Collapse - 3/2001

Doomwatch^TM vs. Timesizing^®

Collapse trends - March, 2001
[Commentary] ©2001 Philip Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080

3/29/2001 omens -

Most companies plan to slow hiring, Knight Ridder via Boston Globe, C2.
For the first time in five years, a majority of companies said they do not plan to hire more workers during the next 12 months, according to a national survey. The quarterly survey, conducted by the 15,000-member Financial Executives International professional association and Duke University, polled chief financial officers at 153 companies around the country with median revenue of $100-500m. The research, which was completed March 19, shows that 31% of the companies plan to cut jobs this year and another 20% will keep employment at current levels. The remaining 49% said they intend to add workers.
Although responses weren't overwhelmingly negative, they differ markedly from previous surveys. [For example,] in the fourth-quarter study, 75% of CFOs polled said that their companies planned to increase hiring.
[And of course, they're polling employers, not employees. And employers have been known to exaggerate positive news in regard to their own companies.]

3/28/2001 omens -

As more women become lawyers, letter to editor by Prof. Joan Williams of American University School of Law, NYT, A22.
Re "Women close to being majority of law students" (front page, March 26):
Nearly 90% of working women have children [sounds high - ed.] and mothers still do roughly 80% of the child care. As a result, more than 90% of mothers aged 25 to 44 work less than 50 hours a week, according to recent census data.
[What's this, the new standard workweek for lawyers, pushed back up to the nation's 1920 level?]
The results are predictable: 86% of law firm partners are still men. Attrition rates among women are higher than among men. Most women don't leave the law; they just go to lower-paid, lower-profile or dead-end jobs.
In the law as elsewhere, women won't achieve equality until mothers do; and mothers won't achieve equality until we change the way we define the ideal worker to make it consistent with our ideals of nurturance.
[Hey Joan, we're all for that! Let's timesize our way down to defining 16-20 hours a week as full-time employment with full benefits and good pay. What the heck is technology for, anyway?! Certainly not for working more for less, as we're doing, or providing a nationwide experiment in sleep deprivation, as we're doing, according to our next article -]
Study: Americans are sleep-deprived, by Paul Recer, AP-NY-03-27-01 0342EST via AOLNews.
Americans are sleep-deprived workaholics, with only about a third sleeping the recommended 8 hours a night, and about 40% say they have trouble staying awake on the job, according to a poll released Tuesday. The survey by the National Sleep Foundation said Americans are spending more time working and less time having sex than they did five years ago....
[More time working in an age of unprecedented work-saving technology? Pretty dumb. As for the sex part, didn't we recently see this tied to the British? Yep, "Workaholic Britain too tired for sex," 3/06/2001.]
The 2001 Sleep in America poll of 1,004 adults found that 63% get less than 8 hours a night and about 31% get less than 7 hours. Many, the poll found, try to catch up on sleep on the weekends, but even then the average slumber is 7.8 hours, still less than ideal.
While they are spending less time sleeping, 40% of those polles say they are working longer hours than 5 years ago. The average workweek [of those surveyed] was 46 hours, while 38% say they worked 50 hours or more a week.
[Is this the way Rome fell? - so many feeling feeling sooo self-important that they couldn't let go? To many, being busy is being important - but the less sleep you get, the more mistakes you make.]
...52% said they spend less time having sex than they did 5 years ago, and 38% say they have sex less than once a week. The survey linked daytime sleepiness with marital problems....
Interview - Indonesian industrial job growth poor - ILO, by John Rutwich, Reuters 21:12 03-26-01 via AOLNews.
[Clashing agendas - more industrial jobs vs. more industrial robots.]
...Jakarta says the number of unemployed - combined with those underemployed, or working fewer than 35 hours a week - was 36m people in 2000, [up] from only 8.8m three years ago....
[Didn't we just see this same minimum-35-hrs/wk-for-full-employment puritanism a couple of days ago from Hong Kong? Duh yupyup, "H.K. jobless rate up slightly to 4.5% in Dec.-Feb.," below on 3/20/2001. How much deterioration and pressure does it take to nudge time-blind brains all over the world to define 35 hrs/wk as the maximum for full employment, as France has done? What are we, still in Dickens' "dark Satanic mills" of the 1830s? If we want to have any human employees left in the age of relentless robotization (and employees do seem to be necessary if we want MARKETS for all the productivity the robots are pumping out - or do you still think the "new economy" of the dot-coms taught us that markets are passé?), we need to define 35 hrs/wk as the start of overemployment if you keep working, not the start of underemployment if you work less. And what is it going to take to make the workweek automatically self-adjusting against underemployment, so that, if underemployment goes up, the workweek gradually and automatically adjusts downward, and vice versa. We call this approach timesizing. It substitutes for downsizing, and it substitutes for our usual unintelligent strategies for withdrawing surplus manhours from the job market; namely, war, plague, emigration, and makework. Our chronic denial of our state of intensifying technological under-employment is wearing thin.]

