Collapse - Apr/2000

Doomwatch^TM vs. Timesizing^®

Collapse trends - April, 2000
[Commentary] ©2000 Philip Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080

4/28/2000 omens -

Workplace deaths up in Mass. - AFL-CIO report cites inadequate safety measures, by Diane Lewis, Boston Globe, E1.
The number of Massacusetts workers who died on the job more than doubled last year to 91, from 41 in 1998, the biggest increase in fatalities since the state started collecting such data in 1995. In its report, "Dying for Work in Massachusetts: The Loss of Life and Limb," the [400,000-member] Massachusetts AFL-CIO attributed the increase in deaths to poor safety measures and inadequate training. It also pointed to low fines for offending companies and repeat offenses that indicate that state and federal agencies are remiss....
...An additional 1,000 employees died from occupational diseases such as cancer, lung disease, or renal disease. Another 50,000 employees suffered injuries including loss of limb, contusions, burns, repetitive stress syndrome, and electric shock. Despite such injuries...the average fine paid by employers for workplace safety violations last year was $17,883, down from $19,316. Nancy Lessin, health and safety coordinator for the Mass. AFL-CIO, attributed the increase in fatalities to accidents involving several workers, as well as an increase in forced overtime, downsizing, and work-rule changes [our italics - ed.]....
[We attribute the increase in fatalities to the gradual cumulative surplus of, disempowerment of, and disrespect for, human capital occasioned by the constant inrush of labor-saving technology with no coordinated reduction in labor hours. And the Mass. AFL-CIO is yet another section of American labor that has thrown away its critical power-leverage issue, shorter hours. Now all they can do is catalog the ongoing deterioration of their position and of our society as a whole. Our employers are deeply into a victim mentality, feeling sorry for themselves because it's "so hard to find qualified workers."
- Never mind that training has been the first budget item to get cut in a crunch now for the last 20 years.
- Never mind that top executive pay is off the scales in terms of multiples of ordinary employees' pay.
- Never mind that we have more technology and less time - for our families, for our communities, for ourselves - than any other country in the world, including Japan.
[The 1960s were the last win-win decade. The 70s were the Fumbled Vision (Jimmy Carter looked so good at first but in the event, had no substantial vision). The 80s were the Me decade. The 90s were the win-lose decade. The 00s? With the boredom, frustration, violence and self-hatred in our music, art, schools, roads, and workplaces, look for the spread of war, even if we've been able to lock up more of our "troublemakers" than any other country in the world, ignore more homelessness, and prop up our stock market so that TPTB (the powers that be) never even perceive a problem as our happyhappy "economic boom" continues to break records - narrowly defined cosmetic records, that is.
[The diagnosis of the distortion of our society and economy? What caused the distortion was the freezing of our workweek at its 1940-era level (after 150 years of reduction as technology flooded in), and the subsequent dismantling of our centrifuges on income and wealth. Then indeed we got "trickle down" - but "gush up." The massive withdrawal of labor hours from the domestic job market by World War II masked the disempowering effects of workweek rigidity and delayed the dismantling of our centrifuges with lollypops like the GI Bill and the Federal Highways Program. But the erosion of labor power had already started in the Taft-Hartley Act of 1947, and the dismantling of our centrifuges began in earnest with the weakening of our progressive income tax in 1963. The growing socio-economic distortion was signalled already in 1967 with the first flickerings of the stagflation that blazed in the mid 70s.]
[Our prescription for undistorting our society? Timesizing.]

