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Good News, September 1-10, 2001
[Commentary] ©2001 Phil Hyde, The Timesizing Wire, Box 622, Cambridge MA 02140 USA (617) 623-8080


9/9/2001  weekend glimmers of hope -

9/08/2001  glimmers of hope - 9/07/2001  glimmers of hope -
  1. [1 UPsizing]
    Miscellany, by Stuart Elliott, NYT, C2.
    Donald J. Holtz and Andrea D. Shantz opened Benchmarketing Analytics, Fairfield, Conn., which offers data analysis and communications planning for the customer relationship management programs of marketers....

  2. Click here for today's TIMEsizing stories - 9/07/2001.

9/06/2001  glimmers of hope -
  1. [1 UPsizing]
    Cheap Tickets to close L.A. call center, Bloomberg via NYT, C8.
    ...Cheap Tickets opened a new call center in Tampa, Fla., for reservations in the eastern United States. That center, which employs 180, has a capacity for 400 reservation agents.

  2. Click here for today's TIMEsizing stories - 9/06/2001.

9/05/2001  glimmers of hope -
  1. 2 UNtakeovers -
    1. Goodrich to spin off engineering business, Reuters via NYT, C4.
      The Goodrich Corp...based in Charlotte, NC \will\ spin off its engineered products unit in a deal that executives expect will strengthen its aerospace business and relieve the firm of asbestos-liability costs assumed during a 1999 acquisition [of] Coltec Industries....
      ["The last temptation is the greatest treason, To do the right deed for the wrong reason." T.S. Eliot? Murder in the Cathedral? Here we have a good spinoff for a crassly unaltruistic motive - sooo many companies have gone bankrupt under asbestos-liability costs.]
    2. A top jeweler in Britain to divide, by Suzanne Kapner, NYT, W1.
      Asprey & Garrard, jeweler to royalty and maker of baubles for the very rich, said today that it would split itself in two....
      • Asprey will add clothing, shoes, accessories and housewares to its traditional jewelry, silverware and leather goods lines and open 20 new stores in the next three years.
      • Garrard, jewelers to the British royal family since Queen Victoria, will open 10 new stores and develop a more avant-garde line....

  2. Click here for today's TIMEsizing stories - 9/05/2001.

9/01/2001  glimmers of hope -
  1. ["good, but..." - this sounds pretty hopeful at first glance -]
    Fed is trying to determine how assets affect spending, by Louis Uchitelle, NYT, B4.
    [because it sounds like the Fed is finally doing the research to find the point of diminishing returns where additional concentration of income and wealth results in decreasing amounts of spending instead of more. But watch how the Fed has trivialized the question -]
    JACKSON HOLE, Wyo...- Hoping to get a better fix on how household wealth affects consumption, the Federal Reserve is trying to sort out the ways in which different assets - stocks or homes, for example - affect consumer spending, Alan Greenspan, the Fed's chairman, said today.
    A rule of thumb used by many economists is that for every one dollar increase in a household's wealth, the members of that household increase their spending by 3 to 5 cents.
    [Isn't this what they used to call "the wealth effect." And just how does the "marginal efficiency of wealth" fit into this piece of naivete? Looks like that's nowhere on the Fed's limited radarscreen. They're just interested in exploring the naive, low end of the concentration of income and wealth.]
    The Fed has found, however, that when a home is sold, the seller's consumer spending goes up 10 to 15 cents for every dollar of capital gain, Mr. Greenspan said.
    [Oh that's a real frequent phenomenon - not. Greenspan thus goes off on a siding, NTBSA (never to be seen again).]
    Such information is helpful in planning interest rate policy at a time when household wealth invested in stocks is shrinking while home values are rising....
    [Oh so this is Greenspan's big hope for a recovery then! He still thinks the vast majority of Americans are so well off that they can stick their finger in their mouth and say, "Thay, maybe I'll jutht take a couple of hundred-thouthand out of thtocks and put them into real ethtate." Lord, these guys are sooo insulated.]
    Mr. Greenspan spoke at the opening session of the Fed's annual symposium in this mountain resort.... Rather than discuss Fed policy and the slowdown - a topic that could stir up the markets - Mr. Greenspan devoted his 20-minute speech to a neutral discussion of the Fed's efforts to sort out the wealth effect and its impact on spending. The Fed's seven interest rate cuts this year have been aimed in large part at encouraging consumers to spend and at sustaining home prices and home construction.
    Because "consumer spending has amounted to 90% of income, it might appear that income is largely sufficient to explain consumption," Mr. Greenspan said.
    [Hooboy, what a simpleton. The factoids about record consumer debt and bankruptcies are stowed away in some other compartment of his partitioned brain. And just how long has "consumer spending amounted to 90% of income" might offer some interesting clues. And does the amount going into real estate remotely match the trillions coming out of mutual funds? If it does, and if homes are being bought in hopes of reselling them, we may be heading for the kind of real estate bust that Japan went through at the beginning of the 1990s, cuz where are the vast masses they're counting on to pay their inflated real estate prices? But Ol' Greenie takes the absolute simplest interpretation. Never a thought that maybe 90% of the income is going to the top 10% of the income brackets who couldn't spend that kind of dough in a lifetime. No, Greenie is obsessively focused on periphera, even out of touch with the Fed's own data -]
    But the Fed's studies tell a different story. "Wealth by itself now appears to explain about one-fifth of the total level of consumer outlays," the chairman said.
    [Well what if two fifths of the income - or more, much more - is going to "wealth," and we're only seeing it back in one fifth of consumer outlays, and consumer outlays are only 90% of overall income. See where this is going? But this is apparently way beyond Greenie's ken.]
    Although dollar for dollar, capital gains on home sales appear to have a more powerful effect on spending than rising stock market wealth, the latter plays a bigger role [on spending] in the end because of the huge scope of equity holdings, Mr. Greenspan said.
    [But most people's stock holdings, such as they are, are tied up in pension funds.]
    "Household capital gains on directly held equities and mutual funds in recent years have been two to four times the size of overall gains on homes," he said.
    [Well, only a minority of Americans have directly held equities and mutual funds, so that must mean the gains on homes are smaller again, and since ordinary people only sell a home once or twice in a lifetime, Greenie is investing a maximum amount of research at a point of minimum return.]

  2. Click here for today's TIMEsizing stories - 9/01/2001.


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