3/27/2001 omens -

Boom did little for typical families - Study finds median income in [Massachusetts] off 10%; fears rise of growing gap, by Naomi Aoki, Boston Globe, F1.
A decade of unpredented "expansion" [our quotes -ed.] did little to help the typical Massachusetts family, according to a study of household income by MassINC, a local think tank, and the Center for Labor Market Studies of Northeastern University.
[As we now know, the measures they use to come up with these fogbanks of happytalk about "expansion" and "boom" are trash. For the definitive word on this, see Dave Barry's column, "Voodoo economics," in syndication on Sun., Apr.22, 2001, for example, in the Boston Globe Magazine, p.9, excerpted by us on 4/22-23/2001.]
While housing prices and the cost of living climbed, the study found that the state's median income fell 10% between 1989 and 1999, ending the financial advantage Massachusetts residents once enjoyed over other areas of the country.
Of particular concern, the study reported, was the increase in the average household income as opposed to the decrease in the median income, signaling a growing divide between the richest segments of society and the middle to lower classes. The average state income rose 3%, carried by the tremendous increases among top wage earners. But the median income [a population-weighted measure] - meaning the income level at which half of Mass. residents fall above, and half below - can provide a more accurate picture of how the typical household is doing....

3/26/2001 omens -

[a liberal on Dubya -]
The mask comes off - Campaign image gives way to a harsh agenda, op ed by Bob Herbert, NYT, A23.
Is this what the electorate wanted? Did Americans really want a pressident who would smile in the faces of poor children even as he was scheming to cut their benefits? Did they want a man who would fight like crazy for enormous tax cuts for the wealthy while cutting funds for programs to help abused and neglected kids?...
An article by The Times's Robert Pear disclosed last week that Pres. Bush
- will propose cuts in the already modest funding for childcare assistance for low-income families....
- will propose cuts in funding for programs designed to investigate and combat child abuse....
- wants cuts in an important new program to train pediatricians and other doctors at children's hospitals across the U.S....
- plans to cut off all of the money provided by Congress for an "early warning" trust fund, which is an effort to improve the quality of child care and education for children under 5....
[Now although we agree in principle that government in general, especially the federal government, has no business micromanaging such a blizzard of bandaids, always rationalized by a chorus of lugubrious voices chanting "for the cheeeldrun," the stark fact is that centripetal forces on income in this country are so overwhelming, and centrifugal forces so weak, that we should not dismantle any of the the surviving centrifuges, however inefficient and ditsy, until we have implemented the Big Centrifuge in the Middle. Republican Pres. Herbert Hoover was creeping towards implementing the Big Centrifuge in the summer of 1932 but too darn slowly. Maverick Democrat Sen. Hugo Black actually got a primitive version of it through the U.S. Senate on April 6, 1933 (the Thirty Hour Work Week Bill), only to have it slapped down in the House by FDR and his baffled lieutenante, Frances Perkins. The Republicans had been leading the charge on shorter hours legislation for their first 75 years, but then they lost it to the Dems. Tricky Dick Nixon mentioned a 32-hour workweek on the VP campaign trail in 1956, but that was quickly doused by Ike. The Dems picked up the shorter-hours "ball" in the Black Bill but then dropped it in the New Deal, which substituted bandaids and makework for simple refereeing of work sharing. The Dems not only dropped the shorter-hours "ball," but stomped on it with a massive propaganda campaign to spin it as negative and defeatist. The effects of this campaign have endured to this day. But the Republicans fumbled the ball first, and now Dubya is acting as it they didn't. He's acting as if they had enacted the Big Central Centrifuge and can now afford to dismantle the last remaining vestiges of all the little peripheral centrifuges the Dems had been substituting. That will only give us a quicker freefall into the dreaded Black Hole economy, where wealth is sooo intensely concentrated in the relatively tiny group of families at the top that America drops rapidly into urban squalor and rural subsistence. To collapse the last 68 years, it's "Black Bill or Black Hole." The Black Hole route we're on will eventually qualify us as the biggest and most violent of 3rd-world plutocratic oligarchies. What a distinction!]
If you're worried about our economy, look at Japan's, op ed by George Will, Boston Globe, A15.
[Or maybe not, because they're just a decade ahead of us on the down-escalator -]
- ...Japan's economy has entered a second ghastly decade.
- ...By 2015 one-quarter of Japan's population will be 65 or older....
- Tokyo's stock market was nearly at 40,000 in December 1989 when the bubble burst. In eight months it plummeted to 23,000. It has continued to sink, closing at 12,854 on Thursday [3/22/2001]....
- In Japan, a stock market crisis immediately becomes a banking crisis because banks own large amounts of stock in corporations that are their customers.
  [This kind of conflict of interest is now possible in the once-great US of A because of Congress's recent repeal of the "outdated" Glass-Steagall Banking Act, which was forged in the school of hard knocks way back in the "ancient history" leading up to the Great Depression, but which kept banking and brokerages and insurers separate like watertight compartments in a submarine. But now, once again, they can all blend themselves to hell, and take the rest of us with them. Follow-up: Even the conservative Economist ragazine out of London recently came round and asked "Bring back Glass-Steagall?" in an article called "Commercial banks after Enron - Conflicts, conflicts everywhere [ie: conflicts of interest] - Was America wrong to scrap the laws that kept commercial and investment banking apart?" 1/26/2002 Economist, 61, which fudges around updating all the arguments for Glass-Steagall with simply answering the question in the affirmative, and then ends by basically virtually implicitly implying the answer is No because Glass-Steagall wouldn't be strong enough for today's Enron-calibre slime.]
