Entry-level jobs
Disappear thanks to AI
Time to rethink work
Showing posts with label employment. Show all posts
Showing posts with label employment. Show all posts
Thursday, August 28, 2025
Tuesday, November 30, 2021
Saturday, December 26, 2015
The Haiku of Finance for 12/26/15
Work on Boxing Day
Tech leaders will pay you less
Compete with cheap STEM
Tech leaders will pay you less
Compete with cheap STEM
Silicon Valley Pivots From Collusive Wage Fixing to Immigration Wage Arbitrage
It was not that long ago that news stories broke about how the late great Steve Jobs brokered a collusive wage-fixing agreement among Silicon Valley's most powerful companies. Almost all of the top players signed on because they wanted a ceiling on the compensation for their most talented workers. Silicon Valley has since found a better way to suppress tech workers' wages.
Tech big shots aren't satisfied with keeping their most productive rock stars in line. They want to push everyone's compensation down by encouraging the immigration of skilled tech workers who are accustomed to far less compensation than American-born STEM professionals. Temp workers on H-1B visas can come here for training and then return to the tech employer's branches outside the US. The foreign workers will earn much lower compensation there. Global wage arbitrage will drive American tech workers to compete with those lower wages. The Silicon Valley-funded Fwd.us pushes for a version of immigration reform that will open the door wide to permanently high immigration in STEM labor categories.
The legal settlement in the wage collusion lawsuit cost big companies $325M. The total funding for Fwd.us so far is much less than that sum. OpenSecrets.org's listing for Fwd.us notes that they spent $720K on lobbying in 2014 and $420K so far in 2015. That's a tiny fraction of the $50M they supposedly raised according to re/code, begging the question of whether they spent the rest on TV ads or other things that have nothing to do with adding grassroots pressure to a lobbying effort. Experienced Washington hands would have told them to engage the US Chamber of Commerce and other inside groups to identify which members of Congress are most amenable to a pro-business argument. Better luck next time.
Billionaires don't like paying a premium for highly intelligent people. Those people would then have the financial resources to start competing firms on their own. The Valley's mandarins would prefer that their most skilled professionals remain wage slaves motivated by non-cash perks, like gourmet food courts and on-site yoga classes. The road to neofeudalism will be paved with uncontrolled immigration. I am all in favor of sensible immigration reform that fills true labor shortages and offers illegals some kind of safe status. I just don't think Fwd.us has a clue how to make that case in Washington, if they're so inclined.
Tech big shots aren't satisfied with keeping their most productive rock stars in line. They want to push everyone's compensation down by encouraging the immigration of skilled tech workers who are accustomed to far less compensation than American-born STEM professionals. Temp workers on H-1B visas can come here for training and then return to the tech employer's branches outside the US. The foreign workers will earn much lower compensation there. Global wage arbitrage will drive American tech workers to compete with those lower wages. The Silicon Valley-funded Fwd.us pushes for a version of immigration reform that will open the door wide to permanently high immigration in STEM labor categories.
The legal settlement in the wage collusion lawsuit cost big companies $325M. The total funding for Fwd.us so far is much less than that sum. OpenSecrets.org's listing for Fwd.us notes that they spent $720K on lobbying in 2014 and $420K so far in 2015. That's a tiny fraction of the $50M they supposedly raised according to re/code, begging the question of whether they spent the rest on TV ads or other things that have nothing to do with adding grassroots pressure to a lobbying effort. Experienced Washington hands would have told them to engage the US Chamber of Commerce and other inside groups to identify which members of Congress are most amenable to a pro-business argument. Better luck next time.
Billionaires don't like paying a premium for highly intelligent people. Those people would then have the financial resources to start competing firms on their own. The Valley's mandarins would prefer that their most skilled professionals remain wage slaves motivated by non-cash perks, like gourmet food courts and on-site yoga classes. The road to neofeudalism will be paved with uncontrolled immigration. I am all in favor of sensible immigration reform that fills true labor shortages and offers illegals some kind of safe status. I just don't think Fwd.us has a clue how to make that case in Washington, if they're so inclined.
Friday, November 06, 2015
The Haiku of Finance for 11/06/15
Never shortchange cash
Freebies do not pay the bills
Avoid tech serfdom
Freebies do not pay the bills
Avoid tech serfdom
Never Shortchange Yourself In Tech-Land
I really got into a tussle yesterday on my friend's Facebook wall. Her immature "friends" were endorsing the non-cash benefits of employment at a very large, well-known tech company in Silicon Valley. I argued for ignoring the non-cash amenities and for prioritizing compensation. I was the lone voice crying out in the wilderness. I am right and everyone else is wrong.
Silicon Valley techies love to think of an employer as a substitute parent. Tech firms encourage this juvenile mentality with free food, on-site gyms and masseuses, video game break rooms, and other nonsense. The global firms with billions in revenue can afford to spend on this baloney. Startups that can't afford it with organic revenue convince their venture investors to subsidize them, like adult children whose parents cover their rent. Replicating a fun college campus is supposed to incentivize creativity. I think it's a misguided but unfortunately effective way of keeping highly productive workers psychologically attached to a big employer.
The workers who fall for this Silicon Valley wage slavery are usually highly logical in their daily work. It makes the seduction all the more befuddling until we consider behavioral economics. Humans are not as rational in making decisions in their personal lives as they believe themselves to be. We give more weight to recently acquired information, for example, than we should give to more thoroughly proven information learned at various points. The behavioral habits inculcated from daily trips to the free "campus" cafeteria and free yoga rooms are hard to break even when a competitor offers a five-figure cash raise.
I'll work the math for my super-smart Silicon Valley friends. Let's say I'm weighing two job offers, one with $20K more than I make now and the other with no raise but free food. Eating the equivalent of a $10 meal three times a day is a cost savings of $30 a day, which BTW is also a couple week's worth of groceries for the few Silicon Valley people proactive enough to plan their own meals like grown-ups. Anyway, I have digressed. The $30 savings over about 260 or so actual work days per year (not counting the weekends or a few holidays) comes to about $7800 in annual savings. Any proposed offer from a competitor that exceeds that $7800 after taxes and commuting costs is a step up in lifestyle. I would rather take the extra $20K if it meant I'm back to buying my own meals, because my penchant for cheap groceries means my bills will be much less than that $7800 meal cost avoidance. Too many very smart Silicon Valley engineers fail to run those numbers when weighing job offers. They stick with the free stuff and their employers know it. The HR people hidden on these big tech campuses know the math and that's why spending on free food matters more than cash bonuses.
Non-cash benefits are always ephemeral. Companies that hit a rough patch for a quarter or two cut back on frivolous expenses first, before they cut more important things like ad spending or the IT budget. They cut those other things too in recessions, right when they're about to cut people. The non-cash benefit of a corporate reputation also means just about nothing. The prestige of having a high-flying company's brand name on a resume means nothing without the personal pedigree to back it up. Plenty of people went to work at Webvan, Enron, Bear Stearns, and Lehman Brothers with high expectations before those firms collapsed. Top programmers are in demand because of their reputations earned at big firms, startups, hackathons, and academia. They are their own brand. I have a couple of top financial brands on my resume that mean nothing because elitists look down their nose at me. Prospective employees who prioritize a company's prestige and empty promises over cash have their priorities backwards.
