Will the REAL Alan Greenspan, please, SHUT UP!!?!

When you get REALLY BIG, people have to pay attention when you start to, “throw your weight around.”  This is literally the way that elephant seals dominate a harem of females and prevent lesser males from invading their territory or their harem.  It is the way that very many of the largest species create dominance and leadership in their group.  It is the figurative or statutory value we place on certain people and the positions that they occupy that turn them into bellowing buffalo or benevolent bull elephants.

Unfortunately, like the reaction to bellowing buffalo and trumpeting elephants, the rest of the herd has a tendency to stampede.  This is too often the case on Wall Street.  Panic sets in very, very quickly in the stock market.  The bond market reacts to those panicky movements though by sheer size a “huge” influx of cash from a stock selloff is a relatively minor event, a mere “blip” on the radar of bond markets.  The debt markets are just so huge they dwarf Wall Street. 

There are, too, “whales” of comparatively behemoth sizes that also slow the turning of the equity market.  The mutual funds take hedges against any major movement in their portfolios, and it not only takes a cautious hand to protect the value of their assets, it takes a bit of unwinding to untangle the interdependencies to avoid being exposed by selling off assets that form a part of a complicated hedging strategy.  In all of these situations economic espionage is a huge advantage because advanced warning of impending news is a potential windfall, but more importantly, a chance to prepare to avoid undesirable consequences.

If all of that is just a dizzying earful of financialspeak, then perhaps I can simplify my point by pointing to a movie.  It is a rather good movie, even a favorite of mine.  The movie I am referring to is, Trading Places, starring Eddie Murphy and Dan Aykroyd, with delightful contributions from not only Jamie Lee Curtis, but also Don Ameche and Ralph Bellamy (it must be one of my favorite movies, because I didn’t even have to look up the names of the stars as I often do, not because I don’t remember who they are, just because I can’t put the names I know perfectly well onto the faces I remember). 

In any case, the movie tells the story of a pair of financial moguls who toy with the lives of the Murphy and Aykroyd characters, but their own financial scheme is to corner the market on orange juice and profit from (illegally obtained) advance information from the official “crop reports” prior to their public release.  After being set against each other by the financial powerhouse Duke brothers (Bellamy and Ameche) Murphy and Aykroyd’s characters set about to take revenge on them by manipulating the impression of the news prior to it actually being released.  The panic in the trading pits quickly sets in, and then reverses, leaving the old fellows broke and their previous victims victorious.

Do you know what the problem with that is?  The problem is that the story is all too real.  Not the part about manipulating individual lives, although presumably the writers, producers and director of the film felt that big financial institutions and the heartless villains that control them have no care or concern for, “the little guy.”  The “real” part is that it closely resembles the real life instance of the Hunt brothers (from Texas) who, already being billionaires, decided more or less on a whim to try to corner the market in silver.  The good news was that they were not successful and it cost them dearly, but the “movements” of a few certainly sent shockwaves throughout the commodities industry.

The same kind of thing happens when “the Oracle of Omaha” (as they call billionaire Warren Buffet) makes a major move in his portfolio, or some other significant financial force surprises the financial world with either an actual major sell-off, or purchase, or even just a filing of “intent” documents with the Security and Exchange Commission.  If an “elephant” is going to lean in the direction of the tree you are sleeping in, you had better wake up and be prepared to shaken up a bit.

But sometimes, and this is one of them, when the elephant has given up its leadership role, it is time for the “herd” to stop twitching nervously with every flap of his ears.  Or in this case, the flap of his gums.  Alan Greenspan became such a heavyweight in financial markets that he even swayed the debt market’s course when he spoke, because as chairman of the Federal Reserve Board, he controlled the money supply and financial policy (which indirectly, and in effect directly, controlled interest rates).  Alan Greenspan, when he was Chairman, spoke usually cautiously, but when he was too overt, the shockwaves were a financial tsunami. 

Greenspan’s pronouncement that the fantastic growth of wealth that corresponded with expansion of the economy at a tremendous rate was due to overly enthusiastic “irrational exuberance” over the internet, tech stocks and “dot com” boom.  That comment was essentially by itself the principal cause of the, “tech crash,” the loss of value of so many technology stocks and the absolute destruction of others in 1999 through 2001.

