Warning: Constant ABSPATH already defined in /home/public/wp-config.php on line 27
This And That — Why Now?
On-line Opinion Magazine…OK, it's a blog
Random header image... Refresh for more!

This And That

In addition to taking care of all the standard chores associated with cold snaps down here [lows in the 40s aren’t normal this time of year, and tonight and tomorrow will probably be records], watching Rick go nuts in the Pacific near Baja, and the fires down under in XXXX/Oz/Australia, I have been watching the fantasy world that constitutes media reporting on financial issues.

The big news this past week was the Dow going above 10K – big damn deal. The Dow Jones Industrial Average is an artifice supposedly based on the stock price of 30 widely held stocks. Only one of those 30 companies has been part of the Average since it was started, General Electric. The other 29 have been rotated at the whim of Dow Jones Inc., now part of Rupert Murdock Inc., and is now being shopped around so Rupert can get some cash flow.

When Alcoa and Intel, both current members of the “club”, reported seemingly good news, the number went up, and when BofA, also part of the clique, reported bad news, it went down. This says nothing about the actual health of the economy, only the stock prices of thirty companies. Most people who supposedly own stock, are actually invested through mutual funds. If stock prices move up too quickly, a lot of people who held on, rather than cashing out their 401(k)s, will drop stocks like a hot rock.

As Badtux explained at his place, the current “wunderkind” CEOs don’t know anything about the products they make, they only know how to sell stuff. The MBA CEO is interested in the stock market, not the market for their company’s products, so they do things that boost stock prices in the short term, but make their company less viable for the long term.

The Dow is a relic from an earlier era when we actually had “industrials” in the US that made things. If we don’t start investing in making things in this country again, and in the research and development necessary to make things people want to buy, it doesn’t matter how low prices are, no one will be able to pay them.


1 Rook { 10.18.09 at 11:44 am }

40 degrees is cold? That’s down right balmy for Minnesota this time of year. Hell, we still lay out and get tans……..
.-= last blog ..Welcome To Sunday =-.

2 distributrocap { 10.18.09 at 12:01 pm }

the whole market is just one giant cluster you know what……

3 Rook { 10.18.09 at 12:09 pm }

Well, I’ve a new avatar through Gravatar. It’s an improvement. I think.
.-= last blog ..Welcome To Sunday =-.

4 Bryan { 10.18.09 at 12:34 pm }

DC, it isn’t that organized. I’ve seen barracks crap shoots with better rules that the NYSE. It’s gambling, not investing, these days, with loaded dice and marked cards.

I don’t know, Rook, it looks a little conservative to me. 😉

Yeah, well, in Minnesota you have insulation and furnaces, which are not exactly a feature of the Gulf Coast. The new houses are designed for air conditioning, not heating. We have screen doors, not storm doors. Before the Shrubbery destroyed the tourist industry with the travel policies, people came here to be warm. Heat pumps are only effective to about 50° and then you have to rely on electric heating if you don’t have a gas space heater.

5 Rook { 10.18.09 at 4:55 pm }

Conservative? Naw, just got my hair pulled back into a pony tail.
.-= last blog ..New Avatar =-.

6 Bryan { 10.18.09 at 8:28 pm }

Well, the pony tail is definitely not in the picture.

BTW, I saw the new gravatar as soon as the page loaded. You must have been reading from cache. I dump my browser when I shutdown for the day.