I can't tell my fellow Bay Area professionals how to live their lives or spend their incomes. I am sometimes sad when I realize that so few of them think like me. Many STEM graduates work hard solving complex problems and not all of them are highly compensated. The enormous cognitive load of coding, designing, and diagramming all day must leave little energy left on the charter bus ride back home to think about gaining financial advantages. Maybe these top-notch Silicon Valley producers are just as immature as the spoiled brat trust fund kids and permanent adolescents I've met in San Francisco. They all need to get spanked. Adults work for money because that's what pays rent, taxes, insurance, college debts, and every other bill that would otherwise bring bankruptcy if left unpaid. Cash compensation enables wealth creation that accelerates retirement and makes our final years of life comfortable. San Francisco and Silicon Valley need to grow up. Part of growing up is learning not to sell yourself short. I will never shortchange my financial future in exchange for the phantom freedom of high-tech campus paternalism.
Silicon Valley techies love to think of an employer as a substitute parent. Tech firms encourage this juvenile mentality with free food, on-site gyms and masseuses, video game break rooms, and other nonsense. The global firms with billions in revenue can afford to spend on this baloney. Startups that can't afford it with organic revenue convince their venture investors to subsidize them, like adult children whose parents cover their rent. Replicating a fun college campus is supposed to incentivize creativity. I think it's a misguided but unfortunately effective way of keeping highly productive workers psychologically attached to a big employer.
The workers who fall for this Silicon Valley wage slavery are usually highly logical in their daily work. It makes the seduction all the more befuddling until we consider behavioral economics. Humans are not as rational in making decisions in their personal lives as they believe themselves to be. We give more weight to recently acquired information, for example, than we should give to more thoroughly proven information learned at various points. The behavioral habits inculcated from daily trips to the free "campus" cafeteria and free yoga rooms are hard to break even when a competitor offers a five-figure cash raise.
I'll work the math for my super-smart Silicon Valley friends. Let's say I'm weighing two job offers, one with $20K more than I make now and the other with no raise but free food. Eating the equivalent of a $10 meal three times a day is a cost savings of $30 a day, which BTW is also a couple week's worth of groceries for the few Silicon Valley people proactive enough to plan their own meals like grown-ups. Anyway, I have digressed. The $30 savings over about 260 or so actual work days per year (not counting the weekends or a few holidays) comes to about $7800 in annual savings. Any proposed offer from a competitor that exceeds that $7800 after taxes and commuting costs is a step up in lifestyle. I would rather take the extra $20K if it meant I'm back to buying my own meals, because my penchant for cheap groceries means my bills will be much less than that $7800 meal cost avoidance. Too many very smart Silicon Valley engineers fail to run those numbers when weighing job offers. They stick with the free stuff and their employers know it. The HR people hidden on these big tech campuses know the math and that's why spending on free food matters more than cash bonuses.
Non-cash benefits are always ephemeral. Companies that hit a rough patch for a quarter or two cut back on frivolous expenses first, before they cut more important things like ad spending or the IT budget. They cut those other things too in recessions, right when they're about to cut people. The non-cash benefit of a corporate reputation also means just about nothing. The prestige of having a high-flying company's brand name on a resume means nothing without the personal pedigree to back it up. Plenty of people went to work at Webvan, Enron, Bear Stearns, and Lehman Brothers with high expectations before those firms collapsed. Top programmers are in demand because of their reputations earned at big firms, startups, hackathons, and academia. They are their own brand. I have a couple of top financial brands on my resume that mean nothing because elitists look down their nose at me. Prospective employees who prioritize a company's prestige and empty promises over cash have their priorities backwards.
I can't tell my fellow Bay Area professionals how to live their lives or spend their incomes. I am sometimes sad when I realize that so few of them think like me. Many STEM graduates work hard solving complex problems and not all of them are highly compensated. The enormous cognitive load of coding, designing, and diagramming all day must leave little energy left on the charter bus ride back home to think about gaining financial advantages. Maybe these top-notch Silicon Valley producers are just as immature as the spoiled brat trust fund kids and permanent adolescents I've met in San Francisco. They all need to get spanked. Adults work for money because that's what pays rent, taxes, insurance, college debts, and every other bill that would otherwise bring bankruptcy if left unpaid. Cash compensation enables wealth creation that accelerates retirement and makes our final years of life comfortable. San Francisco and Silicon Valley need to grow up. Part of growing up is learning not to sell yourself short. I will never shortchange my financial future in exchange for the phantom freedom of high-tech campus paternalism.
Wednesday, October 21, 2015
LGBT Time To Shine In Business
Today I completed an Economist Insights survey distributed to business thought leaders. I get these all the time from various media outlets seeking to aggregate my genius with that of other leaders. This one was about LGBT inclusion, something I don't think I've ever addressed on the Alfidi Capital Blog. The world has gone without my awesome wisdom on this topic for far too long. I won't keep you all deprived any longer.
You'd think that LGBT inclusion would now be a given among corporate executives. Globe-trotting honchos are supposed to be some of the most cosmopolitan and enlightened people around. The tone of the Economist survey's questions hinted that executives in some regions are further behind their global peers. Local culture is probably a limiting factor. Imagine writing an inclusive HR policy for a multinational conglomerate only to discover that local government officials in some backwards country won't tolerate contact with an openly LGBT employee.
Catalyst's Quick Take: Lesbian, Gay, Bisexual & Transgender Workplace Issues from May 2015 is the most comprehensive body of knowledge I could find on the workplace value of LGBT employees. They have plenty of buying power but they also face more barriers to advancement. I may not have blogged much about workplace discrimination in the past, but I have definitely blogged about how C-suite personal behavior and HR performance incentives determine the entirety of corporate culture. Change starts at the top because people emulate their leaders' personal behavior and respond to economic incentives. Get CEOs out in front meeting with their LGBT employees' affinity networks, and get their public endorsements of nondiscriminatory HR standards. Advances in ERP knowledge management modules now offer collaborative tools that managers can use to ensure everyone, gay or straight, stays engaged.
I have tried reaching out to LGBT people here in San Francisco. I sat at the same table as a gay man and a post-operative transsexual female during my service on the City and County of San Francisco's Veterans Affairs Commission. I never had any problems with their personal histories, although other Commissioners frequently disagreed with my policy ideas. I may have ruffled a few feathers in 2012 when I declined to endorse one Commissioner's idea to name a US Navy ship after Harvey Milk, because I do not believe in naming warships after politicians of any stripe . . . not even for the USS Ronald Reagan (CVN-76). I stated back then that I would much prefer to see the US Navy name a ship after Baron Friedrich Wilhelm von Steuben, a true Revolutionary War hero who was probably homosexual. If anyone can carry the torch for a group that's been ignored or suppressed for most of human history, it's someone with battlefield bona fides. I'm pretty sure the San Francisco County Veterans Service Office has a record of my Commission statements on file somewhere.
