I’m going to buy the most secure stuff that exists; US Treasuries.”

Standard & Poor’s did the only thing they knew how to do; lowered the rating for the US Government. Not entirely the best strategy, but they could do little else. S&P also gave a narrative as to why they did something, anything. But neither side heard the rationale. I’m not a fan of S&P as they have been wrong more often than right, but this time, I think they got it right, even if their math was off.

The problem does not lie in the math; it lies in the human assumptions behind the math.

And that is exactly what is going on, regardless of what rating Standard & Poor’s gives the US Government.

Now, all we need to do is package that in a nine-second sound byte.

*Sigh*

My extra second in 2008

Just one more second
Just one more second
I heard on NPR today that 2009 will have to wait an extra second to coordinate clocks with the Earth’s rotation.

Rarely do we get handed the gift of time, so I got to thinking about what I would do with an extra second of time. A second isn’t really enough time to do anything significant, but it sometimes makes the difference for some people whether or not they step in front of a bus or not at a particular moment. A second is also a lifetime in most Olympic sports, sometimes determining the difference between first place, a gold medal and fourth place and nothing.

But, my mind raced to more practical calculations and I pondered this:

If I can type 60 words a minute, that means I can type out an extra word in one second. And, if there are 6 billion people on the planet at any given point, and if only 30% were literate enough to be able to type one word, that is 1,800,000,000 extra words.

Now, the result may be closer to a million monkeys on a million typewriters, but you never know. Would 1.8 billion words impart some human knowledge or wisdom we would never have know if we didn’t have that extra second?

But then again, it is just an extra second. What could you possibly do in one second?

Not entirely an accurate analogy on Net neutrality

Found this analogy about Net neutrality and depite its convincing face, it is not entirely accurate.

Say there was no deal cooked up between Telus and the big pizza chain and everyone was competing equally. But, the local pizza place decided it would make a really delicious, super-duper pizza that everyone wanted, but was not going to pay Telus for extra capacity for phone calls to come in to the shop. They had one line and people could reach them, they claimed.

Moreover, the local pizza chain demanded that Telus install additional lines at no cost to them so they could deliver their extra super delicious pizza that everyone was clambering for. “Pizza should be available to all who want it!” was the battle cry of the pizzeria and their customers.

Yet neither the pizzaria nor their customers were willing to pay extra for the additional phone lines to be installed. “Telus should provide those for free! They MUST be anti-pizza!” came the sequel to the battle-cry.

I am not anti Net neutrality. In fact, a lot of my tax money went to establishing the Internet and without that seed money, the Net would not exist. Nor am I pro Net neutrality. I fight all the time to establish value for web sites we develop that people think should be a free service.

I don’t know the answer, but I know analogies like the one published is not a complete picture of the issue.

Originally published on: GerardMclean.com

Joe Biden get a German Shepherd

Stolen from www.msnbc.com
Stolen from www.msnbc.com
Vice President-elect Joe Biden has picked out a 3-month-old male German shepherd from a suburban Philadelphia kennel to bring with him to Washington.

Biden, riding deep with seven black Secret Service vehicles, rolled up to German Shepherd breeder Linda Brown’s home in Chester County, Penn. on Saturday and rolled out having chosen the nation’s Second Dog. From the Shepherd side of this family, we think that is a pretty good choice. Brave, but good.

Read the whole story at MSNBC.com

How to look clueless on Twitter in three easy steps

Recently, one of the folks I follow sent out a tweet about a teacher who is selling sponsorship on the bottom of his test. The tweet went like:

I am in advertising, but even I think this is a bad idea.

So, being a good follower, I click on the link to the story, read it and replied back something like:

Wow, I want to advertise. Do you know how to get in touch with Tom Farber?

A day goes by and the reply comes back from my follower:

Who is Tom F?

I replied he was the teacher in the story he tweeted out. He replied back:

Not sure, use Google!

Oh, ok. I was a bit taken aback, but maybe he was very busy, a day job, thousands of followers and didn’t really have time to engage me. Nope. He is following 32 people.

So, here is my take on Mr. Follower.
He really didn’t read or engage in the article, but he thought he should tweet something out that made him look like he was connected with the advertising/marketing world. When he was given an opportunity to engage with someone who took the time to reply to a tweet, he blew it entirely by saying, “I don’t have time for you, look it up yourself.”

I clicked through to Mr. Follower’s profile and then to his web site, which turned out to be a resume. His last job ended in September 2008, so it looks like he is searching for a new job. Do I have a marketing position for him with my company? Maybe I do, but I would never hire him.

Am I being too hard on Mr. Follower? Perhaps. Perhaps I should do my own research on articles that interest me. Or, perhaps Mr. Follower just failed the first test of a prospective employer looking for a Web 2.0 savvy person to lead a multi-million dollar division.