- And the crisis may soon worsen because beginning April 1, banks must value their stock holdings at the current (depressed) market value, rather than the price [inflated] when purchased.
- Japan's stock bubble was accompanied by a property boom.... Then...the property boom came to a screeching halt....
- Japan in the 1990s wildly overspent on public sector "pump priming" with public works projects.
  [Compare America's huge military buildup under Reagan that quadrupled our national debt but delayed our Japanese-style reckoning - and guaranteed it would be worse.]
- There has been...$1.1 trillion sunk in public works since 1993 - bullet trains to nowhere [compare America's symbiotic Drug War and prison construction campaign], a tunnel being built under Tokyo Bay [compare Boston's Big Dig]. In 1996 the public works "stimulus" was 4-5% of Japan's GDP.... Yet Japan's economy remains unstimulated.
- Indeed, deflation has prices falling 2.5% a year - a powerful incentive for consumers to defer consumption. Compounding the problem with perverse public policy, in 1997 tax on consumption was raised from 3 to 5%....
  [Compare the sales taxes in many U.S. states and the insanely high federal sales taxes in Canada (the "GST") and France.]
- Japan's central bank has achieved this nightmare: Bank interest rates are at zero, and are not low enough..\.. Today 10-year bonds are yielding 1.1%, and two-year notes just 0.4%....
- Japan's government deficits have ranged...between 7 and 10% of GDP..\..
  [Compare USA's record trade deficit.]
[And what is George Will's solution to all this, aside from his bizarre "moral obligation to be intelligent"? He says Japan should let go of its...]
preference for social homogeneity and its consequent aversion to immigration, which inhibits social vitality and creativity....
[There goes his "moral obligation." Conservatives seem to have lost their marbles. The solution to everything is free trade and tons of immigration. Save the world by moving everybody to the U.S. and Japan - and it would even save Japan! Has it saved the U.S.? Well, what kind of "social vitality and creativity" does the U.S. have to show for its record-breaking immigration, legal and illegal, of the 1990s, you ask. Here's an indication from our prison story today (3/26/2001) -]
...Members of racial minorities accounted for 79% of drug offenders in state prisons. The total number of inmates in state prisons was 1,242,962.... [And] "We have 25% of the world's prisoners, but we're only 5% of the world's population...."
[Japan would have been in worse shape if it had been pulling in the numbers of immigrants throughout the 1990s that USA pulled in. As it is, Japan was pulling in robots faster than any other economy over the last three decades - and unlike immigrants, robots do not translate into consumers. As Reuther retorted to Ford's "Let's see you unionize these robots!" - "Let's see you sell them cars." And instead of using these robots for their design purpose = to make human life easier, Japan never adjusted the (human) workweek downward as the robots poured in. On the contrary, until recently when the U.S. overtook it, Japan has had the most working hours per year in the world. Remember - they're the people who coined the term "karoshi" for "death by overwork," and in the early 90s there were an estimated 10,000 Japanese "deaths by overwork" per year. What happens when you've got a lot of people working hours that aren't needed in the job market? Pay declines, and domestic demand declines, and your national consumer base declines. And surprise surprise, that's what happened to Japan in the 90s - slack domestic demand. So they've now got the second-most working hours in the world - next to that "great nation" that's reversed "work smart, not hard" - U.S. - and Japan has the second-shortest yearly vacations in the world. The only country with shorter vacations is Mexico according to an article about time off on our "good news" page this weekend, 3/35/2001. With the most redundant working hours in the world simultaneous with being among the most technologized economies in the world, Japan has an insecure, underpaid, redundant, underpaid, marginalized, and did we mention underpaid workforce, and a huge concentration of wealth in the top brackets where there's neither the time nor need to spend it. So they can't possibly provide markets for all the production they need to pump out just to keep all their people spinning their wheels at 40-plus hours a week. And in an additional burst of kame-kazi economics, the Japanese abandoned their domestic-demand-spurring lifetime employment policy. Lifetime employment was a real income centrifuge in the face of their rigid pre-technological over-work week and their inrushing robotization. Once they dropped lifetime employment, they were toast. Money quit spreading around at anything like previous rates, and domestic spending dropped. They kept lowering Interest rates to stimulate demand but not even ZERO rates could induce ordinary Japanese citizens to spend money they didn't have. Merchants started lowering prices and, hey presto, a crisis of deflation. Note richboys like George Will can't imagine anybody who's not rich like him, so he blames the deflation on free choice on the part of consumers - "deflation [is] a powerful incentive for consumers to defer consumption." No clue that maybe, just maybe, a lot of people would LOVE to go shopping but they have NO MONEY. And all these circumstances will now be coming to homes and neighborhoods near you in America this decade. The solution? Quit the denial about the purpose and effect of technology and share the vanishing work. Technology's whole point is to eliminate work. Why fight it? And share the huge short-term profits from technology or we'll get - no markets for technology's massive output. Charity is not the answer - too capricious, unreliable and small. The solution must be systemic. It must be a design solution, not a "shut our eyes and just have faith" response. It must involve relatively colossal reinvestment in our own markets via wages. Our design candidate is the Timesizing program.]