Alfidi Capital is a one-person operation for a single, straight white male (that's Yours Truly, Anthony Alfidi, in case you need the hint). There isn't any internal policy change I could make with this enterprise that would make a difference for the LGBT community because I would only be talking to myself. My so-called white male privilege doesn't help me around the home office if I'm the only one here. Running my mouth to the outside world is a far more effective way to make people change their minds. Hey corporate honchos, lots of your LGBT people are in hiding because they wonder whether their leaders care about them. It's their time to shine after spending forever in the dark.
You'd think that LGBT inclusion would now be a given among corporate executives. Globe-trotting honchos are supposed to be some of the most cosmopolitan and enlightened people around. The tone of the Economist survey's questions hinted that executives in some regions are further behind their global peers. Local culture is probably a limiting factor. Imagine writing an inclusive HR policy for a multinational conglomerate only to discover that local government officials in some backwards country won't tolerate contact with an openly LGBT employee.
Catalyst's Quick Take: Lesbian, Gay, Bisexual & Transgender Workplace Issues from May 2015 is the most comprehensive body of knowledge I could find on the workplace value of LGBT employees. They have plenty of buying power but they also face more barriers to advancement. I may not have blogged much about workplace discrimination in the past, but I have definitely blogged about how C-suite personal behavior and HR performance incentives determine the entirety of corporate culture. Change starts at the top because people emulate their leaders' personal behavior and respond to economic incentives. Get CEOs out in front meeting with their LGBT employees' affinity networks, and get their public endorsements of nondiscriminatory HR standards. Advances in ERP knowledge management modules now offer collaborative tools that managers can use to ensure everyone, gay or straight, stays engaged.
I have tried reaching out to LGBT people here in San Francisco. I sat at the same table as a gay man and a post-operative transsexual female during my service on the City and County of San Francisco's Veterans Affairs Commission. I never had any problems with their personal histories, although other Commissioners frequently disagreed with my policy ideas. I may have ruffled a few feathers in 2012 when I declined to endorse one Commissioner's idea to name a US Navy ship after Harvey Milk, because I do not believe in naming warships after politicians of any stripe . . . not even for the USS Ronald Reagan (CVN-76). I stated back then that I would much prefer to see the US Navy name a ship after Baron Friedrich Wilhelm von Steuben, a true Revolutionary War hero who was probably homosexual. If anyone can carry the torch for a group that's been ignored or suppressed for most of human history, it's someone with battlefield bona fides. I'm pretty sure the San Francisco County Veterans Service Office has a record of my Commission statements on file somewhere.
Alfidi Capital is a one-person operation for a single, straight white male (that's Yours Truly, Anthony Alfidi, in case you need the hint). There isn't any internal policy change I could make with this enterprise that would make a difference for the LGBT community because I would only be talking to myself. My so-called white male privilege doesn't help me around the home office if I'm the only one here. Running my mouth to the outside world is a far more effective way to make people change their minds. Hey corporate honchos, lots of your LGBT people are in hiding because they wonder whether their leaders care about them. It's their time to shine after spending forever in the dark.
Thursday, August 20, 2015
SVForum Disrupts Unemployment With i4j Panel
I checked out SVForum's "Disrupting Unemployment" event last night, part of the Innovation for Jobs (i4j) project. I drove on down to Microsoft's Silicon Valley campus to get acquainted with thought leaders cutting through the bleeding edge of career transformations. I had to get my fill of chicken fingers and dolmas before the intellectual action began. Check out my awesome badge selfie before I get down to business.
The official welcome laid out the global problem at hand. A whole bunch of people in the world are either not gainfully employed at decent incomes, or not totally committed to their chosen work. My Google search for "percent of global labor force not earning sufficient income" turned up a bunch of reports from McKinsey, the US Department of Labor, and Pew Research showing how global markets increasingly challenge ethnic minorities and low-skilled workers. I am intrigued with i4j's thesis that new digital career-matching tools will reduce job frictions and add to personal income at the microeconomic level, eventually boosting the US's lackluster macroeconomic growth. I recall from my undergraduate studies in economics (yes, I still have all of my textbooks and course notes) that structural unemployment is the stickiest part of the unemployment picture. Rapid tech changes will add to that problem. I will tune in to the i4jECO Summit in January 2016 to see how thought leaders are solving that problem.
Legendary tech guru John Hagel gave the keynote last night. I have followed his work for many years and we are connected through friends, but last night was the first time I came face to face with this guy. He is totally brilliant. I'm sure he would find my own brilliance impressive but I wasn't there to steal his thunder. Anyway, John laid out the three challenges of automation, accelerating skill obsolescence, and a substandard educational system that hinder more effective career matches. He thinks society still needs institutions that can scale learning for a mass market. His key is connecting work to passion. Got it, scale and passion go together, sort of like peanut butter and jelly but without the bread.
My friend Robin Farmanfarmaian moderated the expert panel. I have no idea where she gets the energy to organize all of these high-profile events. I would need a fusion reactor to generate as much energy as she manifests. Alrighty then, enough about my energy deficit. The panel addressed the US's national competitiveness first. I am disappointed that the US is dropping in rank on a leading freedom index. That's what we get for adopting bailouts and managed health care regimes as the new normal. At least one panelist finally recognized that Silicon Valley's penchant for solving the rich world's problems in speedy transport and gourmet meal delivery won't always convert to developing countries that really need basic WiFi infrastructure.
The one panelist who insisted on being a negative Nellie eventually struck a few nerves. He was on a roll panning major telecom companies as losers, and describing a mostly jobless future where automation forces more people to earn less. His argument with another panelist about how coal workers recovered from mine troubles would have made more sense if either one of them had cited hard data. One audience member rudely called baloney on the negativity by citing The Seamless City, about how public-private partnerships and smart metrics solve urban blight. He could have waited until the Q and A to make his point without interrupting. I'd like to see San Francisco become a seamless city, once the mayor takes on the non-profits who lock up city contracts and grants.
One audience member claimed that some measure of worldwide return on assets now exceeds the return on work. I find that hard to believe without a citation. Record ROIs worldwide are lately more a function of central bank monetary stimulus. Once that steroid infusion ends, the pendulum should swing back to worker productivity. The HR community has metrics for the ROI of workforce investments, especially for job-specific training. Look them up at SHRM for yourself. Come on, people, nothing is impossible. The entrepreneurs in the audience working on people-centric innovations can get it done.
I stuck around longer than necessary in case anyone needed to partake of my wisdom, or in case any attractive women wanted my phone number. No one took me up on either count. That gave me time to grab more food and drink. SVForum held my interest all night.