Greenspan recently admitted that the low interest rates implemented by “The Fed” (as the Federal Reserve Board is commonly known) “might” be partly responsible for the rapid expansion of home equity that has led to the “mortgage crisis” that is the current financial headache in America.  But now that he is retired, I do wish he would just shut up and enjoy his retirement.  But NOOooooo, he has to publicize the book he has written. 

Do you think it is because he “needs the money” from book sales?  I am pretty sure he and his wife, news reporter Andrea Mitchell, could live fairly comfortably on her salary alone.  Yet, Greenspan keeps talking and the market keeps reacting even though he is no longer Chairman.

Greenspan commented last weekend in an interview that we were in danger of “stagflation” in the American economy in the near future.  What he actually said was that the danger of stagflation was looming and what we needed was for the housing surplus to be absorbed quickly so that this kind of slowdown in the home building industry did not trigger a recessionary period.  The oracle had spoken, and the doomsayers were quick to quote him.

Newscasts on at least two major networks on Monday used Greenspan’s predictions to drum up interest in their broadcasts that night.  Even prior to the widespread reporting on Greenspan’s doom and gloom prediction the markets reacted with a triple digit decline in the Dow Jones Industrial Average.  But too much like the Duke brothers from Trading Places, I suspect, Greenspan already knew that housing starts were down significantly in November.  In fact, “down significantly” is putting it too mildly (not that I want to be known as a doomsayer myself).  MarketWatch, a Dow Jones web site, reports that housing permits reached a 14 year low in November of this year, and housing starts a 16 year low, down by 5.4%.  I somehow doubt that Mr. Greenspan was unaware of this, and thus, his criterion for avoiding recession was already inevitable.  His “prediction” is more or less guaranteed by a reduced supply in the housing market because fewer homes are being built.  The three month and six month supply of newly completed homes will be significantly lower, and Mr. Greenspan looks like a genius, again.

And the result of this was … Greenspan’s name is again in front of the public, his books sell better, and meanwhile, the little guy, investing in the stock market gets clobbered with a triple digit point drop in the Dow. 

It is not like Mr. Greenspan has the kind of influence he had when he was Chairman of the Fed.  Nor do I think he is malevolent in his intent.  But “the markets” (including the debt market) can’t seem to stop listening to him like he had some magical window into the future.  I know I can’t stop people from listening and making irrational decisions, so I am going to appeal directly to Mr. Greenspan.

My investment portfolio in my IRAs got KILLED in the tech stock decline thanks to Mr. Greenspan.  In 2000, my wife and I calculated we would have plenty of money to be able to retire (not that we actually planned on changing anything) by 2008.  Then came the “tech crash”.  We know you are a genius, Alan, and we owe you a great deal for your steering the financial ship for so many years, but can you please avoid any “loose lips” that might sink other people’s financial “ships”, please.

In other words, Mr. Greenspan, would you please just keep your big mouth shut?

 Love,

Stafford “Doc” Williamson

Why are you still paying retail for printer ink or toner?

