Mark Byron

The CTRL-ALT-DEL Economy?

Here's an interesting statement from Microsoft boss Steve Ballmer that has had my mind reeling a bit since I heard it Tuesday from, of all places, ESPN talker Collin Cowherd.

"I don't think we are in a recession, I think we have reset," he said. "A recession implies recovery [to pre-recession levels] and for planning purposes I don't think we will. We have reset and won't rebound and re-grow."

Ballmer may well be right; I was kicking this idea around with my Portfolio Analysis class last night, and it seems to make sense. Our financial system has got the jitters if not the DTs, used to using easy credit and free-wheeling derivatives and is now having to function without those financial greenies. The auto industry is undergoing an overhaul, as both Chrysler and GM go through government-shepherded Chapter 11s.

If we look to Washington, we shouldn't see too much help on the fiscal policy front. The massive stimulus package didn't do the trick and the Obama team is likely to move towards higher taxes in order to pay down the budget deficit; that might be good for long-term financial stability, but it won't be overly good for GDP growth

That's doubly true when you couple that with reforms that are likely to come out of Washington. Financial reform will likely lead to more expensive capital and more expensive credit for small businesses, as increased capital requirements for banks will likely lead to higher interest rates on bank loans; if banks need to have more equity on hand, they'll need to have a higher return on assets to offset the reduced leverage. Also, any unfunded mandates for health insurance put on businesses will lower profitability and economic growth.

So, Wall Street is looking for the Betty Ford Clinic (as one student put it last night) and Washington is doing stuff that, while helpful for the little guy, will slow the economy to a crawl.

That is, unless innovation paves the way for growth despite those downsides. Computers seem to have maxed out on their productivity-producing, but every time we think we've seen everything, we get a new ap that changes the game some more; Facebook and Twitter are two areas that have changed things as of late.

Nanotech seems to be just around the corner, but I'm not sure if the pure research we've seen to date is going to turn into real products anytime soon; if it does, it could offset the contractionary nature of our current situation much as improved logistics, the birth of the Web and other computer-generated productivity in the 1990 helped offset the Clinton tax increases and saw a growing economy despite higher taxes.

We may be in for a rather stagnant economy, where the 3% growth that we're used to might not be there until either the next big tech item comes along to boost the economy or our system digests all the financial and regulatory changes coming down the pike.

That's not all that encouraging, but that what we seem to be looking at for the near term.

The Great Adventure

Here's an interesting piece of sports news; top Cuban pitcher Aroldis Chapman defected during a tournament in Holland. He only pitched so-so for Cuba during the World Baseball Classic, but's he only 21 (although ages in Latin players can be fudged either up or down) and has a 100MPH fastball, which has pro scouts drooling.

My question; how did a Cuban guy get the surname Chapman? This baseball reference piece notes his mom's name is de la Cruz, so at least madre has a Hispanic sounding name, but padre is a puzzle.

Fractured Sports Tales

"Thumb Injury Forces Creamer out of Jamie Farr." That has to be messy, hacking up stuff all over the table. My questions is how the coffee stayed down and the creamer came up. Maybe Klinger likes to drink creamer straight.

"Sources: Mavs, Knicks ready offers for Kidd." I'm having Blues Brothers flashbacks-"How much for ze women? How much for just ze kid?"

Higher American Decadence

One old bon mot that I've repeated for decades is "the height of American decadence is diet dog food"; not only are we fat, we wind up getting our pets fat too. Other pet-pampering products can wind up on that list, as entrepreneurs have discovered novel ways to pamper pooches and coddle cats.

However, I think I found the near zenith of luxury treatment; a "canine calling card" removal joint here in Lexington called What's the Scoop whose van I was stopped behind while commuting the other day? Their FAQ page steals most of the good one-liners from you, including "It's a CRAPPY job BUT someone has to do it" (caps in original) and "we're #1 in the #2 business". I have someone from my circle of friends in Midland who does dog walking for a living, but this is the first time I've seen this waste-removal service done.

Would you pay $10/week to have someone clear your yard of "steaming piles" (as we used to call bad essays in the fisking era)? Their van had a cute dog with a literal steaming pile (with the curly lines rising from the piles to indicate steam) of you-know-what behind him. That seems to be a bit of a decadent expenditure, but affordable enough where you'd at least think about taking them up on it.

Whoever owned the van had a servant's heart on multiple levels; the rear license-plate bracket had an evangelical message, something like "Heaven is free; Jesus paid for you." Washing feet and cleaning crap out of people's back yards isn't a bad matched set.

American free markets at work. Would a planned economy plan for such a service? Probably not.

¿Nuevo Sheed?

Interesting news out of Pistonland. First, they've fired Michael Curry earlier in the week, and have now come to terms with both Ben Gordon and Charlie Villanueva. Villanueva is essentially a young Rasheed Wallace without the temper, a mobile 6'10" power forward that can knock down three pointers at a 34% clip; he's had a total of nine technicals in his four year career, which is about a half-year's quota for Sheed. He's not quite the shot blocker Sheed is, but he can fit into Sheed's slot in the rotation.

Interestingly, Villanueva's a UConn grad, so he can talk Storrs talk with Rip Hamilton... if Rip is still around by the time training camp starts. Villanueva takes up Sheed's part of both the roster and salary cap, while Gordon takes up Allan Iverson's part of the roster and cap, which means you have a log jam at the 2. You don't spend bongo bucks on a backup, so Rip either becomes a super-sub or gets traded.

Unlike Iverson, who can play either guard position, albeit with a size disadvantage as a 2, Gordon is more of a pure 2 who won't coexist with Hamilton on the court unless it is a smallball set where Rip is playing the 3. Curry tried that for a time after the Iverson trade, but playing Rip at the 3 and Tayshaun Prince at the 4 made the Pistons too small.

Look for Detroit to trade Rip for a center or center-capable power forward.

It's opening week of Summer term and I have a screwy schedule, so expect me to get back to blogging more regularly in the days and weeks to come.