4/27/2000 omens -

Retirement savings are seen lacking for many, AP via Boston Globe, C2.
WASHINGTON - More than half of US households have saved less than they should for a comfortable retirement, and 59% of Americans expect their standard of living in old age to be lower than it is now, according to studies released yesterday by a consumer group...Consumer Federation of America..\.. An analysis...by Catherine P. Montalto, an economics professor at Ohio State University..\..based on Federal Reserve data found that 56% of households are lagging in saving for retirement.... Only 23% of households between $10-25K had a sufficient cushion.... Black [28.4%] and Hispanic [24.5%] households were much less likely to have adequate retirement savings than white ones [47.6%].... Unmarried people...tended to be less likely to have sufficient savings than married people....
Adequate retirement savings were defined as enough money to allow people to maintain a lifestyle close to their current one. On average, respondents said they expected 29% of their retirement income to be provided by Social Security.
Amazon loss widens as sales grow, pointer blowout (to C2), NYT, C1.
[Indicative of e-business in general (except lookup items like used books)?]
Amazon.com, the biggest retailer on the Internet, said that it lost $308m in the first quarter, five times its loss a year earlier, but that its sales rose 95%, beating forecasts. Excluding the cost of stock options, merger costs, and some other items, Amazon lost $122m, or 35 cents a share, which was a penny less than expected.
[...and "only" twice its loss a year earlier. Three "words" -
1. = classic case of "the faster they run, the behinder they get"?
2. So what that they beat sales forecasts if they're still way in the red!
3. Maybe they should lay off the frills (=stock options & mergers) till they've nailed the basics (=profitability).]
[And an "oh oh" about one of our prize case-study companies.]
Lincoln Electric offers to buy British company, Dow Jones via NYT, C4.
Lincoln Electric Holdings, which designs and makes arc and robotic welding systems, has offered about $740m in cash for the British engineering-equipment company Charter PLC [whose] core businesses are Howden, a maker of air- and gas-handling equipment, and ESAB, a manufacturer of welding and cutting systems....
[Sure hope Lincoln mgmt ran this by employees in some kind of vote first. Last time they adventured abroad with big investments in Venezuela and Brazil, the Venezuelan government changed, the tax benefits were withdrawn, and Lincoln lost $$mm. Reasoning that it wasn't American employees fault so they shouldn't have to forego their huge annual merit bonus, Lincoln mgmt (A) borrowed to pay the bonus and (B) went public to pay the debt. Aside from the fact that a merit bonus, purposely kept out of wages to provide a company with flexibility, should never be regarded as a given, if Lincoln runs this adventure by employees first, mgmt won't even be able to guilt-manipulate themselves into another chain of company-weakening strategies - again.]
Lincoln Electric reported $1.1B in revenue for the last 12 months..\..
[Can't leave well enough alone again, eh guys? We swear, business's biggest problem is mgmt boredom.]
Cleveland-based Lincoln said the move would help expand its international reach and product portfolio....
[There are better ways to do this, guys. Even the speculators, oops investors, agree -]
Shares of Lincoln slipped 6.25 cents, to $20, in Nasdaq trading.

4/26/2000 omens -

Consumer confidence drops again, pointer blowout (to C10), NYT, C1.
Consumer confidence weakened in April for the 3rd consecutive month, the Conference Board said, suggesting there could be some slowing in nation's spending.
Pharmacia profit shows a gain when [Monsanto] merger cost is excluded, Reuters via NYT, C24.
[Sorry, losers - "you made your bed, now lie in it."]

4/25/2000 omens -

Fines worth $22m going uncollected - Auditor raps state's failure to enforce workers' comp law - 'While this administration has made a lot of noise about worker fraud, it is choosing to turn a blind eye toward employer fraud.' Sarah Nathan, AFL-CIO spokeswoman,
by Diane Lewis, Boston Globe, E1.
The Massachusetts Dept. of Industrial Accidents has failed to assess or collect $22.2 million in fines from employers who were operating without workers' compensation insurance, the state auditor reported yesterday. Mass. law requires that uninsured companies cease operations and pay a fine of $100 per day until coverage is obtained. But a review of stop-work orders issued from 1993 to 1997 found that more than 4,000 employers were never fined or penalized by the department, even though they had been ordered to cease operations.
[This gives some tiny idea of the non-enforcement of our 1938 Federal Labor Standards Act against working hours longers than 40 hours per person per week.]
"Law-abiding employers who carry the required coverage for their employees are being placed at a competitive disadvantage because they are forced to pay higher premiums to compensate for those employers who don't follow the law," said state auditor Joseph DeNucci.
[Good for DeNucci for speaking out on this.]
DeNucci...attributed the situation to poor oversight by the department....
[Not true - the department overreached its authority and unrealistically took responsibility for state unemployment figures -]
James Campbell, the department's commissioner, acknowledged his office has issued stop-work orders but has not collected all fines. Campbell said the department decided not to fully enforce the law because "we would be adding to the unemployment rate in the state if we did."
"We have shut down approximately 20,000 companies in six years, but if we close them down and then not allow them to reopen until they pay the fine, then the average employee in Massachusetts would be out of work," he said.
[Presumably that means that at least 51% of employees in Mass. would be out of work. Where are his figures? They are not given.]
"We [did not collect all fines] because we wanted to protect those workers and protect the economy."
[We all have a choice to make -
- short-term ease and long-term suicide or
- short-term toughness and solid long-term progress.
Another example is bringing in trained immigrants instead of training poor Americans.
Or bringing in low-wage immigrants instead of paying higher wages to people already here.
Or shipping jobs to low-wage areas outside America instead of paying higher American wages.
All in the name of "helping workers" somewhere, but really just adding to the concentration of income and wealth, among the insanely insecure power elite.
Another example is working longer hours or enforcing the 40-hour maximum and reducing it.
The short-term view of "free" market competitiveness is always ready to roll us back to sweatshop conditions and slavery - and a smaller and smaller consumer base with more and more millionaires and billionaires [see 5/03/2000 #1] who couldn't possibly spend their money in a dozen lifetimes.
Employers really need to put it together - they're all angling for something for nothing, trying to "play the float" between when they cut corners or cheat and when the system deteriorates enough to register noticeable damage on their own markets.]
In a prepared statement, the Massachusetts AFL-CIO accused the department of catering to the business community.
[Not even. They have catered to the worst of the business community (the whiners) and made the best suffer (by having to pay extra).]

