Monday, October 13, 2008

Babbling to Start Off the Week

Well here it is another Monday (for you) and as I sit here Sunday evening trying to think of what to write, a bunch of random thoughts drift in my brain, finding their way to one side of my brain where they softly bounce and float around lazily until they bounce off some other part of my brain. I am grasping for ideas. As my fingers warm up, so do these thoughts, like heated molecules. Before they begin to do damage, I had better begin to write them down.

First of all, Julie keeps telling me that we are going to have an earthquake. Why? Because the dogs next door have been barking all day and our house keeps getting invaded by ants. Plus, it has been "earthquake weather."

I told her that the reason for the barking is because there is a guest dog (hopefully not a new dog) that keeps barking and whining and gets the old dog all excited. As for if there is going to be an earthquake, the only thing for certain is that either there will be one or there won't.

She even went so far as to say that in a bunch of e-mails some of us choir members were sending back and forth regarding an upcoming core group meeting. Glenn (the same one from yesterday's entry) made an astute observation: why are we spending so much money on research to predict earthquakes if all we need to do is go to the pound and pick up a dog? Now, being that he was the valedictorian in his day at USC, I think we should give serious consideration to what he said.

Next, the weekend Wall Street Journal had an article comparing and contrasting the current stock market nosedive to the great crash in 1929, and offered some thoughts as to the implications and conclusions we might draw. He cited a paper written by Benjamin Graham, one of the all-time most famous stock market experts (he was Warren Buffet's mentor) in which Graham stated in 1932 that one out of every 12 companies on the New York Stock Exchange was worth more dead than alive. That is, if they were to be liquidated, the value of their cash and marketable securities was worth more than the value of their stocks.

What Graham failed to take into account, however, was the bleeding dry of that cash and securities by the lawyers who would handle the liquidation, as well as the extravagant termination packages of the executives, after which all these companies would literally be bankrupt. In fairness to Graham, perhaps that kind of situation didn't exist in his day. But it sure does today. Once these two groups get through with anything, there is not one morsel of meat remaining on the bone.

Personally, I attribute much of the downward slide in the market to psychological factors, not just the bank failures. People tend to have a herd mentality and when everyone out there is pessimistic, no one wants to go against the tide. That may be because the individual's thinking is influenced by the herd, or it may be that the individual actually thinks the opposite but it is either safer or less embarrassing to go with the herd rather than against it. There is safety in numbers.

Any lemming will tell you that.

People seem reluctant to be the first of anything. For example, at my church we have a time of communion every first Sunday of the month. The wafers and the juice are on tables at the front of the sanctuary and when they are ready for partaking, it always takes a few moments before anyone ventures up. But once the first few head up the aisle, everyone else pours into line.

Or traffic. One line or one lane seems to be a lot lighter than the others but people hesitate to get in it as though there is a catch to it. But once a pioneer takes the leap, everyone else jumps on the bandwagon.

I think it is human nature to wait and see, rather than to be the early adopter or pioneer. Maybe that's part of how we are wired for survival? Anyway, I feel that holds true in the stock market. Once a few brave souls begin buying, rather than selling, the momentum will pick up and the tide will turn; this has not so much to do with the underlying value of the stocks but more to do with psychology. There's a bunch of bargains to be had out there right now, but no one wants to make the first move because, as I said, there is safety in numbers. Problem is, once those herds and their big numbers make their moves, the prices have already gone up and the bargains are no longer bargains.

I think my boss delights in all of this because he is able to tell me that he told me so, that this is what he has been saying for years was going to happen, and this time the whole economy is going down in flames.

Thing is, this is about the fifth or sixth time he has said that to me in the 16 years I have been there. I reminded him of that fact but he brushed it off, saying this time it is the big one and the others weren't, haha.

His solution? In his global perspective, it is communism/socialism. He has told me that in a true communist society, everyone will work for the benefit of the people and there will be enough of everything you need so that no one will have to fight for it. For example, you want a color tv? You just go and pick one up. Once people realize that it is there for the taking, that you don't need money to buy one, that there are no strings attached, then they will take only what they need. Same with cars, food, computers, you name it. When people understand there is no scarcity, there will be no compulsion to take more than what is needed.

Yeah, right. In a communist country, pigs fly (while the proletariat walks) and moons are blue for a month of Sundays. In real life, no matter what, if something is free then people will just take and take until there is no more. Even if they don't need it, they will still take it because it is free. My boss and I differ in our views of human nature.

My boss says people are intrinsically good. His contention: if there were a primitive, undiscovered tribe say, in Africa, that was uncorrupted by contact with modern man, they would develop as a completely altruistic society that operated on socialistic principles. As long as they remained isolated from modern society, they would continue to remain altruistic.

My question is, we all started out as primitive societies. So if mankind is intrinsically good, how did we wind up the way we are?

With that, my brain is drained and so, probably, are you. I was wondering what to write and as usual, got carried away. My YouTube video for the day is also of a rambling nature. I really don't know what he is trying to say to us but it comes from one of my favorite albums.

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