The official welcome laid out the global problem at hand. A whole bunch of people in the world are either not gainfully employed at decent incomes, or not totally committed to their chosen work. My Google search for "percent of global labor force not earning sufficient income" turned up a bunch of reports from McKinsey, the US Department of Labor, and Pew Research showing how global markets increasingly challenge ethnic minorities and low-skilled workers. I am intrigued with i4j's thesis that new digital career-matching tools will reduce job frictions and add to personal income at the microeconomic level, eventually boosting the US's lackluster macroeconomic growth. I recall from my undergraduate studies in economics (yes, I still have all of my textbooks and course notes) that structural unemployment is the stickiest part of the unemployment picture. Rapid tech changes will add to that problem. I will tune in to the i4jECO Summit in January 2016 to see how thought leaders are solving that problem.
Legendary tech guru John Hagel gave the keynote last night. I have followed his work for many years and we are connected through friends, but last night was the first time I came face to face with this guy. He is totally brilliant. I'm sure he would find my own brilliance impressive but I wasn't there to steal his thunder. Anyway, John laid out the three challenges of automation, accelerating skill obsolescence, and a substandard educational system that hinder more effective career matches. He thinks society still needs institutions that can scale learning for a mass market. His key is connecting work to passion. Got it, scale and passion go together, sort of like peanut butter and jelly but without the bread.
My friend Robin Farmanfarmaian moderated the expert panel. I have no idea where she gets the energy to organize all of these high-profile events. I would need a fusion reactor to generate as much energy as she manifests. Alrighty then, enough about my energy deficit. The panel addressed the US's national competitiveness first. I am disappointed that the US is dropping in rank on a leading freedom index. That's what we get for adopting bailouts and managed health care regimes as the new normal. At least one panelist finally recognized that Silicon Valley's penchant for solving the rich world's problems in speedy transport and gourmet meal delivery won't always convert to developing countries that really need basic WiFi infrastructure.
The one panelist who insisted on being a negative Nellie eventually struck a few nerves. He was on a roll panning major telecom companies as losers, and describing a mostly jobless future where automation forces more people to earn less. His argument with another panelist about how coal workers recovered from mine troubles would have made more sense if either one of them had cited hard data. One audience member rudely called baloney on the negativity by citing The Seamless City, about how public-private partnerships and smart metrics solve urban blight. He could have waited until the Q and A to make his point without interrupting. I'd like to see San Francisco become a seamless city, once the mayor takes on the non-profits who lock up city contracts and grants.
One audience member claimed that some measure of worldwide return on assets now exceeds the return on work. I find that hard to believe without a citation. Record ROIs worldwide are lately more a function of central bank monetary stimulus. Once that steroid infusion ends, the pendulum should swing back to worker productivity. The HR community has metrics for the ROI of workforce investments, especially for job-specific training. Look them up at SHRM for yourself. Come on, people, nothing is impossible. The entrepreneurs in the audience working on people-centric innovations can get it done.
I stuck around longer than necessary in case anyone needed to partake of my wisdom, or in case any attractive women wanted my phone number. No one took me up on either count. That gave me time to grab more food and drink. SVForum held my interest all night.
Wednesday, August 05, 2015
Saturday, April 04, 2015
Thursday, January 15, 2015
Tuesday, July 15, 2014
Investing in Collaboration
I attended "The Art of Collaboration" yesterday at the Commonwealth Club. Stewart Levine was an intelligent and witty presenter on the importance of collaboration skills in the workplace. I think the dude should teach at the Learning Annex but he's probably got a full calendar working with Resolution Works and Mobile Business Academy. I learned enough about his themes to want to read his book Getting to Resolution because I must apply financial metrics to collaboration.
The one point Mr. Levine made that jumped out at me was that organizations now hire people for their emotional intelligence (EI). I can only assume he had senior management positions in mind where skills in managing people matter more than technical competence. I am absolutely certain that EI does not matter at all in low skill, entry-level jobs like the ones I held before becoming self-employed. Some level of experience is still a primary requirement to obtain even the lowest position in a white collar professional career. No amount of EI can replace entry-level skill but EI doesn't matter when working with low skill idiots. I really liked Mr. Levine's advice on dealing with sociopaths: Get away from them.
Collaboration has tons of literature supporting different approaches throughout history. I am more immediately concerned with determining whether managers can measure collaboration's ROI. The Wikipedia articles I like to reference feed a non-profit collaborative platform. Macrowikinomics extends the original Wikinomics model into a for-profit ecosystem. Understanding this framework is key to determining where to make effective investments in something billed as a "collaboration" enhancement.
Investing in collaboration IMHO poses two challenges. The first is how to incentivize collaboration with HR policy. The second is how to track collaboration's results. Solving those two challenges requires a knowledge management (KM) approach integrating two different families of enterprise-wide metrics. Incentivizing people to work together means deploying ERP modules that mine email traffic for expert references and plotting those experts' recorded interactions. Measuring results means scoring the products of group work by market share growth, costs saved, and other bottom-line KPIs. This gets complicated and KM people will have to speak the IT department's Cloudonomics language.
The ERP cost of monitoring collaboration is an investment. A Google search of "collaboration ROI" reveals plenty of expert thinking on how such an investment pays off. This Information Week article from 2011 discovered several studies of how collaboration tools impacted enterprise productivity. Cisco has developed a serious framework breaking down the ROI of collaboration, referencing Ron Ricci's and Carl Wiese's The Collaboration Imperative. Carl Wiese also authored Cisco's 2010 white paper, "The Return on Collaboration." It's all terrific theory, but frankly I've had some experience with one of Cisco's collaboration products called Cisco WebEx. Solving frequent video and audio disruptions would definitely enhance collaboration.
I do not enjoy collaborating with other humans. I usually have to decelerate my thinking cycle, speak more slowly, and use simpler concepts than I would if I were working alone. One major drawback to collaboration is its tendency to produce a suboptimal result when superior performers' work is averaged down to a lowest common denominator acceptable to all. Modern techniques in data analysis and knowledge management are supposed to alleviate this tendency. They may work best when a manager with high EI is in charge of getting the most out of people. Proving a collaboration ROI means connecting the dots between costs of systems deployed to track human interaction and the results of such group work in financial KPIs. Get to work, KM professionals. Your product managers need those collaborative tools.
The one point Mr. Levine made that jumped out at me was that organizations now hire people for their emotional intelligence (EI). I can only assume he had senior management positions in mind where skills in managing people matter more than technical competence. I am absolutely certain that EI does not matter at all in low skill, entry-level jobs like the ones I held before becoming self-employed. Some level of experience is still a primary requirement to obtain even the lowest position in a white collar professional career. No amount of EI can replace entry-level skill but EI doesn't matter when working with low skill idiots. I really liked Mr. Levine's advice on dealing with sociopaths: Get away from them.
Collaboration has tons of literature supporting different approaches throughout history. I am more immediately concerned with determining whether managers can measure collaboration's ROI. The Wikipedia articles I like to reference feed a non-profit collaborative platform. Macrowikinomics extends the original Wikinomics model into a for-profit ecosystem. Understanding this framework is key to determining where to make effective investments in something billed as a "collaboration" enhancement.