4/24/2000 omens -

The outlook - Poor education leaves Latin income gap wide, by Craig Torres, WSJ, front page.
...The Chilean economy, which ended a spectacular 15-year growth streak with last year's downturn, is expected to expand at a 6% rate this year. Next door, Argentina should grow at 3.4% and Brazil at 4%, says the IMF. Finance ministers in Santiago, Brasilia and Buenos Aires appear to be following all the right fiscal policies to support their economies ["right" as defined by "Typhoid Mary," the IMF?]. They are running tight budgets and bringing down interest rates. And banks are lending again.
But long-term stability in the region requires much more than a few yanks on macroeconomic levers. Without improvement in income distribution, Latin America's spectacular chapter of economic reform and growth over the past decade risks becoming a free-market experiment that failed to deliver on many of its promises.
[And it's utter heresy and totally taboo for the IMF or the World Bank to even think about income distribution. The Timesizing Program breaks this deadlock by confronting the need for improvement in employment and skills distribution. That worktime balancing preliminary lays a solid groundwork for improvement in income distribution.]
In incomes, Latin America remains the most unequal region on the planet today.
[Amazing that they still beat the U.S. Guess that's why we aren't quite down in the Third World with them yet and they're still clawing their way across the Mexican border.]
During the 1990s, the bottom 20% of the population in income garnered just 4.5% of national income. The top 20% took home nearly 53%....

4/22/2000 omens -

Nikkei ends worst week in almost a decade, Bloomberg via Boston Globe, C1.
Japan's Nikkei 225 [experienced] the biggest change in the stock average's 50-year history. [It] lost 706.64 or 3.7%, to 18,252.68.... Investors...sold Japan's biggest [old-member] stocks, such as Sony Corp. and Takeda Chemical Industries, to raise cash because the new Nikkei members have a market value almost 90 times higher than the [30 removed old-member] companies they replace.
[Well that sets Japan up for a much bigger fall - unless their finance industry manages to lobby/legislate ways to keep their stock markets propped up regardless of Japan's ongoing economic depression - oh sorry, "recession."]
[The global job shortage~labor glut rolls on, ever minimized, denied, dismissed, pooh-poohed. Here's a more extreme example than Japan -]
Ruined East Timor awaits a miracle - 6 months into U.N. tenure, 'nothing has changed', by Seth Mydans, NYT, front page.
DILI, East Timor - People here have gotten used to the scene: a mob of unemployed young men shoving, shouting and weeping in anger outside the headquarters of the United Nations, held back by an impassive multinational police contingent.... As many as 80% of the territory's 700,000 people still have no jobs. Another 100,000 or more remain in camps across the border in Indonesian West Timor, still afraid to return.... The desperation of East Timor's unemployed, and the first spasms of violence it has spawned, are the sharpest signs of a swelling discontent in this physically and emotionally traumatized land....
["Cry, the beloved country"....]
[And as for our "must-be-utopia" here in Massachusetts, this article should have been called "State spindoctoring rate" -]
State jobless rate falls sharply to 2.4% - Just 4 states post better March results, by Kimberly Blanton, Boston Globe, C1.
[At 2.4%, Mass. is still well above the 2.0% level that was regarded as alarmingly high during World War II.]
Massachusetts'...unemployment rate [is] the 5th-lowest for any state.... Mass.' rate of joblessness ranks behind only Iowa, N.H, So. Dakota, and Conn. Nebraska and Vermont were tied with Mass..\..
The Mass. Dept. of Employment and Training reported yesterday that a surge in hiring by construction and service companies, a broad category that [includes burger-flipping and retail and] also includes software development and consulting, more than offset job losses in manufacturing and trade.
[But what percentage of the new jobs had longer hours, lower pay and worse benefits?]
An increase in total employment of 1,200, on a seasonally adjusted basis, pushed the jobless rate down from 3.1% in Feb. - a steep 0.7% drop.... Mass.' jobless rate is far below the national rate of 4.1%.
[At 4.1%, the nation has more than twice the 2.0% level that was regarded as alarmingly high during World War II. On Saturday evening, Channel 38 in Boston showed 1988 sci fi "Cherry 2000" featuring Melanie Griffith and set in America's future. In it, an almost unnoticeable background newscast near the beginning drones, "...with unemployment down to 40%...." Will 40% too become negligible and then "low" to our prostituted economists? Of course, the rate is so defined that it can never go that high. The truth is, it should possibly already be there - judging from current lack of training and levels of under-employment, marginal employment, disability, welfare, homelessness and incarceration. Of course, for the last 60 years we've neglected to adjust the national workweek to account for staggeringly mounting levels of work-saving technology, and the result is, our anxious workforce is "competitively" letting its hours drift up, if still "full time," to levels not seen since the 19th century.]
In the last year, the state has increased employment by nearly 2% in a growing economy that has stretched its labor force to its limits.
[Oh yeah? Why do both parents still have to work? Then why are wages still flat? Why is the workweek still at 1910 levels and rising? Why is there still little or no on-the-job training? Why are there so many without health insurance? Why do we still have so much homelessness? Why do we still have so many state penitentiary and county/city jail inmates?]
Construction firms, due to a strong housing market...
[Note on 4/19 last, we had Aaron Zitner's "Housing starts see steep drop", Boston Globe, C1, which began, "The construction of new housing fell in March by its sharpest rate in 6 years, a signal to some analysts that US economic growth is slowing from its torrid pace. Housing starts, the US Commerce Dept. reported yesterday, declined 11.2% from Feb. to a seasonally adjusted 1.6m. It was the steepest one-month drop since Jan. 1994. Housing construction is a bell-wether of future economic activity, economists say, because buyers of new homes are also likely to purchase big-ticket items, such as furniture and appliances...."]
...and work on the "Big Dig" Central Artery/Tunnel project...
[And how many billions of taxpayer dollars is that over budget now? The Big Dig is not a sign of economic strength because it's a bottomless state-government makework project, that our sleazy, one-party state legislators enacted to make our jobless rate look rosy - despite their ever-bigger tax dig into our pockets - and their own recent undebated, midnight self-pay raise, including our own "wonderful" Pat Jehlen here in Somerville.]
...hired 1,500 workers last month.
[Hopefully the Big Dig won't go on forever. But that means that these 1500 jobs are strictly temporary.]
That resulted in a strong 7.7% rate of job growth over the past year.
[Job growth based on temporary government jobs - and there have been a lot of them from the Census Dept. too - is hardly "strong" and strictly unsustainable.]
Service companies last month gained 3,400 jobs, giving the sector an annual growth rate of 3.2%.
[Riiight. The service sector - that wonderful sector that brought you "McJobs" in three flavors -
- much longer hours, higher pay and same benefits, or
- same hours, lower pay and worse benefits, or
- part time, lower pay and no benefits.]
Driving that performance was a 6.6% annual rate of job creation in the high-tech, nonmanufacturing industry.
[Riiight. And many of these full-time jobs require virtually unlimited working hours and anyway, were undermined by the recent shakeout in technology stocks, and continue to be undermined by the ongoing shakeout in dot-com companies. The empty "spot boom" echoes on, with ever more tunnel vision from journalists and ever more strained cheerleading from economists.]