Oh, yeah, the three steps thing… umm, ok:
1. Make sure you don’t actually read or engage in web sites you tweet out
2. Treat every question like it is an imposition on your time
3. Don’t bother helping anyone. That is what Google is for.

Disappearing males?

This is an interesting video and it appears as if males are disappearing. The video concludes that that is is becasue of the chemicals we’re producing, but as a male of the canine species, I’d like to posit another theory:

Mommybloggers

Ok, not specifically mommybloggers, but everything they represent. The mommies have all bonded into this huge economic and marketing force that has diverted much of the scientific research dollars on disease and such to things like breasts cancer and away from colon cancer, protate cancer and various other things men die from.

Almost two full generations of men have been emasculated by this “mommyblogging” force into believing men are not really valuable unless they get in touch with their feminine side. Limiting sperm count in college-aged, sex-crazed boys has got to be a good thing, right? Men who have kids should celebrate the fact that they got a girl, and another and another.. even though they really wanted a boy. But, they will never say that for fear of losing the single testicle mommybloggers allow them to keep.

Women really no longer need that many men in society because they can store sperm for generations to use when they are ready. In fact, we can cut down men to half their current population and really not affect our viability as a species.

But, I’m just one puppy and my view of this issue may be colored just a little by my “procedure” that left me a little less manly.

Posted by email from rufus’s posterous

Merry season!

Joe does not really care what you call the upcoming season of giving stuff to other people, but he wants you to know that you will NOT be getting a catalog in the mail. This is your only source for Plain Joe Stuff. (Be sure to catch the out takes at the end.)

Visit PlainJoe.com for all your Merry ———– gifts.

Posted by email from rufus’s posterous

Truemors was being goofy.

So here are my comments to 

Palin Calls Bloggers “Kids in Pajamas…in Their Parents’ Home”

Here is the quote from the Fox News site:

–QUOTE–

VAN SUSTEREN: Is there anything else that has been raised or said about you in the media, either during the convention — I mean, during the campaign or since the campaign ended, that you think you need to address that has been, you know, an allegation about you?

 

PALIN: Well, unfortunately, early on, there are a tremendous number of examples that we can give regarding my record and things that could have, should have been so easily corrected if — if the media would have taken one step further and — and investigated a little bit, not just gone on some blogger probably sitting there in their parents’ basement, wearing their pajamas, blogging some kind of gossip or — or a lie regarding, for instance, the — the discussion about who was Trig’s real mom? You know, Was it one of her daughters or was she faking her pregnancy?

–UNQUOTE–

Yes, it is true that she does not say ALL bloggers blog in pajamas in their parents home, but she is stereotyping bloggers much like, oh, I dunno.. like what a GOP group did for Obama on what African-Americans eat, for example… 

http://www.dogwalkblog.com/2008/10/18/the-price-of-stupid-and-ignorance/  even though it may be true of SOME African-Americans… Couple that with the tone in her voice (check out YouTube) and her reference really is unmistakable.

Sarah Palin is just not that bright. My God, the sentence structure and subject-predicate agreement alone is horrifying! Lawyers would be endlessly employed trying to figure out which “is” meant “is” or “was” or what “is” really is. 

She is GREAT for energizing the DNC base to vote against her and non-stop entertainment for humans and canine alike, but presidential? Hmmm… no.

Posted by email from rufus’s posterous

Never confuse ‘clear thought’ with crap

Last Saturday, Mark Lilla, a professor of humanities at Columbia University, wrote an article in the WSJ titled The Perils of ‘Populist Chic’, What the rise of Sarah Palin and populism means for the conservative intellectual tradition. It was well-thought out and objectively argued. In short, it explains why presidential candidates need to go bowling and drinking beer, why smart girls get teased in math class and why nobody like a know-it-all. Kinda.

Anyway, I tell you this so that you are intriqued enough to read the article and draw your own conclusions, but also to introduce Mr. Peter Noel Murray, Ph.D who wrote a letter to the editor, saying, among other things:

Prof. Lilla proves that highly educated minds can be small and prejudiced when he describes Gov. Sarah Palin as “ignorant” and “provincial.” What this Columbia professor really means is that she isn’t Ivy League educated and isn’t from New York City.

Well, I’m just a mutt that grew up in the Frogtown area of St. Paul and graduated with a BA in English from the public university, the University of Minnesota and even I think Sarah Palin is ignorant and provincial. Moreover, I think she is rather stupid in that she does not show a capacity to learn as evidenced by her more recent interviews (still reading the keywords off the notecards!) Furthermore, she exhibits distain for others around her and appears incapable of empathy. 

But mostly, she is stupid. No, really she is.

The president should be really smart, almost geeky smart. The fact that we have a smart president-elect who is also a great orator and empath is a giant plus. Let’s stop “mocking him” through sneers, jokes and sarcastic asides. After all, he did what Sarah Palin and John McCain could not.

Posted by email from rufus’s posterous