Investing in collaboration IMHO poses two challenges. The first is how to incentivize collaboration with HR policy. The second is how to track collaboration's results. Solving those two challenges requires a knowledge management (KM) approach integrating two different families of enterprise-wide metrics. Incentivizing people to work together means deploying ERP modules that mine email traffic for expert references and plotting those experts' recorded interactions. Measuring results means scoring the products of group work by market share growth, costs saved, and other bottom-line KPIs. This gets complicated and KM people will have to speak the IT department's Cloudonomics language.
The ERP cost of monitoring collaboration is an investment. A Google search of "collaboration ROI" reveals plenty of expert thinking on how such an investment pays off. This Information Week article from 2011 discovered several studies of how collaboration tools impacted enterprise productivity. Cisco has developed a serious framework breaking down the ROI of collaboration, referencing Ron Ricci's and Carl Wiese's The Collaboration Imperative. Carl Wiese also authored Cisco's 2010 white paper, "The Return on Collaboration." It's all terrific theory, but frankly I've had some experience with one of Cisco's collaboration products called Cisco WebEx. Solving frequent video and audio disruptions would definitely enhance collaboration.
I do not enjoy collaborating with other humans. I usually have to decelerate my thinking cycle, speak more slowly, and use simpler concepts than I would if I were working alone. One major drawback to collaboration is its tendency to produce a suboptimal result when superior performers' work is averaged down to a lowest common denominator acceptable to all. Modern techniques in data analysis and knowledge management are supposed to alleviate this tendency. They may work best when a manager with high EI is in charge of getting the most out of people. Proving a collaboration ROI means connecting the dots between costs of systems deployed to track human interaction and the results of such group work in financial KPIs. Get to work, KM professionals. Your product managers need those collaborative tools.
Saturday, July 05, 2014
The Trustworthiness Of BLS JOLTS Data
Understanding the US economy requires access to good data. It's temping to rely on the BLS Job Openings and Labor Turnover Survey (JOLTS) products. I am not one to give in to temptation. Analysts cannot merely assume that government data sets such as JOLTS are reliable.
I looked at the JOLTS ten-year data set for the quit rate. That's the percentage of people who voluntarily leave a job in a given month. The quit rate bottomed out in 2009 and has been climbing ever since. A climbing quit rate should be a sign of a healthy economy as employed people trade up to better jobs. The hires rate and turnover rate within JOLTS also track this trend. The caveat is that BLS uses seasonal adjustment factors for this data, and the effects of later adjustments are summarized in BLS's revision tables. The effects are typically small but they will matter in some sectors where employment forecasts matter. Retailers who hire seasonally should be very interested in whether BLS seasonal adjustment factors create positive feedback loops in their own business models.
Shadow Government Statistics has reconstructed the nation's unemployment rate without the government's birth-death assumptions and other adjustments. Using raw, unaltered numbers probably yields a more accurate understanding of the job market than using adjusted numbers. Government economists should be very concerned with keeping the trust of the business community. They can do so by jettisoning artificial adjustments from their statistical methodologies.
I looked at the JOLTS ten-year data set for the quit rate. That's the percentage of people who voluntarily leave a job in a given month. The quit rate bottomed out in 2009 and has been climbing ever since. A climbing quit rate should be a sign of a healthy economy as employed people trade up to better jobs. The hires rate and turnover rate within JOLTS also track this trend. The caveat is that BLS uses seasonal adjustment factors for this data, and the effects of later adjustments are summarized in BLS's revision tables. The effects are typically small but they will matter in some sectors where employment forecasts matter. Retailers who hire seasonally should be very interested in whether BLS seasonal adjustment factors create positive feedback loops in their own business models.
Shadow Government Statistics has reconstructed the nation's unemployment rate without the government's birth-death assumptions and other adjustments. Using raw, unaltered numbers probably yields a more accurate understanding of the job market than using adjusted numbers. Government economists should be very concerned with keeping the trust of the business community. They can do so by jettisoning artificial adjustments from their statistical methodologies.
Wednesday, May 28, 2014
10 Signs Your Coworkers Are Useless
I work by myself, for myself. I do this because the years I spent working with others in a corporate environment revealed to me the depths of human stupidity. Countless instances of thickheaded blunders made me roll my eyes in disgust. I'll boil down the general trends into ten signs that show you where the stupid burns.
1) Your coworkers don't understand the value of money. Financial service sector workers are egregiously bad at managing money. Maybe it's because they're around so much of it every day that they think it comes in an endless gravy train. I remember coworkers who spent money daily at the break room vending machine and the corner coffee shop. That's a five dollar daily habit that blows over a thousand bucks a year. I had another coworker who took a taxi to work every day. I take Muni whenever I go downtown in San Francisco. Her monthly transportation expenses were 20x larger than mine. I achieved financial independence; if you can't figure out why, stop reading right now. You're useless.
2) They worship process over results. This is the sine qua non of government bureaucracies and corporations in oligopolistic market positions, with rare exceptions. Winston Churchill begged us all to look at results sometimes but hardly anyone listens. Cubicle residents would rather wear down the same ruts in the carpet year after year than stop to consider a course correction. Process can be a very comfortable cocoon for the myopic in our species. Getting results often requires making someone uncomfortable.
3) They have no career goals. I remember one gal at "Baloney Goofball Imbeciles" (a major investment management firm, renamed) who took maybe twenty minutes a day to do her job. She spent the rest of the time socializing. Coworkers admired her for being on some kind of "fast track" because she was rotating laterally between easy jobs that paid little and had light workloads. Consider just how lame everyone there must have been if she was their role model.
4) They earn little money. Like it or not, money is a measuring stick of a human's contributions to society. Life isn't fair and sometimes the most ignorant rock stars become multimillionaires. Tough stuff. The rest of us have to prove our abilities in a daily grind. Those who can bust their humps get paid. Those who expand their skills get paid more. People who show little interest in either of those projects will be at subsistence level indefinitely.
5) They save little money. This relates to #4 above. Low-income earners can build wealth through diligent saving and frugal living. High-income earners have an easier time building wealth but even they throw away money on frivolities. I currently know several high earners in San Francisco's social circles who live like there's no tomorrow. If they find themselves suddenly unemployed, they won't have a tomorrow. My former bosses at "Baloney Goofball Imbeciles" would brag - yes, BRAG - about their own empty savings accounts. I stopped listening to them when they encouraged me to spend all of my paycheck just to fit in with the work group. Those idiots had nothing left to teach me.
6) They are ignorant of the world. Intellectual activity brings personal growth. This is a no-brainer for autodidacts like Yours Truly but most people have no brains. Cubicle denizens would rather fill their spare time with rom-com movies instead of independent films, pro sports instead of performing arts, and fashion magazines instead of intellectual journals.
7) They don't know how to operate common work systems. I worked with senior wealth managers at "You and BS" who did not understand how to use the firm's automated tools to construct portfolios, retrieve analytical reports, or create pitch books. Senior supervisors at "Baloney Goofball Imbeciles" with years of experience did not know how to dig into their reporting systems for audit records. I figured all of these things out within weeks of my hiring date. Sticking out like a sore thumb helped get me fired from entry-level jobs. I can't relate to so-called "professionals" who refuse to master the tools of their chosen profession.