4/21/2000 omens -

[Qiki -]
Medicare spending for care at home plunges by 45% - Advocates are alarmed - Providers say many elderly stay longer in hospitals and nursing homes, by Robert Pear, NYT, front page.
[Bound to upset the senior set - and rightly so.]

4/20/2000 omens -

Wages, salaries little changed in US this year, Bloomberg via Boston Globe, C2.
Base salaries in the U.S. will rise at about the same rate this year as last as more companies use stock options and profit sharing to supplement pay, a survey found.
[There goes our stomach lining.]
The survey by the American Compension Assoc. showed that pay increases for salaried employees will average 4.4% this year, same as 1999.
[Two things we need to know here -
- how much of that 4.4% is cancelled by inflation?
- how does that 4.4% compare with top executive pay - in other words, what is the mechanism of the onrushing concentration of wealth in this economy which is strangling our consumer base and starving itself of sustainable investment targets?]
At the same time, 63% of the surveyed companies said they offered stock-based plans to their employees in 1999.
[Hopefully that figure is creeping up. It would be nice to have some comparative data on that too.]
Almost 57.2% said they extended stock options to hourly and nonunion employees.
[That's big of them. But can we realistically look to the locus of the most extreme concentration of income and wealth in human history for any substantial centrifuging of same?]
[Qiki -]
Trade deficit for Feb. hits record $29.2b, AP via Boston Globe, C2.
["Bad, but..."]
Cost estimates rise for nuclear cleanup, AP via NYT, A15.
[At least it's getting cleaned up.]
WASHINGTON - Cleaning up environmental damage from the nation's nuclear weapons program will cost $168-212B, or up to 44% more than the Energy Dept. estimated 2 years ago, the agency says. Seventeen nuclear sites will take as much as a decade longer to clean up, while...five [will be quicker].... Estimates changed because [officials] have a better idea how contaminated the sites are and what it will take to clean them. The current and former nuclear weapons sites include some of the most highly radioactive areas in the country, like
- the Hanford nuclear reservation in Washington state
- Savannah River in So. Carolina
- Rocky Flats near Denver
- the Idaho National Engineering and Environmental Laboratory

