In severe economic times, people cope with the associated stress in many ways. It’s been reported that during the Great Depression of the 1930’s – a time without TV – movie theatres played host to large audiences. So did taverns.
Although the Bridgewater area may not have been hit as hard as other parts of the country where mind-numbing pools of layoffs have plagued the manufacturing sector, it’s still bad enough. Financial institutions in New Jersey and New York are laying off tons of workers.
If messages emanating from the White House are to be taken seriously, “...it’s going to get worse before it gets better.” As if it takes a President to remind us of what we already know!
My own anecdotal observation of how some people are coping in this anemic economic climate is simple: People just want to get away from it. One method is to soothe ourselves as best we can. In Bridgewater, a Sunday afternoon trip to the Bridgewater Commons Mall seems to confirm that.
On an off-season Sunday shopping day, the most crowded spot was the third level of the newly-renovated food court. Every concession was taking orders and dishing out the eats, as patrons waited their turn in long lines.
Down below, at ground level near the atrium, each of the four stations of the Massage Mob concession was taken: Customers were getting the stress kneaded out of their muscles.
Next: chocolate. It seems that people also resort to that luscious confection in times like these. Did you know that Hershey’s has increased its sales and profits for both the fourth quarter and full year of 2008?
The company is also projecting a modest sales increase for 2009. Gone are the 99¢ promotions for a 4.25 ounce bar of Hershey’s Dark Chocolate at CVS. It’s now selling for a steady $1.99. Please, CVS, make a liar out of me.
Showing posts with label Recession. Show all posts
Showing posts with label Recession. Show all posts
Sunday, March 1, 2009
Saturday, October 25, 2008
Too Smart for Their Own Britches
On October 23, 2008, former Fed Chief Alan Greenspan appeared before the House Committee on Oversight and Government Reform to testify about the recent credit freeze caused by the sub-prime mortgage mess. He read from a prepared text and then took what were mainly softball questions from committee members.
I pored over every word contained in Greenspan’s written testimony before that committee. I also listened carefully to Greenspan’s response to questions from the House panel. This is a man of great intelligence who simply cannot sit before other people and express in common language what he did and why he did it.
Greenspan was a key factor in causing the credit markets to fall apart. He kept interest rates too low, too long, and refused to introduce regulatory measures that might have kept the house of cards from crumbling. His written testimony was more like an excuse than an explanation. I won’t bore you with all of the 50-cent words that he used as a shield.
Greenspan’s basic and most absurdly memorable explanation for the sub-prime fiasco was to state its cause as originating from, “A flaw in the model that I perceived is the critical functioning structure that defines how the world works.” Huh! Is he kidding? Please read that quote again. With a straight face, Greenspan told everyone within earshot not only that there is a complex mathematical computer model that defines how the world goes ‘round & ‘round, but that the model is a financial one. How overly simplistic!
It appears that while he was Fed Chairman, Greenspan placed great faith in economic models. Although he did not specify in his testimony the one to which he referred, there are several candidates. One is known by its abbreviation, CAPM (The Capital Asset Pricing Model). Another is the Black–Scholes model. Developers of both received Nobel Prizes for their work.
Greenspan defended the use of computerized risk management models which became the backbone for the trading of mortgage-backed securities. Heck, he testified, there was nothing wrong with them; it’s just that people didn’t feed in the right data.
So many smart people, so little wisdom. Have I said that before?
I pored over every word contained in Greenspan’s written testimony before that committee. I also listened carefully to Greenspan’s response to questions from the House panel. This is a man of great intelligence who simply cannot sit before other people and express in common language what he did and why he did it.
Greenspan was a key factor in causing the credit markets to fall apart. He kept interest rates too low, too long, and refused to introduce regulatory measures that might have kept the house of cards from crumbling. His written testimony was more like an excuse than an explanation. I won’t bore you with all of the 50-cent words that he used as a shield.
Greenspan’s basic and most absurdly memorable explanation for the sub-prime fiasco was to state its cause as originating from, “A flaw in the model that I perceived is the critical functioning structure that defines how the world works.” Huh! Is he kidding? Please read that quote again. With a straight face, Greenspan told everyone within earshot not only that there is a complex mathematical computer model that defines how the world goes ‘round & ‘round, but that the model is a financial one. How overly simplistic!
It appears that while he was Fed Chairman, Greenspan placed great faith in economic models. Although he did not specify in his testimony the one to which he referred, there are several candidates. One is known by its abbreviation, CAPM (The Capital Asset Pricing Model). Another is the Black–Scholes model. Developers of both received Nobel Prizes for their work.
Greenspan defended the use of computerized risk management models which became the backbone for the trading of mortgage-backed securities. Heck, he testified, there was nothing wrong with them; it’s just that people didn’t feed in the right data.
So many smart people, so little wisdom. Have I said that before?
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