3/21/2001 omens -

[the "superman syndrome" kills again -]
Trucker drove 30 hours before deadly Amtrak crash, paper says, Bloomberg Mar/20/2001 12:25 ET via AOLNews.
Trucker John R. Stokes was on the road for more than 30 hours when an Amtrak train hit his tractor-trailer truck in Bourbonnais, Ill., two years ago, killing 11 passengers and injuring 122, the Chicago Tribune reported....
Stoke's truck was on the tracks at the time of the accident..\.. Stokes told authorities he was home sleeping the day before the accident, which happened when a New Orleans-bound train hit the rear axle of his truck and derailed on Mrch 15, 1999....
Officials close to the investigation say Stokes actually picked up forklifts in Ohio during the day and spent more than three times the legal time limit behind the wheel before the accident.... Illinois State Police and other investigators used gas station receipts and witness accounts to trace Stokes' route....

3/20/2001 omens (or judging from Les Thurow's column "US facing economic crisis," excerpted on our 'glimmers of intelligence' page today (3/20/2001), we're no longer talking about negative forecasts but negative reality - so let's look at the Far East and comfort ourselves with the realization that our stupidity has a lot of company) -

H.K. jobless rate up slightly to 4.5% in Dec.-Feb., Kyodo News via AP-NY-03-19-01 0457EST via AOLNews.
[And why in the world would their unemployment go up just because they've got everybody who still has a job working long hours next to burgeoning automation? Tough one!]
...Hong Kong defines a person as being underemployed if he or she works less than 35 hours a week....
[This statement was repeated verbatim in "H.K. unemployment rate up to 4.6% in Jan.-March," Kyodo News via AP-NY-04-20-01 0507EDT via AOLNews. Our comment? Still the same - This is great because it gives us an experiment that is a 180-degree contrast with France. France defines a person as being overemployed if he or she works more than 35 hours a week. Boy, Chinese puritans practicing the outdated English Puritan Work Ethic in a context of 24/7 technology - and below, Japanese puritans practicing it too -]
The land of the 'rising' sun struggles to work hard, not smart, in the age of robotization -
- Japan opts for near zero interest rates - But deflation still a threat, some say, AP via Boston Globe, D5.
  [Since Japan has already been opting for near-zero rates for several years now, it's not just "some say" but virtually "everyone says" except the insulated playboys running the Japanese government. As we drive home on our 'glimmers' page today (3/20/2001, "US facing economic crisis"), interest rate fiddling is the very definition of "superficial." Everyone worships St. Greenspan and all he does is, "Tsk-tsk, let's have a little more mascara over here on the Body Economique." He's playing fru-fru while the doyens of style, the French, are actually putting the moves on in a non-cosmetic way, cutting the workweek, and showing the world how to really live in the technological age.]
- Japan's bank acts to spur spending to revive economy - Sudden policy reversal - Eases restrictions on money supply and cuts interest rates almost to zero - Japan, in a shift, decides to pump yen into its economy, by Stephanie Strom, NYT, front page & C2.
  [But that won't do any good because, as we all know, in 2 weeks all those extra yen will be right back up there in the hands of the top income brackets where they will again gather in unspendable profusion. Meanwhile, Japan has the same problem as the U.S. and apparently, Hong Kong (see story #1 today above) - and all because of workoholism in the age of labor-saving technology - more machines, automation, cybernetics, robotization than ever before in history. And here in the USA we have the longest working hours per year in the work and Japan has the second-longest. And hey, what a coincidence! USA is going into recession for not hiring more and paying more (to somebody besides top execs) and Japan has been sitting in recession for a decade cuz they copied our dopey downsizing. Any of you "mainstream" economists getting the slightest clue from this??? Or does the taboo on treating worktime as an economic variable (let alone THE economic variable) still render you catatonic?]

3/17/2001 Churning at the top - Corporate bosses are being hired and fired like never before, and many more will go as the economic slowdown in America bites. Why is it proving so hard to find good leaders these days?, The Economist, 67.
[Our answer - There is such a colossal global labor glut caused by lack of a design mechanism to adjust the workweek downward as our levels of worksaving technology move upward, that corporate bosses all over the world are spoiled rotten. Of course, they deny the labor glut and whine like babies over an imaginary "labor shortage" which is really a skills shortage caused by an acute training shortage because they're too flooded with resumes to bother with training. They've not only lost concern for their employees. They've lost concern for the long term. They've lost concern for their customers - look at the degradation in banking services (e.g., charges for non-depositor currency exchange, charges for ATM use), credit card services (shorter payment period & charging monthly late fees as well as high interest), telephone services (charging for directory assistance - "In many places, you could buy breakfast for what it costs to obtain a long-distance number" says Lyric Winik's article, "Why is directory assistance so costly?" in Parade Magazine 1/07/2001), airlines (cramped seats, less food). And they're only concerned with stockholders because stockholders' interests so often overlap with their own because of their astronomical stockholdings and options. Of course, The Economist is not looking at the forest. Here's a taste of their painstaking tree-sifting -]
Last summer, the venerable Harvard Business Review [May-June/2000] published an article ["Don't hire the wrong CEO"] by Warren Bennis and James O'Toole, two American academics, about a phenomenon they described as "CEO churning".... Since the article was published, the rate of churn has increased sharply. In February this year, 119 CEOs left their jobs at sizeable American companies, according to data compiled by Challenger, Gray & Christmas, an outplacement firm based in Chicago. That was 37% more than in the same month a year earlier. According to Challenger, departures in the last six months of 2000 were over 40% up on the first six months of the year..\.. Why?...