4/18/2000 omens -

British nuclear fuels moves partway to placate its critics - Assailed on safety, it names new chief, by Alan Cowell, NYT, C4.
[How about "moves cosmetically to placate..."?!]
Reeling from a series of debacles over its safety and management, the government-owned giant of Britain's nuclear industry announced a management shake-out today and pledged "a comprehensive overhaul" of safety procedures in an effort to redeem its battered standing in Europe, the U.S. and Japan. But the changes ignored critics' demands for a strategic shift in the company's businesses after government inspectors criticized its safety culture....
[Don't they mean "its risky culture"?!]
This year alone...workers falsified documents accompanying a fuel shipment to Japan [and] a saboteur severed cables on a robotic arm in a nuclear waste disposal unit.
[How about a "strategic shift" in terms of just shutting it down?! Nuclear technology is appropriate for the surface of stars, like the Sun, but not for the surface of planets, like our Earth.]
Irish and Danish activists have rekindled a campaign to shut down spent-fuel reprocessing at..\..the sprawling Sellafield plant in northwestern England....
[Let's just shut the whole thing.]
[And speaking of shutting the whole thing, wasn't this merger supposed to be good for consumers? -]
FleetBoston defends fee hikes - Says activists' complaints are unfounded, by Kerber & Mohl, Boston Globe, C1.
...Shares in FleetBoston, [by far the New England] region's largest bank, have climbed 43% since March 8 on strong results from its investment units, overseas operations, and commercial banking business.... But [its consumer banking] fees have drawn criticism from the Neighborhood Assistance Corp. of America [NACA], a Jamaica Plain [Boston neighborhood] activist organization that says FleetBoston charges its customers too much and that it is about to unfairly raise fees on many customers it acquired as part of its $13B merger with BankBoston Corp. last year.... NACA chief executive Bruce Marks...said the banks fees are "outrageous," citing the roughly $36M in cash and stock FleetBoston paid..\..FleetBoston's chief executive, Terrence Murray...and chief operating officer, Chad Gifford, last year....
[The biggest leak, the hugest source of inefficiency in our economy, is the complete lack of cap (or incentive-transformation mechanism, as in Phase 2 and Phase 3 of Timesizing.com's program) on the concentration of income and wealth. Anything that any of today's CEOs say about the efficiency of mergers - or any other kind of efficiency - is invalidated by this gaping leak. It is our greatest single environmental problem. It is completely unsustainable, demoralizing, parasitic, wasteful... (don't get us started!)]

4/17/2000 omens -

Little changed since Columbine, pointer blowout (to A12), NYT, A2.
Little beyond the walls of Columbine High School in suburban Denver has changed since last April 20, when a killing rampage thrust the school into the vortex of national debates over gun [control]....
Medical clinics for poor feeling a financial pinch, pointer blowout (to A21), NYT, A2.
A small health care revolution that has brought dozens of badly needed family doctors to newly opened clinics in New York City's poorest neighborhoods is beginning to unravel.... Many [clinics] are struggling to stay open.
China makes gains in spurring growth - A robust [8.1%] quarter offers new hope against fears of recession - Pockets of 30% unemployment, yet coastal prosperity, by Craig Smith, NYT, C12.
[China has a lot more interior than coast. Perhaps this last subhead should say, "Pockets of coastal prosperity against blanket of recession." American news is starting to rival good ol' Pravda and Izvestia for strained happytalk and rose-colored glasses. And 8.1% of squat is still squat.]

4/15/2000 omens -

Stock market in steep drop as worried investors flee; Nasdaq has its worst week - Dow is down 618, A report on inflation ignites a sell-off - technology rout,
by Fuerbringer and Berenson, NYT, front page.
The market's breathtaking plunge,
editorial, NYT, A28.
The sharp decline in the stock market is expected to delay initial public offerings,
by Kenneth Gilpin, NYT, B4.
For circuit breakers to begin, Dow must fall at least 10%,
by David Barboza, NYT, B4.
...First put in place after the 1987 stock market crash...when the Dow fell 554 points, or 7.2%..\..the circuit breakers and trading collars were meant to calm investors, or at least give them a breather.... In 1998, regulators and the operators of the large exchanges decided that trading should be interrupted or halted...in the event of a sell-off of 10, 20, or 30% from where the Dow sits at the beginning of each quarter....
[The flaw in circuit-breaker design is its one-sidedness. Circuit breakers should apply both to downward or upward movement in the markets. "Investors" need to calm down in both directions, and failure to calm the upward direction as well as the downward merely ensures greater market instability in the future. Trading collars on arbitrage trading only, in contrast to circuit breakers on all exchange trading, do have a bidirectional design -]
Trading collars, which restrain arbitrage trading, go into effect when the Dow rises or falls 200 points....
Nafta scorecard on jobs, letter to editor by Jeff Faux of Economic Policy Institute, NYT, A28.
...Nafta's supporters predicted a net gain in jobs because the trade surplus with Mexico would rise. But after Nafta went into effect, the small trade surplus with Mexico turned into what is now a $23B deficit. Using the Dept. of Commerce's [own] formula, this translates into 90,000 jobs eliminated in the last year alone. People may differ over the exact numbers, but simple arithmetic shows that Nafta has elminated more jobs in the United States than it created.