8) They waste time. During my first week at "Baloney Goofball Imbeciles" my supervisors took off in the middle of the work day for a three-hour shopping trip. I was left to wonder how these people could say they earned their pay. Other brokers at "You and BS" would pretend to work by eyeballing their wealthy family's money and then take off to go drinking in the early afternoon. Time-wasting losers may think they have earned sloth status with past performance. The only thing they really earn is contempt.
9) They are just plain dumb. There is nothing snobby at all about judging people at least partly on IQ scores and other objective measures of intellect. Smart people are job creators in a knowledge economy. Dumb people are a drag on productivity. Anti-intellectual coworkers belong in low-income occupations at the bottom of society yet somehow they work their way into cubicles and corner offices. Cleaning up their messes, editing their typos, and covering their errors is for masochistic suckers.
10) They lack personal integrity. I thought about listing this first but decided to leave the best for last. Losers can find excuses for lying and cutting corners. Karma eventually catches up to destructive people. Trying to change a sociopath is always a waste of effort. I put as much distance as possible between myself and liars once someone reveals their first instance of lying.
If you work with people who regularly exhibit these behaviors, it's time to find some new coworkers. If everyone in the company acts this way, the stock may be a good short candidate. There's always a better job somewhere else. If the world runs out of better jobs, there's always self-employment. Life is too short to spend even one working day with useless excuses for human beings.
1) Your coworkers don't understand the value of money. Financial service sector workers are egregiously bad at managing money. Maybe it's because they're around so much of it every day that they think it comes in an endless gravy train. I remember coworkers who spent money daily at the break room vending machine and the corner coffee shop. That's a five dollar daily habit that blows over a thousand bucks a year. I had another coworker who took a taxi to work every day. I take Muni whenever I go downtown in San Francisco. Her monthly transportation expenses were 20x larger than mine. I achieved financial independence; if you can't figure out why, stop reading right now. You're useless.
2) They worship process over results. This is the sine qua non of government bureaucracies and corporations in oligopolistic market positions, with rare exceptions. Winston Churchill begged us all to look at results sometimes but hardly anyone listens. Cubicle residents would rather wear down the same ruts in the carpet year after year than stop to consider a course correction. Process can be a very comfortable cocoon for the myopic in our species. Getting results often requires making someone uncomfortable.
3) They have no career goals. I remember one gal at "Baloney Goofball Imbeciles" (a major investment management firm, renamed) who took maybe twenty minutes a day to do her job. She spent the rest of the time socializing. Coworkers admired her for being on some kind of "fast track" because she was rotating laterally between easy jobs that paid little and had light workloads. Consider just how lame everyone there must have been if she was their role model.
4) They earn little money. Like it or not, money is a measuring stick of a human's contributions to society. Life isn't fair and sometimes the most ignorant rock stars become multimillionaires. Tough stuff. The rest of us have to prove our abilities in a daily grind. Those who can bust their humps get paid. Those who expand their skills get paid more. People who show little interest in either of those projects will be at subsistence level indefinitely.
5) They save little money. This relates to #4 above. Low-income earners can build wealth through diligent saving and frugal living. High-income earners have an easier time building wealth but even they throw away money on frivolities. I currently know several high earners in San Francisco's social circles who live like there's no tomorrow. If they find themselves suddenly unemployed, they won't have a tomorrow. My former bosses at "Baloney Goofball Imbeciles" would brag - yes, BRAG - about their own empty savings accounts. I stopped listening to them when they encouraged me to spend all of my paycheck just to fit in with the work group. Those idiots had nothing left to teach me.
6) They are ignorant of the world. Intellectual activity brings personal growth. This is a no-brainer for autodidacts like Yours Truly but most people have no brains. Cubicle denizens would rather fill their spare time with rom-com movies instead of independent films, pro sports instead of performing arts, and fashion magazines instead of intellectual journals.
7) They don't know how to operate common work systems. I worked with senior wealth managers at "You and BS" who did not understand how to use the firm's automated tools to construct portfolios, retrieve analytical reports, or create pitch books. Senior supervisors at "Baloney Goofball Imbeciles" with years of experience did not know how to dig into their reporting systems for audit records. I figured all of these things out within weeks of my hiring date. Sticking out like a sore thumb helped get me fired from entry-level jobs. I can't relate to so-called "professionals" who refuse to master the tools of their chosen profession.
8) They waste time. During my first week at "Baloney Goofball Imbeciles" my supervisors took off in the middle of the work day for a three-hour shopping trip. I was left to wonder how these people could say they earned their pay. Other brokers at "You and BS" would pretend to work by eyeballing their wealthy family's money and then take off to go drinking in the early afternoon. Time-wasting losers may think they have earned sloth status with past performance. The only thing they really earn is contempt.
9) They are just plain dumb. There is nothing snobby at all about judging people at least partly on IQ scores and other objective measures of intellect. Smart people are job creators in a knowledge economy. Dumb people are a drag on productivity. Anti-intellectual coworkers belong in low-income occupations at the bottom of society yet somehow they work their way into cubicles and corner offices. Cleaning up their messes, editing their typos, and covering their errors is for masochistic suckers.
10) They lack personal integrity. I thought about listing this first but decided to leave the best for last. Losers can find excuses for lying and cutting corners. Karma eventually catches up to destructive people. Trying to change a sociopath is always a waste of effort. I put as much distance as possible between myself and liars once someone reveals their first instance of lying.
If you work with people who regularly exhibit these behaviors, it's time to find some new coworkers. If everyone in the company acts this way, the stock may be a good short candidate. There's always a better job somewhere else. If the world runs out of better jobs, there's always self-employment. Life is too short to spend even one working day with useless excuses for human beings.
Wednesday, May 14, 2014
Monday, February 10, 2014
Financial Sarcasm Roundup for 02/10/14
It's time once again for sarcasm but I think I'll leave out the LOLcats. Putting those images together is a lot of work and it may not be worth my time if it prevents me from writing more articles. I may revisit the concept in the future.
Here comes another empty threat of a US Treasury default. We've all heard this alarmism before. A default isn't going to happen as long as the US can roll its short term debt to pay interest, and it can do so as long as the Fed is buying Treasuries. The only threat to this dysfunctional status quo is a spike in real interest rates that crashes the assets on the Fed's balance sheet. Lawmakers' decreased willingness to risk brinksmanship reveal the precariousness of this untenable situation.
The PBOC is telling us to get used to volatility in the yuan money market interest rate. Really? Gee, ya don't say. My last few sarcasm roundups have dealt with the likelihood that the PBOC is losing control of China's own yield curve. The first possible WMP default deadline came and went without incident, but future problems are unavoidable. This is a preview of what will happen in the US when our own central bank is unable to contain interest rates.
Wages are not moving up, and neither is hiring. The macroeconomic reason is simple but largely unreported. Real unemployment is much higher than the official BLS figure. This slack labor market is known to hiring managers who receive thousands of resumes for a handful of job vacancies. High-income earners are doing just fine while health care mandates are about to hollow out middle class employment. Everyone below the top 1% should prepare to get a lot poorer.