Dotcom disappointments account for only a small part of the churning - 20% in America in February....
The job of CEO has become much more demanding in recent years....
- The flattening of the corporation...that was such a feature of corporate restructuring in the 1990s left those in charge with...a more demanding eight or nine..\..people reporting directly to them..\..instead of typically having four or five....
  [Self-inflicted management fad from Japan (the "bunchin" corporation).]
- Globalization has forced CEOs to travel more in order to keep in touch with their far-flung empires.... Long-haul fliers are thought to be particularly susceptible to DVT [deep vein thrombosis], and CEOs of global companies cannot easily avoid long-haul flights....
  [Self-inflicted, megalomaniacal, way-premature management fixation.]
- The need to be on top of every new development in information technology is also putting new strains on bosses, most of whom were brought up in the pre-computer era....
- The spate of mega-mergers in recent years [has meant that] when two companies become one there is room for only one boss. Despite initial devotion to a harmonious future together, one or other usually gets the elbow..\..
  [Takeovers are the recourse of frustrated management after downsizings have begun to so damage their markets that the only way a company can appear to grow is by acquiring another company's market share.]
Companies are getting worse at choosing their bosses....
- The board invariably includes the old CEO, a person whose motives for choosing a successor can rarely be entirely pure....
- When they have to choose a new leader, boards "typically go into a kind of collective trance, rhapsodizing about 'leadership'...without ever taking the first steps to define [it]." [Bennis]....
- The...enduring idea that leaders are somehow born and not made: that genetic make-up counts for more than training and experience....
- Long experience as a manager is poor training for a leader. [However, this] is not so true today [because] the corporate restructuring of the 1990s has squeezed out most [of the managers]..\..
The economic slowdown in American continues [and could become] an across-the-board recession....

3/15/2001 omens (or finally, actualities?) - a roundup of today's headlines, all the same topic -

As stocks tumble, 'President' [our quotes - ed., the Fla. papers now say Gore got 6000 more votes] sounds a note of concern - Says many are affected [no kidding] - Still, Bush says he maintains 'great faith' in economy ['faith is the substance of things unseen'] - Dow below 10,000, by Sanger & Stevenson, NYT, front page.
Do-it-yourself stock trades drop as fast as the markets, by Patrick McGeehan, NYT, front page.
The collapse of the 10,000-point floor - Dow plunges 3% as blue chips join free fall, by Michael Brick, NYT, C1.
Awaiting Fed rescue, even as Fed discourages dependency - Missed the last two years? It hardly matters, by Jonathan Fuerbringer, NYT, C1. [Even Greenspan's mojo is no match for deepening technological unemployment without updating and downsizing our 61-year-old statutory workweek of five 8-hour days.]
Investors fear global slowdown - Dow drops while Europe, Japan struggle, by Scott Nelson, Boston Globe, front page. [But Japan is struggling a lot more than Europe, and 35-hour workweek France isn't struggling at all, because they've just spurred domestic spending by cutting their workweek 9% and re-employing 3% of their 1997 unemployed - that reactivates 3% of their domestic consumer markets.]
In Japan, a lifeless economy and fears about US - Recession threatens [wakey wakey, it's been there for 10 years] as exports drop off, by Sharon Moshavi, Boston Globe, E1.
TOKYO - The leading stock-market index is hovering at a 16-year low....
[Japan either copies France and discovers Timesizing or vanishes as an economic powerhouse.]
Cisco says Boston still on the map [how reassuring] - Despite layoffs, Chambers says giant committed to area, by Peter Howe, Boston Globe, E1.
'My goal was, never in my lifetime, to have to lay off people again. I have failed in that goal.' John Chambers, Cisco Systems president.
[Isn't it time you discovered Timesizing, John? Lincoln Electric has avoided layoffs since the 50s by trimming hours instead of jobs, and Nucor since the 80s. Check out our working models page.]

