Little Drinks with Umbrellas

I've never done this. I am going to do this now. Luckily the stock market is behaving to some degree and we have a resonable chance on a double-secret-doubledare witching Friday.

You all have a marvelous weekend. If it is your religious observance time, be well, love your family and think the thoughts that fruit and honey convey.  If this weekend isn't marked by religious observations then be well and love your family.

With that in mind, adieu. bonne journee. bon voyage, bonne fete.   The little drinks with umbrellas await.

The sadness of a job fair

I was at one yesterday looking for potential traders or traders with potential or generally smart people who could fit in.  In my lifetime I don't think I've seen more of a buyer's market.  What was so sad was outside the arena.  There were countless people in black business suits and white shirts and blouses.  I thought that was most telling.  Here were a group of prospects, all cleaned up and in their Sunday go to Meeting clothes (look that one up),  practicing expressions in the windows before they went in, standing up very straight and all a complete bundle of nerves.

There was one group of girls/women/females (you pick) practicing their "opening lines" with each other.  I approaced just ot of curiousity and as I had my "employer/exhibiter" badge on they snapped to.  Ahh the power of a job. In any other setting I would have had shoes thrown at me.   I invited them to visit our booth as indeed we were looking for people.  I also asked what they thought their chances of landing something through a fair and their "upbeat hire me" expressions flattened out.  At best they hoped someone would call them for an interview but they knew they would be up against a new set of jewels to be sifted through.

It was very sad actually. $150,000 in some of the best education in the world.  Very well developed verbal skills. A catch for any company in normal times.  I hope we don't waste any of them.

A layman looks at that thing called the consumer price index and laughs

Oh this is a hoot.  I'm just an average joe with no real expertise whatsoever in finance. While riding to work the CPI was releasd and met with great glee. Our prices only went up 0.1% in August. A measly 1/10th of a percent..a friggen rounding error.  And of course the shoe dropping "excluding food and energy.

Now I've heard this disclaimer before but today I'm curious to the point of going to the bureau of labor statistics and visiting their frequently asked questions pull down.

My first question is why can't anyone write a clear sentence. Buellar? Buellar? Anyone?

So playing along here I did the FAQ thing and "asked":

Has the BLS removed food or energy prices in its official measure of inflation?


No. The BLS publishes thousands of CPI indexes each month, including the headline All Items CPI for All Urban Consumers (CPI-U) and the CPI-U for All Items Less Food and Energy. The latter series, widely referred to as the "core" CPI, is closely watched by many economic analysts and policymakers under the belief that food and energy prices are volatile and are subject to price shocks that cannot be damped through monetary policy. However, all consumer goods and services, including food and energy, are represented in the headline CPI.


Most importantly, none of the prominent legislated uses of the CPI excludes food and energy. Social security and federal retirement benefits are updated each year for inflation by the All Items CPI for Urban Wage Earners and Clerical Workers (CPI-W). Individual income tax parameters and Treasury Inflation-Protected Securities (TIPS) returns are based on the All Items CPI-U.

Wait wait there's more.  This part is really choice and I am just going to copy and paste it without further comment.  Just note a couple key phrases:  "level of satisfaction" and "hamburger and steak are in different CPI item categories, so no substitution between them is built into the CPI-U or CPI-W"....!!

When the cost of food rises, does the CPI assume that consumers switch to less desired foods, such as substituting hamburger for steak?


No. In January 1999, the BLS began using a geometric mean formula in the CPI that reflects the fact that consumers shift their purchases toward products that have fallen in relative price. Some critics charge that by reflecting consumer substitution the BLS is subtracting from the CPI a certain amount of inflation that consumers can "live with" by reducing their standard of living. This is incorrect: the CPI's objective is to calculate the change in the amount consumers need to spend to maintain a constant level of satisfaction.


Specifically, in constructing the "headline" CPI-U and CPI-W, the BLS is not assuming that consumers substitute hamburgers for steak. Substitution is only assumed to occur within basic CPI index categories, such as among types of ground beef in Chicago. Hamburger and steak are in different CPI item categories, so no substitution between them is built into the CPI-U or CPI-W.


Furthermore, the CPI doesn't implicitly assume that consumers always substitute toward the less desirable good. Within the beef steaks item category, for example, the assumption is that consumers on average would move up from flank steak to filet mignon if the price of flank steak rose by a greater amount (or fell by less) than filet mignon prices. If both types of beef steak rose in price by the same amount, the geometric mean would assume no substitution.

In using the geometric mean the BLS is following a recognized best practice for statistical agencies. The formula is widely used by statistical agencies around the world and is recommended by, for example, the International Monetary Fund and the Statistical Office of the European Communities.


There it is and there a lot more (sadly).

Here come da' judge

Yahoo isn't an instant news source and I heard this ruling over the news speakers here a while before it appeared online.

This is precisely what I mean about the disconnect between Main and Wall Streets. No matter how you cut up $5.8 billion, that is a lot of bonus.  let's take a factory worker or anyone who actually makes something.  He is lost in that math. What does he figure? A million workers getting $6,000 each year end? Well ML never had a million workers so the figure on average is north of that and this fact isn't lost on the workers making flanges. His company (the flange guy) is probably loosing money hand over fist.  Then he reads that ML lost $28 Billion.

It's not the idea of paying too much or a smidgen.  It is the idea that someone can pay out a ton of money - a very princely sum - while the company is bleeding money out its eyes that rankles our flange maker.  He really doesn't care if these ML guys work almost all on commission. You can hold that fact to light forever and he won't even blink.

Why do companies that are burning money...just burning it up...don't put a little aside and hire a good PR firm to have them explain to the real world that this is the cost of labor.  ...  not that anyone will stand around and listen.