The SEC is cracking down on financial advisers who make bold claims in social media. I'm not an adviser, so any claims I make at Alfidi Capital about my tremendous genius or charisma fall outside the SEC's jurisdiction. I do not guarantee or promise anything at all, although I try my very best to ridicule stupidity. I do not sell any products or do anything for clients. Advisers who claim they can guarantee any investment result deserve scrutiny, and a lot of advisers don't deserve to be in business at all.
If you miss the LOLcats, I don't ever want to hear about it.
Here comes another empty threat of a US Treasury default. We've all heard this alarmism before. A default isn't going to happen as long as the US can roll its short term debt to pay interest, and it can do so as long as the Fed is buying Treasuries. The only threat to this dysfunctional status quo is a spike in real interest rates that crashes the assets on the Fed's balance sheet. Lawmakers' decreased willingness to risk brinksmanship reveal the precariousness of this untenable situation.
The PBOC is telling us to get used to volatility in the yuan money market interest rate. Really? Gee, ya don't say. My last few sarcasm roundups have dealt with the likelihood that the PBOC is losing control of China's own yield curve. The first possible WMP default deadline came and went without incident, but future problems are unavoidable. This is a preview of what will happen in the US when our own central bank is unable to contain interest rates.
Wages are not moving up, and neither is hiring. The macroeconomic reason is simple but largely unreported. Real unemployment is much higher than the official BLS figure. This slack labor market is known to hiring managers who receive thousands of resumes for a handful of job vacancies. High-income earners are doing just fine while health care mandates are about to hollow out middle class employment. Everyone below the top 1% should prepare to get a lot poorer.
The SEC is cracking down on financial advisers who make bold claims in social media. I'm not an adviser, so any claims I make at Alfidi Capital about my tremendous genius or charisma fall outside the SEC's jurisdiction. I do not guarantee or promise anything at all, although I try my very best to ridicule stupidity. I do not sell any products or do anything for clients. Advisers who claim they can guarantee any investment result deserve scrutiny, and a lot of advisers don't deserve to be in business at all.
If you miss the LOLcats, I don't ever want to hear about it.
Wednesday, January 08, 2014
Sociopaths Need Careers Too
I work for myself because I prefer not to work with other humans. I consider fellow members of my species to be scientific curiosities prone to random bouts of egotistical violence and subterfuge. I tried to help some of these unfortunates change their ways with no success. A large number of people are simply hard-wired for sociopathy. They can't help the way they are.
The US Army is taking its first steps toward identifying and removing toxic leaders. I think this process will take an entire generation, based on my personal experience with toxic leaders and the culture of the Army. Find the archived edition of the US Army Combined Arms center's magazine Military Review from May/June 1999. Read the article "Natural Killers: Turning The Tide of Battle" (republished here on another site) to see how sociopaths, when properly controlled, play a useful role in the military. Complicating this process is the ability of high-functioning sociopaths to "go to the dark side" and adopt the appearance of possessing emotional intelligence. This masquerade enables them to continue manipulating people and damaging organizations. Other large employers face the problem posed by a high number of high-functioning sociopaths. Wall Street stands out in particular for its sociopaths in high places and the damage they cause by deceiving clients, trading partners, and regulators. Sociopaths crave power.
I am humane and generous, much more so than our unfortunate sociopaths. These people are still human and thus entitled to life, liberty, the pursuit of happiness, and all that jazz. The trouble comes when they are left to their own devices and pursue careers that naturally lend to hierarchy, acquisition, and the control of other humans. Salespeople, for example, lie every time they open their mouths and the most skilled ones become sales managers who train other liars to lie just as well. The potential damage sociopaths cause must rule them out of many occupations whose status enables and magnifies their destructive behavior.
I have a decent solution to the social problem of employing sociopaths. Corporations and government bureaucracies should screen their entry-level hires for sociopathic traits before these people have a chance to climb the ladder to positions of higher authority. Scientific verification of sociopathic tendencies will thus serve as an automatic disqualifier for promotion past the entry level. In an ideal world, sociopaths will be confined largely to low-skill jobs regardless of what their high-functioning intellectual skills may otherwise warrant. It's hard to manipulate others when primary job tasks involve lifting boxes, driving a truck, or running computer scripts. Of course, the most creative among them may still gravitate to positions of influence through entrepreneurial efforts in business and politics. I have no solution at present for that possibility. A free society must maintain multiple paths to upward mobility.
Corporations and government agencies will not adopt any sociopathic HR screens of their own accord unless they are faced with systemic dysfunction that calls into question their basic mission. The US Army currently faces such critical fallout from soldier suicides and sexual assaults that it has no choice but to examine the role sociopathic leaders play as a contributing factor. I believe activist institutional investors can play a role by pressuring publicly traded corporations to adopt sociopathic HR screens. It may fall under a corporate social responsibility rubric. It is certainly the right thing to do.
The US Army is taking its first steps toward identifying and removing toxic leaders. I think this process will take an entire generation, based on my personal experience with toxic leaders and the culture of the Army. Find the archived edition of the US Army Combined Arms center's magazine Military Review from May/June 1999. Read the article "Natural Killers: Turning The Tide of Battle" (republished here on another site) to see how sociopaths, when properly controlled, play a useful role in the military. Complicating this process is the ability of high-functioning sociopaths to "go to the dark side" and adopt the appearance of possessing emotional intelligence. This masquerade enables them to continue manipulating people and damaging organizations. Other large employers face the problem posed by a high number of high-functioning sociopaths. Wall Street stands out in particular for its sociopaths in high places and the damage they cause by deceiving clients, trading partners, and regulators. Sociopaths crave power.
I am humane and generous, much more so than our unfortunate sociopaths. These people are still human and thus entitled to life, liberty, the pursuit of happiness, and all that jazz. The trouble comes when they are left to their own devices and pursue careers that naturally lend to hierarchy, acquisition, and the control of other humans. Salespeople, for example, lie every time they open their mouths and the most skilled ones become sales managers who train other liars to lie just as well. The potential damage sociopaths cause must rule them out of many occupations whose status enables and magnifies their destructive behavior.
I have a decent solution to the social problem of employing sociopaths. Corporations and government bureaucracies should screen their entry-level hires for sociopathic traits before these people have a chance to climb the ladder to positions of higher authority. Scientific verification of sociopathic tendencies will thus serve as an automatic disqualifier for promotion past the entry level. In an ideal world, sociopaths will be confined largely to low-skill jobs regardless of what their high-functioning intellectual skills may otherwise warrant. It's hard to manipulate others when primary job tasks involve lifting boxes, driving a truck, or running computer scripts. Of course, the most creative among them may still gravitate to positions of influence through entrepreneurial efforts in business and politics. I have no solution at present for that possibility. A free society must maintain multiple paths to upward mobility.