3/13/2001 omens (or finally, actualities?) -

Markets plunge in wide sell-off; Nasdaq falls 6.3% - Index down 61.9% from peak - Earnings declines are cited, by Jonathan Fuerbringer, NYT, front page.
[Wieder bringt der Feuerbringer die schlechte Nachrichtungen. Again the fire-bringer brings the bad news. The photos on the left side of the front page suggest that God is punishing all mankind for the demolition of the giant 1500-year-old buddhas by the puritanical Taliban.]
...The Nasdaq composite index, the leading gauge of technology stocks, fell...below 2,000 for the first time in more than two years. The Nasdaq is now down 61.9% from its peak just over a year ago, its worst decline ever....
[or more evocative, as the story below, "Bears toss weight around, but damage is concentrated," by cheerleader/damage-controller Floyd Norris, points out, "That is the largest loss any major American index has suffered since the Depression...." Floyd's spin that damage is concentrated is contradicted by the story above -]
Yesterday's sell-off was all the more damaging because it spread far beyond the technology sector that has led the market lower while some other businesses were more stable. The Standard & Poor's 500-stock index, a broader [gauge], declined 4.3% and is now down 22.7% from its peak last March, surpassing Wall Street's definition of a bear market - a fall of 20% or more. It is the first bear market since 1987.
[So nothing during the recession of the early 90s qualified?!]
The Dow Jones Industrial Average dropped 436.37 points, or 4.1%. tp 10,208.25 on volume of 1.23B shares. All 30 stocks in the index fell, and the Dow is not down 12.9% from its peak. Declining...exceeded...advancing [issues] by a nearly 3.5-to-1 margin on the New York Stock Exchange and by nearly 4.5 to 1 on Nasdaq.... As rising markets bolstered consumers' confidence andn spending, stock market losses now show signs of causing consumers to hold back.
[How about just the realization that they've been working 80-90 hour weeks at 2-3 jobs for minimum wage and they just don't have money to spend?! Kneejerk downsizing has "disciplined" the workforce alias the consumer base into jelly, and all the raises they should have been getting in order to keep up with the waves of technology-amplified productivity have been scooped up by the wealthy and concentrated astronomically into hands so few that the money couldn't be spent in a thousand lifetimes, even if the recipients could work up some "need" to spend it. As 1929 beckons, again the big question surfaces, "How do we automate an appropriate degree of income centrifugation out of the top income brackets before they suction the spending power away from their own investments, and into the hands of the multitudes who actually have the time and need to spend it, in short, into our consumer markets?" We can't redistribute money because our experience with that indicates it creates dependency. We can redistribute employment and the earnings it brings with it. Note this is not creating work or makework. This is breaking up the clots of work that are falling on fewer and fewer people resulting from short-sighted downsizing, and simultaneously breaking open the bottlenecks of skills that are crippling corporations', industries' and economies' responses to fast-changing market conditions. So our answer to the big question? Replacing downsizing with timesizing.]

3/12/2001 weekend omens -

[Japan has laid off its own domestic markets, but don't anybody say the D-word (depression) -]
Japan is shackled by deflation [falling prices], blocking its hope for recovery - As prices plummet, the signs of recession loom, by Stephanie Strom, NYT, front page.
[Watch the twists and turns of the professional spindoctors here as the editors and a hapless reporter of the leading newspaper of the world's biggest economy struggle to avoid the obvious - Japan's a catastrophe - blurted out a few days ago by Japan's own finance minister. And remember, we're talking about the second-biggest economy in the world at the dawn of the Third Millennium.]
TOKYO - As Japan shows signs of falling back into recession [it never left], behind many [read "all"] of its woes lies deflation, a rare [happens every long "cycle"] but devastating drop in the prices of goods and services that is starting [no, continuing] to feed on itself [it started in the early 90s]. Deflation is chipping away at asset values, increasing credit risks, pinching wages and salaries, and preventing the economy from generating any sustained growth after a decade of stagnation.
[Japan is the one economy in the world that has the greatest worktime gap, the contrast between the highest degree of worksaving technology and the slowest progress on sharing the diminished technology-uncoöpted human work. Consequence - though there is not nearly as big an income and wealth gap in Japan as there is in the USA, it is still far far too big for that tightly knit and homogeneous island population. Conclusion - Japan is under pressure as is no other economy to implement Timesizing. Because if it doesn't, it will deteriorate like Russia after dropping the imperfect but functioning wealth centrifuge mechanisms of the USSR, lose its place as Number Two Economy, and join the Third World.]
Stocks are trading at the same prices of 15 years ago, and land values in major cities, which back many of the loans made by Japanese banks, have fallen 65% from their peak in 1991. Excluding fresh foods, prices in Japan dropped 1.1% last year, the greatest decline since World War II....
And with growth slowing in the United States and elsewhere, many experts fear that another slump [actually more of the same] in Japan, the second largest economy on the globe, spells big trouble for the rest of the world. Just last week, the government reported that household spending in January was actually at a lower level than a year earlier. It disclosed that machinery orders...fell nearly 12% in January from the previous month....
[Hey, you can't keep making worksaving machinery and taking your savings in layoffs without killing your own markets. But we've gone through 5%#189; paragraphs and we still haven't seen a mention of layoffs, because it's unAmerican to believe that markets can't absorb any number of layoffs without a twitch, just like oceans OF COURSE can absorb any amount of pollution.]
Over the weekend, Prime Minister Yoshiro Mori met with senior members of his party to signal his intention to step down next month, and Japan's leaders are now preoccupied with their inability to find a new prime minister....
[You gotta give them credit. No Japanese is stupid enough to want to play "Hoover" over there. We, of course, have a real stupid, Baby Bush, to play Hoover, and even he is apprehensive but he's doing his best to get the rich on his side as the play slumps on - but that policy bias in itself guarantees that the play WILL slump on, since the essence of the problem is the unspendable concentration of income and wealth and, "the more concentration, the less circulation."]
In 1994...the 76m yen [$636,000] that Mr. Hitoshi Matshshita paid for his apartment looked like a bargain. But real estate prices have continued to fall, leaving the home now worth at most 40m yen - and Mr. Matsushita still owes the bank 30m yen. "I can only work until I'm 70, and at that point, I guess my life will crash," said Mr. Matsushita, who is now 66. "Right now, I'm desperate."...
[So the alternatives are timesizing so you have enough jobs to lift the age limits on work life, or - the Kevorkian solution. And so many Japanese are already finding that solution. See our suicide pages, especially 4/29/2000 and 8/18/2000 and the following few stories. Of course, this is getting to be a significant American retirement plan as well. See 2/08/2000, "Americans are killing themselves much more than each other."]