http://www.Sav-Mor-On-Ink.com

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WHY THIS IS THE SECOND MOST IMPORTANT PAGE ON THE INTERNET

You might not agree with me, and generally that’s okay with me.  There are certain to be no shortage of people who disagree this is, or ever will be, the second most important page on the internet.  And if you think that the title is the most egotistical title you have ever heard then you probably have never read my book, The Day I Changed the Shape of the Universe, have you?  Indeed if you decide to pick up a copy and read that book, that alone could eventually make this page THE most important page on the internet because some day some bright young (well, probably young, since young people seem more open to new ideas) person will read that book, and it will change the future of mankind because of the understanding it gives them about the nature of matter, energy and gravity.  But that is only incidental to the purpose of this page. It is my intent to make changes in the world.  Small and personal, bold and radical, evolutionary and revolutionary, changes that will make the world a better place and life less of a frightening battle between hunger, starvation and poverty, illness and death for at least a large number of people who see little else in their lives because that is the whole of the reality they live in.  I plan to bring some of that about as a direct result of what appears on this page (and I plan to put this page on more than one of the “social networking sites” to make it more widely available too). I am going to talk about things that you might not have thought about, some that have bothered you for years, and some that are on the tip of everybody’s tongues (because they are in the “news” at the time I write about them).  But, in particular, I want to help people whose children are having difficulty learning.  I have already written two books for students in the “middle school” grades (6th, 7th, and 8th) who are not reading up to their grade level.  These books are depicted in the “header” graphic for this page (on the wordpress.com blog at least) and have sold rather poorly thus far.  They use several techniques to “lure in” the poorer readers of middle school based on observations I personally made of that type of student in the classrooms.  They tend to gravitate toward books that are “picture books” and in particular look like they are written for the lower (primary) grades.  That is exactly what Puppyfish and Puppy Goes to Lambergarten do.  They are written at a reading level of an advanced 4th grade reader, so can also be used as challenging reading for very advanced 2nd or 3rd graders too.  But they are specifically designed to be used for middle schoolers by attracting them to the format of colorful illustrations of cartoon style animals on the cover, and continuing the illustrations in the pages of the book, yet introducing them to “chapter book” style content, not the one or two sentences they expected to find in primary grade reading materials.  The stories are simple and easy to follow, but the text is extensive.   One of the best ways to employ these books is to turn these children who are struggling themselves into the “tutors” for children in primary grades, especially using these books (or books like them)(I can’t write them all).  If the middle school students are given these books to read out loud to primary grade children as part of a mentoring program for those younger children, the responsibility of being chosen for this “honor” will strengthen the middle school student’s self-esteem.  It will help motivate them to learn to read better, and indeed in some cases, they may find that the younger students actually end up mentoring the middle schoolers on how to work out pronunciation through phoneme recognition or just having a more extensive established vocabulary. If you have a pre-teen who is struggling to keep up with school work because of their difficulty reading up to grade level, you might want to become a regular reader here.  Not everything on this blog will be just on that one subject, but it will probably serve as the freely available “newsletter” for http://helpkidsread.winfotech.com as well as http://remedialreaders.winfotech.com and http://whykidscantread.winfotech.com (which for the present at least, all point to the same content).   Those sites will also have suggestions for members on products to buy, reports to read, and techniques to help young readers to be better readers.   READING is FUNDAMENTAL to ALL SUCCESS.  Reading MORE is IMPORTANT so developing ENTHUSIASM for READING is almost more important than developing the mere reading skills.  The LOVE of READING will teach someone to read far faster and far better than any formal technique.  And that is why this page is so important.  We want to promote the LOVE of reading as well as the ABILITY to READ.    The “people of tomorrow” cannot be expected to make RESPONSIBLE, INFORMED and INTELLIGENT DECISIONS about themselves, their families and their future without being able to read and understand the choices and the arguments for both sides of any decision, as well as recognize the difference between an irrational emotional appeal and a logical convincing statement of an informative nature.  Any hope for democracy surviving as more than a sham, a mere appearance of participation in government will be lost unless we can raise both awareness and intelligence in the citizens who will be voting in elections in just a few years from now.   Those “people of tomorrow” are the students of today.  Imagine the horrifying prospect of the majority of citizens who have never had the benefit of reading books like BRAVE NEW WORLD, or 1984, or SOYLENT GREEN, being drawn into an emotional appeal to “save your children” by cutting off all social assistance programs to persons over the age of 80.  “What do you want, healthy children or drooling, grey-haired vegetables in wheelchairs?  Save the National School Lunch funding!  Vote for the New Neocratic Party candidate in your district.”   Think about it.READ. Love, Stafford “Doc” Williamson

READ – It’s IMPORTANT to READ

I didn’t want to do it, but someone has to speak out.

I am not good at speaking (or writing) briefly, so you will get to exercise your eyes if you decide to follow along here.  You are welcome to drop by any time.

love

Stafford “Doc” Williamson

Why are you still paying retail for printer ink or toner?

http://www.Sav-Mor-On-Ink.com

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