4/14/2000 omens -

Tech stocks tumble for 4th day; Nasdaq off 92 as Dow falls 201, AP via Boston Globe, C2.
[or the lulling NYT version -]
Nasdaq gasps for air, then faints away again, by 2.5%, by Robert Hershey, NYT, C1.
[Better the squib in the NYT News Summary -]
Technology continues tumble, pointer blowout (to C1), NYT, A2.
The Nasdaq lost 92.85 points, or 2.5%, to 3676.78;
the Dow fell 201.58 points, or 1.8%, to 10,923.55; and
the S&P 500 slid 26.66 points, or 1.8%, to 1440.51.
[What's the answer? Shift income and wealth from the overgrowth of financial vines to the underlying production-consumption tree that's holding them all up - barely. Centrifuge income and wealth -
- from Wall Street to wages,
- from speculation masquerading as "investment" to our consumer base via employee earnings.
Convert overtime into training and hiring. Reinvest massively in continuous training, targeted by the incidence of overtime itself. In short, implement Timesizing.

4/13/2000 omens -

Another sell-off in technology pushes Nasdaq into bear market, by Robert Hershey, NYT, C1.
In only a few weeks, Nasdaq falls 25.3% from its pinnacle - Steep drop suggests a technology bear market, by Floyd Norris, NYT, front page.
In a few weeks, Nasdaq falls from heights to loss - [But] the recent plunge in technology does not erase a 45% gain the last 12 months, continuation headline, NYT, C8.
Microsoft shares fall on analyst's report - Forecast of lower revenue sets off selling in a software giant and the technology sector, by Steve Lohr, NYT, C8.
...Blame it on Richard Sherlund [of Goldman Sachs], Wall Street's leading Microsoft analyst....
[Ooo, that's a lotta power.]

4/11/2000 "omenettes" -

Philippines set to privatize power company - The IMF makes reform of an industry a condition for the release of loans, by Wayne Arnold, NYT, C4.
[And why are we assuming that there is automatically more efficiency or less corruption in the private sector?? Private-sector corruption was usually the reason these firms got nationalized in the first place.]
Internet takeovers fuel a [23%] surge in acquisitions in Brazil, by Simon Romero, NYT, C4.
[Now the economic black-hole formation process has started in Brazil - rampant consolidation/dediversification - and it's already 3rd world! First they destroy their biological rain forests, now their economic "rain forests." Brilliant.]

4/07/2000 omens -

A business gone sour, by Steve Bailey, Boston Globe, C1.
...At what point do we worry about one player dominating a market?... Try 80%. That's the share of the Massachusetts milk market regulators say Suiza Foods Corp., the nation's largest milk processor, will have when it completes its newest step in cornering the market here....
Net retailers under the gun to start making money, by Syre and Stein, Boston Globe, C4.
...MotherNature.com's "customer acquisition" cost fell 65% last quarter but still amounted to $71 for each person placing an order for the first time....