3/09/2001 omens -

Japan finances nearly 'catastrophic,' official says, by Stephanie Strom, NYT, W1.
TOKYO...- Japan's finance minister, Kiichi Miyazawa, stunned his political colleagues and the financial markets alike today by testifying before Parliament that the government's finances were close to a "catastrophic situtation."...
[Follow-up - Kiichi apologized for saying this the next day and said he really meant to say something about the economy being "challenged" - the usual corporatese for "Boyoboy, aren't we just eating up these problems!" regardless of whether the problems are actually eating up us.]
Are share buyers that dumb, or are systems that bad?, by Floyd Norris, NYT, C1.
...The electronic communications networks, or ECNs, have differing approaches and different rules, in some cases directly contrary to the rules that traders have taken for granted for years. Now, a foolish hedge fund trader has created chaos....
The basic facts of what happened to Axcelis Technologies Inc. last week are now well known. A hedge fund trader, trying to buy shares at $9.50 to $10, prices a little below where the stock was trading, instead offered to buy shares at prices up to $95.
[The old misplaced-decimal error?]
The stock took off as those offers were sprayed out by RediBook ECN. The quoted bid and asked prices on Nasdaq peaked at $19.06 bid and $19.50 asked.
Yet hundreds of trades that did not involve [especially purchases that were not made by] the hedge fund, only some of which were later canceled, were posted at prices well above $19.50. ...Who bought shares for prices far above the Nasdaq quote? Why?
There was a time when such trades would have been virtually impossible. But the electronic networks have gained exemption from rules requiring trades to be executed within the normal market range.
["Tossing the tough lessons of the past."
"Revisiting the School of Hard Knocks."
"Reinventing the wheel, again and again and again."]
That can make sense if an institutional investor wants to buy a big block quickly, and is willing to pay a premium price. But that did not happen here. Most of the high-priced trades were small ones.
...Presumably the orders were limit orders, to buy at a particular price. But were there really that many foolish limit orders? In any case, a limit order above the market is supposed to be executed at the market [price] if possible. It may be that orders were sent to market makers whose prices were far above the best price. If so, there is something wrong with the systems and rules. "There is a fundamental principle violated here, of best-price execution," one Wall Street executive said. [Or] could it be that some market makers have found a way to take advantage of public investors?..\..Among Wall Street executives, there is a lot confusion as to how this could have happened....
[Teleprompter: "[Act real confused, guys.]"]
Our teenagers are on their own, op ed by Mary McGrory, BG, A23.
The teenagers who survived the latest school shooting are blaming themselves for what happened.... If our schoolchildren expect to survive, they must run to the authorities every time they hear a peer threaten to "kill" a science teacher who's flunking him, the coach who won't let him play, or even his mean father who won't let him have the car or his pest of a sister who won't leave him alone.
[If only we could get a fraction of this applied to the violence bursting out of our films.]
We must explain to the children that the Second Amendment to the Constitution ensures the freedom to bear arms [regardless of its impact on the freedom of speech -ed.] and that some Americans act as if the redcoats are still coming, or the Indians.
There are 65 million handguns in circulation in America....
Our teenagers are on their own.... They should realize they have a president who does not wish to discuss guns. We have told them how they can survive.... They must overcome their reluctance to rat on their pals. Maybe the solicitous adults swarming all over them can give courses on being an informer without guilt. That might be easier to do than facing up to the fact that they live in a country that cares more about its guns than its children..\.. For school safety, we must create a nation of informers.
BTW (By the way), excerpt from 8 Mar 2001 18:43:02 -0000 email from Scott Thibodeau of San Jose CA ("Silicon Valley").
The San Jose Mercury News classified/help wanted section is dramatically thinner of late....
[Says colleague Kate, "So is the Boston Globe's." ("Technology Highway" - Rim Rte. 128)]
...It looks like it's been cut by as much as 70%.
[Kate: "The Globe's is down at least a third."]
Thus it appears, the gigs have dried up.
Also there are a lot of "For Rent" signs in my neighborhood. Apartments used to be absolutely impossible to get, until about 2 months ago.
[Our area around Boston-Cambridge-Somerville Mass. and Rte. 128, the "Technology Highway," illustrates the inconsistency of a decline, because around here apartments are still tight. In fact, this very day, colleague Kate received an unprecedented symptom of tight housing in the mail - a mass-mailed postcard from a "Tanya" at a PO Box number in Somerville which begins:
"Hello,
My name is Tanya. I am a Ph.D. candidate in Sociology, at Northeastern University. I'm looking for a studio, loft or one bedroom apartment, that I can afford, in Somerville or Cambridge...."
and goes on to describe what a great tenant she is and to give her phone # and email address for anyone aware of a vacancy. It's these little inconsistencies on the vast secular slide into depression that seduce many people into complacency, especially our "corporate leaders" and their serried ranks of cheerleaders in PR, HR, copywriting, underwriting, and Wall St.]
It's starting to feel like 1991 all over again.
["Those who don't learn the lessons of history are doomed to repeat them."
"Those who don't get the point of repetitive nightmares get 'held back' in 'night class.'"
The point in the economics of the 90s and indeed of the whole 20th century is the urgent need to share one another's fate in a new way, by sharing, with all the ups and downs, the erratically vanishing, market-determined, human employment. In a word, by Timesizing.]