Corporations and government agencies will not adopt any sociopathic HR screens of their own accord unless they are faced with systemic dysfunction that calls into question their basic mission. The US Army currently faces such critical fallout from soldier suicides and sexual assaults that it has no choice but to examine the role sociopathic leaders play as a contributing factor. I believe activist institutional investors can play a role by pressuring publicly traded corporations to adopt sociopathic HR screens. It may fall under a corporate social responsibility rubric. It is certainly the right thing to do.
Monday, July 08, 2013
Financial Sarcasm Roundup for 07/08/13
I've got a busy week ahead with attendance at SEMICON West / Intersolar in San Francisco taking up much of my time. There is still time enough for sarcasm.
The US-EU trade talks are proceeding on schedule. I predicted last week in my previous Financial Sarcasm Roundup that the eavesdropping revelations would not derail these talks. Free trade deals are too important to political elites and their business elite patrons to let an unflattering news item get in the way. Besides, elites love excuses to hob-nob, get their photos taken for PR campaigns, and eat fancy chow like caviar. Trade negotiations are the perfect venues for such fun.
Thomson-Reuters had to learn the hard way that pre-releasing survey data to premium customers is wrong. This is the moral equivalent of front-running in brokerage, which is clearly forbidden because it gives inside parties an unfair advantage. I laugh at the stupidity of hedge fund managers who build algorithms primed to jump at a two-second release.
Temp jobs are booming in the US. I've been telling people for years, on my blog and in person, that assembling a portfolio of income streams from multiple projects is more resilient than staking your entire professional reputation on a single capricious employer. Americans who don't read my blog are going to learn this the hard way once they lose their full-time jobs.
Big investors in Asia and Europe still say they're not backing away from US Treasuries. They're dumber than ever. Money managers outside the US must be sweating bullets when they watch the value of what's on their books. Any panic selling of bonds will spike real interest rates here in the US. We've only seen small jumps in interest rates so far thanks to the Fed's meaningless platitudes on the non-end of QE.
If any of you wonderful genius readers want to link up with me during the SEMICON West / Intersolar conference at Moscone Center, I'm easy to find. Just wait around the trade booths that have free booze and hot chicks. If you're a hot chick yourself, email me and ask to hang out with me during the conference. Attach a full-length photo so I don't waste my time. You'll have to adhere to my schedule because there are lots of places I need to visit. Ladies, here's your chance to be arm candy for Yours Truly and impress the locals. Don't miss out.
The US-EU trade talks are proceeding on schedule. I predicted last week in my previous Financial Sarcasm Roundup that the eavesdropping revelations would not derail these talks. Free trade deals are too important to political elites and their business elite patrons to let an unflattering news item get in the way. Besides, elites love excuses to hob-nob, get their photos taken for PR campaigns, and eat fancy chow like caviar. Trade negotiations are the perfect venues for such fun.
Thomson-Reuters had to learn the hard way that pre-releasing survey data to premium customers is wrong. This is the moral equivalent of front-running in brokerage, which is clearly forbidden because it gives inside parties an unfair advantage. I laugh at the stupidity of hedge fund managers who build algorithms primed to jump at a two-second release.
Temp jobs are booming in the US. I've been telling people for years, on my blog and in person, that assembling a portfolio of income streams from multiple projects is more resilient than staking your entire professional reputation on a single capricious employer. Americans who don't read my blog are going to learn this the hard way once they lose their full-time jobs.
Big investors in Asia and Europe still say they're not backing away from US Treasuries. They're dumber than ever. Money managers outside the US must be sweating bullets when they watch the value of what's on their books. Any panic selling of bonds will spike real interest rates here in the US. We've only seen small jumps in interest rates so far thanks to the Fed's meaningless platitudes on the non-end of QE.
If any of you wonderful genius readers want to link up with me during the SEMICON West / Intersolar conference at Moscone Center, I'm easy to find. Just wait around the trade booths that have free booze and hot chicks. If you're a hot chick yourself, email me and ask to hang out with me during the conference. Attach a full-length photo so I don't waste my time. You'll have to adhere to my schedule because there are lots of places I need to visit. Ladies, here's your chance to be arm candy for Yours Truly and impress the locals. Don't miss out.
Sunday, February 24, 2013
Fed Inflates Auto and Housing Double Bubble
You've got to be kidding me, Bloomberg, if you think the Fed's ZIRP is a job stimulus. The Federal Reserve's record low interest rates encourage reckless borrowing but you wouldn't know it from reading conventional media. I look past cursory forecasts of job creation in the automobile and housing sectors.
Read the Federal Reserve's G.19 series data on consumer credit. Pay particular attention to note #6 on new car loan data:
Even if you ignore the Fed's own admission that its data on automobile loans is worthless for analysis, you can see from previous years' data that new car loans peaked in 2009 and have declined since then. Any surge in loans since then is statistically questionable. Auto sector executives who base their hiring forecasts on hope for loan growth are asking for trouble.
Purported growth in home mortgage lending is also questionable. Read the Federal Reserve's Mortgage Debt Outstanding data; I selected December 2012, the most recent month available as of this writing. Outstanding mortgages have been declining for "all holders" and "one- to four-family residences," the main categories that matter for homebuilders who want to forecast demand for new developments.
I ignore happy talk touting job growth from new bubbles. I strongly suspect that whatever growth in demand automakers report is the result of subprime lending that pulls forward their future quarters' sales at unsustainably low financing costs. I do web searches of phrases like "all cash buyers" for housing demand and get a similar feeling. Home loan demand is collapsing across sectors for many reasons. Banks have tightened credit standards and cash buyers are looking to flip properties rather than build equity. These are not real sources of future job growth in two of the economy's biggest sectors.
The Fed's desperate ZIRP has not spurred overall lending but what little activity it does encourage is unhealthy. Things look like 2007 all over again.
Read the Federal Reserve's G.19 series data on consumer credit. Pay particular attention to note #6 on new car loan data:
6.The statistical foundation for these series has deteriorated. Therefore, publication of these series is temporarily being suspended. The statistical foundation is in the process of being improved, and publication will resume as soon as possible.
Even if you ignore the Fed's own admission that its data on automobile loans is worthless for analysis, you can see from previous years' data that new car loans peaked in 2009 and have declined since then. Any surge in loans since then is statistically questionable. Auto sector executives who base their hiring forecasts on hope for loan growth are asking for trouble.
Purported growth in home mortgage lending is also questionable. Read the Federal Reserve's Mortgage Debt Outstanding data; I selected December 2012, the most recent month available as of this writing. Outstanding mortgages have been declining for "all holders" and "one- to four-family residences," the main categories that matter for homebuilders who want to forecast demand for new developments.
I ignore happy talk touting job growth from new bubbles. I strongly suspect that whatever growth in demand automakers report is the result of subprime lending that pulls forward their future quarters' sales at unsustainably low financing costs. I do web searches of phrases like "all cash buyers" for housing demand and get a similar feeling. Home loan demand is collapsing across sectors for many reasons. Banks have tightened credit standards and cash buyers are looking to flip properties rather than build equity. These are not real sources of future job growth in two of the economy's biggest sectors.
The Fed's desperate ZIRP has not spurred overall lending but what little activity it does encourage is unhealthy. Things look like 2007 all over again.
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