4/05/2000 omens -

[Japan demoes our future? -]
Japanese stock strength defies bad news... - With the economy in recession and the premier in a coma, gloom might prevail - \but\ Momentum investors and funds help reach a 2-year market high, by Stephanie Strom, NYT, C4. [[[Oops, episode of Nikkei crash above on 4/22/00.]]]
[And 3 days later -]
Americans' ardor for stock unshaken by market volatility - Investors put record $54 billion in equity mutual funds in February, by Kimberley Blanton, 4/08/00 Boston Globe, C1.
[This raises a good question. In 1929, the stock market crashed. So a good portion of the top income brackets "got" the fact that there was a split-society problem and were motivated to do something about it. (Even so, they never implemented the only effective solution on the table, which was to pass the Black-Connery 30-Hour Bill of 1933 through both chambers of Congress and instead, as usual, wound up solving the split-society problem through war, in 1942.) So does today's market volatility and apparent investor recklessness indicate that we're revisiting the Roaring 20s, with a crash looming, and the same choice of intelligent (work-sharing) or nightmarish (military) solution in its wake? Or will today's financial markets never crash?
- What if there's just too much concentrated wealth in mutual prop-up mode, i.e., nowhere else to put it, and too much diversity among the top brackets to ever be at a loss for bargain hunters who rush in and quickly spread a floor under potential crashes - like the Saudi who rushed in to bargain-hunt in the stock market this week? What if the financial markets can now sustainably take their leave of reality, of market "fundamentals," and their dependence on the profits of their productivity targets? What if, like CEO pay, a high stock price can now survive indefinite red ink in the company it is "incidentally" named after? Is there really such a thing as a perpetual motion machine? Can an inefficient and closet-bankrupt company now experience an erratic but inexorably rising stock price, and even indefinitely bail itself out by selling more and more baseless, no-fundamentals stock? This would seem to be implicit in the "boomsayers'" position. "Fundamentals really don't matter any more - in this new economy.'" "The markets have a completely separate life and foundation of their own - they don't need their underlying companies - and underlying them, the value of the average company employee's working hour - any more." Just in case this strange new world is not real, Timesizing.com has a worst case plan that we should have ready to implement - "just in case."
- What if the financial markets are now ratcheted with incremental floors provided by automated money flows into 401k's (mentioned on inside page of Kim Blanton's "Americans' ardor for stock unshaken by market volatility" in 4/08/00 Boston Globe, C2) albeit still only a minority of Americans (49%) own any stock, and most just a few thousand dollars' worth, and much the most of that locked into deferred-spending pension funds, and so unavailable to bolster today's consumer spending if we clearly enter under-consumption mode like Japan? Another angle on this - the steadying (both transitively and intransitively) automatic flows of pension money from ordinary people into the financial markets mean that even without privatizing social security, the top income brackets and the finance industry has hornswoggled a large minority of Americans into propping up their pyramid scheme, even though this involves, for this large number of ordinary people, deferred gratification (until "retirement age," whenever that is - and if they survive to enjoy it) and vicarious living here and now - a pyramid scheme which is taking all leave of any basis in reality (corporate balance-sheet fundamentals = P/E ratios) and becoming entirely self-referencing.
[Is it possible that we could move into a new population-splitting stasis like the feudal period where there is a small insulated omnipotent island of super-rich, a small powerless peninsular middle class, and a huge continent of working poor, under-employed, disabled, homeless and incarcerated? What changes this "been there, done that" nightmare for the majority if there's never a market crash to penetrate the insulation of enough of the power elite to finetune the system (because there were plenty of them who never 'got' it all through the 1930s)? Why wouldn't the Ted Turner/Rupert Murdoch-owned media - the "boomsayers" - just intensify the cheerleading about this "record economic boom," this "best of all possible worlds," and just keep telling us how happy we should be - forever? What then? Shouldn't economic designers provide for this eventuality too? And ifso, how?
[Is it possible for the financial markets, although they are currently the locus of astronomical, uncapped concentration of wealth and the focus of unimaginably powerful, unbalanced centripetal forces on income, to provide some centrifugation function, as the "boomsayers" seem constantly to infer? We're so worried about the idle poor on welfare who supposedly rip off us taxpayers, but what about the idle rich surfing much huger corporate welfare ripping us off much more dramatically? If they are unobjectionable because of "entitlement," how do we redesign to include everyone in a similar entitlement? The "boomsayers" seem to be implying that this kind of inclusiveness already exists, though it certainly doesn't.]
Nasdaq plunges 575 and Dow falls 504 before snapping back - No burst bubble for tech market, but definite hiss [so what? - ed.], by Syre and Stein, Boston Globe, D1.
Feeling irrationally exuberant now? Anyone who sweated yesterday's technology stock market through each wrenching turn to its eventual ho-hum close is more likely to feel like a wet dish towel.
[But hey, isn't it time they got used to it? This churn is good for the financial sector - think of all the transaction fees!]
By lunch time yesterday we would have sworn the bubble of wild expectation and crazy valuation had finally burst, as many predicted. Later, it felt more like a balloon hissing lost confidence from a bad leak....
[Hey, gird your loins, wimps!]
Stock bubbles are burst or deflated by unpredictable things, often coming out of left field.... The spark for this week's activity \came from\ the Microsoft Corp. antitrust case....
[But the charts tell the tale -]
Investors [i.e., speculators] stampeded out of stocks early yesterday, bidding up the price of safe [oh yeah?] investments like the US Treasury's 30-year bonds. As the afternoon wore on, the money flowed back into stocks, and both investments ended up almost where they began.
[And sure enough, you can see it on the 2 charts, one above the other, of the Nasdaq composite and the 30-yr Treasuries, which look like a mirror image of each other.]
As market cools down, IPOs are feeling the chill, by Beth Healy, Boston Globe, same article cluster, same page.
[But the market isn't cooling down. It's churning warmly. And "Cabot electronics unit shares jump on 1st day" according to Boston Globe, D9, and "Energizer shares rise in first trading after spinoff" according to Bloomberg via NYT, C4, so where's the chill for IPOs? Has the financial sector become sufficiently diversified to offset any panic in one circle with bargain-hunting in another? Has it become sufficiently diversified to rapidly prop up the stock bubble with geodesic scaffolding and make it sustainable? Ifso, how does humanity make any substantial progress beyond this split-economy, split-society stagnation, that is viewed as so much exciting "growth" by TPTB (the powers that be)? Do we just evolve on toward the Eloi and the Morlocks of "The Time Machine," except with all the power on the Eloi side? Do we have to wait for boredom to motivate progress? Is boredom a sufficient goad?]
U.N. says bad government is often the cause of poverty - Sponsor of study draws Third World's fire - Why people in developing countries remain poor even when regional economies flourish, by Barbara Crossette, NYT, A11.
[What about people in the great USA who remain poor even when there's an "economic boom"? Here we don't call it "bad government." We call it "good greed." We concentrate and consolidate income and wealth without limit, starve our once-vast consumer base, nudge ourselves ever further down the slope to Third World look-alike, and relentlessly congratulate ourselves for our economic boom. ("Shut up about our record homelessness and incarceration, you doomsayer!" - We'd be doomsayers too, except for one thing - we have a positive alternative.)]