3/08/2001 omens - headlines & qik qomments -

[First, the background -]
Economic growth continues to slow in most areas [of the U.S.], map data by Bloomberg, NYT, C4.
[This is getting matched by other economies -]
[Here's one we hadn't heard was in trouble before -]
Australia lowers rate 0.25 point - Economy is showing new signs of slump, by Becky Gaylord, NYT, W1.
[But of course, there's no slump in the world "carriage trade" = the codename for the markets in luxury goods and services that are supported by the wealthy few who are concentrating and consolidating all the spending power (nothing against you numberless peons, you understand, - it's purely a numbers game to the rich - they never have a single thought about possible consequences) -]
LVMH reports record profit for 2000, by John Tagliabue, NYT, W1.
The world's leading luxury goods group, LVMH-Moet Hennessy Louis Vuitton of France reported record revenue and profit for 2000 today, but warned of more difficult conditions in 2001 because of slowing growth prospects in major economies, notably in North America....
[LVMH need worry less than any other company except the super-flexible timesizers, such as Nucor and Lincoln Electric. But for the vast majority of companies, Alan Greenspan is getting worried -]
Greenspan asks bankers to lend, not to shrink back, Reuters via NYT, C4.
[Gee, just like in the Great Depression when Hoover begged Americans to spend (but of course the many people with time and need to spend had no money, and the few people who had successfully contrived to concencentrate all the money in their hands had no time or need). Come to think of it, it's just like the recession of the early '90s when producers begged consumers to purchase something, ANYthing, sulking "Quirky consumers!" but again, the wealthy had suctioned the spending power away from their own markets. However, Alan - is this begging really necessary just yet? After all, look at the article right next to yours -]
Consumer borrowing accelerated in January, Bloomberg via NYT, C4.
...as spending picked up from a fourth-quarter lull [a lull at Xmas?!] and higher energy costs made repaying debt harder, Federal Reserve reports showed today. The rise of $16B in outstanding consumer debt, bringing the total to $1.5T, followed a Dec. gain of $7.2B....
"People don't borrow unless they are reasonably confident of their jobs and prospects," said William Sullivan, an economist at Morgan Stanley Dean Witter in New York....
[Don't be too sure, Mr. Wealthy NewYork Economist. They may be entering the desperation stage where they see no alternative, and they're going to run up their debt and file for personal bankruptcy before the banking and creditcard industries and those who are so obliged to them (in Congress & WhiteHouse) seal off that escape route and perpetuate our debt even if we had catastrophic medical expenses.]
[And just in case you're forgetting about the omens in other areas -]
U.S. to buy back contaminated corn, Reuters via NYT, C9.
...The Agriculture Dept....estimated the cost of the program to be $15-20 million....
[...of our tax money - basically us paying for private-sector mistakes, Pandora-Box-type risks taken on our account by companies like Aventis CropScience, maker of the frankencorn, StarLink - companies whose top executives are pulling $$$millions while we are dragged in to cover their arrogant mistakes by "our" representatives in Congress and "our" Ag Dept.]

3/01/2001 omens -

[Things are gettin' crazy - Japan's interest rates are practically zero and their economy has been in the toilet for 10 years -]
Bank of Japan cuts key rate to 0.15% [from 0.25%], citing slump, by Miki Tanikawa, NYT, W1.
[According to Kate, next they'll have negative interest rates - rich people will have to pay you to get you to borrow money from them. Except - where's the incentive to take on the risk of lending it, even now? These kinds of rates more or less guarantee that you're going to put your dough under the mattress and keep it there. Only way to centrifuge these mattress mountains of moola is to share the vanishing work instead of cutting jobs - timesizing, not downsizing.]
[But then there's the extreme opposite - Turkey's interest rates have been 7000% lately -]
Turkey's crisis trickles down - Thousands lose their jobs as fear strikes workers, by Jonathan Gorvett, Boston Globe, A11.
ISTANBUL - ...In the famous Egyptian bazaar..."All over the market area, the shutters are down and no one comes to pull them up." It is a sign of the crisis that has reduced the Turkish lira's value in less than a week, and that is threatening hundreds of thousands of jobs. At one point, interest rates soared to 7,000%....
[And their economy is just going into the toilet. Ah, the paradox of the Sameness of the Extreme Opposites.]
[Meanwhile in China, slavery reappears -]
Clip manufacturer in China convicted of forced labor, by William Rashbaum, NYT, front page.
A manufacturer of widely used [black spring] metal clips for binding documents yesterday became the first Chinese company to be convicted in the United States of using forced prison labor, when it pleaded guilty to the federal charge in New Jersey.
[Hell, don't we do that all the time in this country? - part of their punishment. Michael Moore has jumped on this issue - except, virtuous us, we "pay" our prison laborers - 10¢ an hour.]
Records seized by US Customs agents showed that the company, Allied International Manufacturing Co. Ltd. [Aimco], paid prison officials in Nanjing to have more than 60 imprisoned women assemble the clips from parts made at a nearby factory in the province, officials said.
[Just called it "arts and crafts"?]
The women were not paid, and worked so many hours that their fingers were sometimes bloodied, a federal official said.... In recent years...the widely used clips..\..had a one-third share of the US market...and supplied Staples....
["Hey, what's this red stuff on my clips?" Exactly how many hours does that take to happen?]