New York Times this morning and the Presidents Speech on Wall Street

I'm a bit torn about all this.  Now that I'm in the company of people who live and breathe on all things dealing with economy and Wall Street I'm beginning to "get it" as to their POV and if i listen with an open, non-liberal socialist mind, they make a huge amount of sense.  I might not adopt their views but I respect their mindset and their reality. 

A while back I watched the infamous Cramer on TV and in that interview, although professing a social responsibility, he noted that his advice was to make people money in any situation and that he clearly and easily looked past a lot of things to focus on that central goal. Business is business and making money is making money.

As to me being torn, I've watched the CNBC "Greed" series and I note in the NYT's piece cited above that more regulation is on the plate for lunch.  I note three things, not based on anything professionally based, but simply from the materials, views and writings of others:

1.  We are not out of the woods as there seem to be several shoes ready to drop if things start to go sour  e.g. mutual funds are soon to be no longer protected, commercial real estate is in the pits perhaps, and the continuing banking problems with too big to fail and little banks taking on more water than they can bail.

2.  The great boom years of 2004-6 were fueled by the conversion of home equity to ready cash.  Talk about borrowing against the future!  It wasn't the economy as much as it was low interest and a bazillion re-fi's and then of course the packaging of all that mortgage debt into AAA's. That source is gone for now and perhaps forever and some people who ran that trade should be horsewhipped.

3. The ordinary Joe who lives paycheck to paycheck and has a life that is highly regulated just doesn't schmooze up the idea that the bank bailouts and renewed regulation aren't linked.  I take that position.

The banks seem to want to give back the money why? so they don't get regulated and can do their business out of the eyes of the government - i.e. business as it was before.  That's the normal guy's take on all this and frankly it stinks.  I think they have given up their high-ground in this matter and there should be a federal regulator sitting on the CEO's lap for a while.

This is of course my opinion and not the company's da da da.  I have a year around home in the Hamptons were a lot of these guys show up for the weekend (thankfully not so much lately).  Most or good normal people who have a grasp of humanity. Then there are some who are among the most awfully pompous p...ks you have ever met in your life. You can see it in the stores and supermarkets.  Locals want to do them in and can't wait for them to leave.

Albeit this post is a gross generalization, there is a smattering of truth in it all.  There is a certain "be damned" attitude that seems to be a way of life for some people. Some of them are the bankers who helped dig us in this hole and were the first pigs to the trough of public money.  When these pigs found out that the free feed brought a feedmaster they didn't like it as much. When they went to the point of wanting it for wanting it for free and just want the trough and not the feedmaster doling it out, that's what drives me and a lot of us crazy.

More jargon in advertising and the Upfront

Every so often the CNBC interviews bring on someone from either the media buying/planning side of the business or a network/cable network executive telling about how things are.  With the botched soup of this year's upfront buying (see I'm using jargon) and the clear signals that the recession might be over but no one can afford expensive beer as of yet, television advertising can tell a lot of tales and it might be important to understand what is being said.  The link above will take you to a basic glossary of advertising terms so when the talking heads us mumbo-jumbo, you have an idea of what they are trying to say.

The Upfront buying season occurs late spring.  Upfront means buying "up front"....that is prior to the fact.  The networks put on big deal dog and pony shows that preview the fall lineup.  Remember this might be May and the schedule they are selling is usually middle/late September - i.e. "the fall season".

As networks rebuild and rearrange schedules they do this so media buyers (I was one) get a preview, figure out their budgets and allocations and make a deal in advance.  In return, the networks run a rate card that is a discount and they generally guarantee the amount of rating points or impressions that will be delivered.  This year's Upfront fell 9-15% under what was expected and the goals were not so hot so revenue that is guaranteed is way down from years past. We won't see the real bad news until 4th quarter which will be reported 1st quarter so the "cows coming home" is a long time out but they are definitely coming.

The point here is that there was just someone on CNBC talking about advertising issues for the networks.  When CNBC has a guest in this area it usually is in advance of some news that is about to hit or in response to some buzz on the street.  Anyway, the link in the title takes you to a glossary and you might just want to stay tuned.

Eve of 9-11

I'm surprised that on the eve of the disaster there isn't much more made of it.  Realizing that it is 8 years ago it can be conceded that memories fade and many simply don't want to re-visit at length that horrible day. 

I was in NYC that morning, going to work and I had just arrived at the exactly ontime LIRR Hunterspoint station (8:38) and waiting in line to climb the stairs.  By the time I was approaching the #7 subway entrance the first plane had hit.  Those who know the stop are familiar with the unobstructed view of Manhattan and the smoke was evident.  From the distance it appeared to be just a big fire.  I went down to the subway and emerged at Grand Central, walked over to 5th Ave and upward to my office.  About halfway there everything stopped. Traffic stopped. Pedestrians stopped and turned to look south. The second plane had just hit and the non-curious curiosity of city folk fairly quickly moved to panic and concern.  I got to the office and all eyes were on the TV monitors that dotted the offices.

The rest of the day was a blurr. Phones were out or overloaded. Cell phones were useless. I got out an email to family saying I was fine and at work...not that I was in any danger but we officed accross from Rockerfeller Center and everyone felt that was a target.  My daughter was working at a magazine next to the Empire State Building and they all left work to get out of that area.

About 1p I ventured out to go to the blood bank which was lined up around the block. The first of the wall street workers who were evacuating the area were marching up Madison perhaps to apartments and I was struck by the dust. Those close to the area were easy to spot as they were covered in ash and dust..white concrete dust.

When the railroads opened up late in the day the trains were jammed as car traffic wasn't possible exiting the city. Again the concrete dust. Everyone wanted to ask them questions but there wasn't much talk and the dazed looks somewhat forbid inquiries.

Although not close and in no danger the entire episode is burned in my memory. I hope that it is still in everyone else's.