4/02/2000 omens -

Worcester hospital postpones its move as nurses picket, by Jenna Russell, Boston Globe, B2.
Citing concern for patient safety, St. Vincent Hospital administrators yesterday postponed a long-planned move to new health care campus downtown, while 200-300 nurses picketed, continuing a strike that began early Friday.... The major stumbling block in the stalled negotiations is the administration's insistence of the right to assign mandatory overtime shifts to deal with increased numbers of patients. Nurses say marathon shifts compromise their standard of care....
[Management in this "hospital" wants the option of 16-hour shifts from nurses. Does anyone out there want a nurse or doctor working on them in the 15th hour of overtime??! Once again, lazy management, spoiled by decades of labor surplus, takes the "poor us" attitude instead of doing its job and MANAGING plentiful regular (or shorter) shifts of well-rested employees. Mandatory overtime has been illegal since the Federal Labor Standards Act of 1938, but with the technology-borne global labor shortage weakening labor's leverage daily for lack of an automatic mechanism to lower the workweek in sinc with rising technology levels, enforcement began to slacken as early as World War II on the excuse of patriotism and has greatly deteriorated in the last 30 years of gross global labor glut. Plus we've got a merger in the background here. The Roman Catholic Church sold out the hospital in 1997 to big-business Tenet Healthcare System, which owns 130 hospitals and runs them with megabucks for the top executives and a keen eye on stock speculators' impact on the stock price - patients and staff are secondary - another small step toward systemic breakdown. Dozens of similar examples can be adduced from the Roaring '20s. Check out also the Boston Globe editorial squawking about the 16-hour shifts on 4/07/00 and note that the strike was settled on 5/12/00, "Pact reached in strike of Worcester nurses," by Diane Lewis, Boston Globe, front page: "...The contract, hailed by the Mass. Nurses Assoc. as a 'huge victory,' limits mandatory overtime...to no more than 4 hours twice every 3 months or 8 times a year. The agreement also gives union members the right to refuse specific overtime assignments...."]

4/01/2000 omens -

Japanese unemployment at record [4.9%], blowout pointer (to B2), NYT, B1.
[Their unemployment sensitivity is still more sensitized than ours so 4.9% is an appropriately big deal, as anything over 2% was for us during World War II. For more on this story, see our first downsizing item today (4/01/2000).]
In the money, pointer blowout (to C1), Boston Globe, front page.
The combined value of salaries, bonuses, and stock options given to the nation's CEOs surged 21% last year.
Taking stock - Some CEOs in New England saw compensation rocket with market, by Kimberly Blanton, Bos Globe, C1.
...Chief executives of New England firms - CMGI Inc. [David Wetherell], Lycos Inc. [Bob Davis], and Tyco International Ltd. [Dennis Kozlowski] - were among CEOs nationwide who got the biggest pay and options packages last year, said Graef Crystal, an executive pay expert...based in San Diego..\..who released his report yesterday \comparing\ compensation at some 400 US corporations. The combined value of salaries, bonuses, and stock options given to the nation's CEOs by corporate boards surged 21% last year, according to Crystal.... That followed a hefty 16% increase in 1998.
[Just as in the Roaring '20s. And "the more concentration, the less circulation" and the greater the propensity for cascade & depression.]
For most CEOs, the gains came not from salaries, which were generous [not to say "insane," even for screw-ups - ed.] but from grants of stock options, often by high-technology companies whose share prices soared in the bull market....
[Much like a pyramid scheme - where else do they have to put their astronomical salaries? - they don't have time to spend them. Briefly, the Timesizing.com solution to this is to reduce the labor surplus by withdrawing labor hours from the job market, not by our usual traumatic method of war or plague, but by enforcing overtime and reducing the maximum workweek per person. As the supply of labor hours quits overwhelming the market for human work, diminishing at an accelerating rate as technology takes over more and more of it in every industry, market forces raise general pay and benefit levels on a flexible basis and centrifuge wealth out of the top income&wealth brackets, as during 1918-19 and 1943-46 (war years with 1 year lag), a "positive" economic effect noted as early as the Black Death which swept away a quarter of the population of Europe in 1348 but by centrifuging income to those who actually spent it, generated a sustainable economic boom.]
Shares of DrKoop.com plummet, blowout pointer (to B3), NYT, B1.
...after its accountant said [it] has lost money since it started and might not survive.
[Strange that an accountant would be allowed to draw such an inference. "Impertinent, prejudicial and immaterial," as Perry Mason would say. But now that it's drawn, the shakeout begins. Speculators are 'osmosing' from Internet to mfg stocks, from Nasdaq to NYSE, and if this is really the start of the downward rollercoaster, better sooner than later, because "the bigger he is, the harder he falls."]