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Half a Point, Anyone?

So, I’ve been watching the markets lately and they’ve pretty much been going up a bit. Dipped my toes into some stocks, but have yet to back up the truck and really dive deep into anything spectacular. I suppose it’s just that I cannot seem to get excited about anything as of late, and I know, deep down inside, that at some point the fed is going to rasie the rate and the little house of cards will fall down upon itself.

Interesting thing, this house of cards, seeing as it’s an election year and all. I almost wish the feds could raise the rates half a point and get the ball rolling already, but they won’t do that because of their constraints. The upcoming election is going to stymie any potential rate hikes.

There is a huge demonstration on Capitol Hill today regarding stock options and accounting practices, which could have the potential to bring about sweeping changes in the way high tech employees work and get paid. It has garnered little attention from the media. I find it particularly interesting how politics can indeed make for some strange bedfellows. In this case, I believe the folks supporting the stock option accounting changes include the likes of Alan Greenspan, while lining up the opposition is Congresswoman Barbara Boxer and several high tech stalwarts including the likes of Oracle founder Larry Ellison. Strange partnerships are forming in an already befuddled landscape.

I once had a conversation with my sister about Alan Greenspan. “He’s getting old,” I said to her, “he really should think about retiring.” To which she replies, “are you nuts? We can’t lose him?”

I was like, “he’s made a few bad calls recently. Not sure about where his true loyalties lie and I think I would like to see him gracefully bow out.” She responded, “Do you really want to consider an alternative?”

It’s true. Ellen’s right. It’s hard to consider any alternatives. He’s been in the position for so long, and so few people really understand the workings of the fed and the impact it has on the fiscal community. We will be hard pressed to find a replacement. A few weeks ago, TheStreet.com did a story about potential replacements for Mr. Greenspan (“Greenie” as we like to call him) and it seemed that any possible candidates fell extremely short. The one big thing he has going for him is that he is a die hard moderate when it comes to his approach to change. He has made the connection that, even a small change in fed policy or pricing has huge ramifications and impacts of global consequence. I doubt that few, if any, other people even come close to his level of understanding. It’s something that I wish more people could do. It’s not easy thinking about consequences and, espeically lately, there has been these prevalent extreme short-sightedness ruling the roost. Nobody understand the old laws of physics: “an action has an equal but opposite reaction” or “a body in motion tends to stay in motion until an unbalanced force stops it.” Simple laws that apply about as equally well to finance as they do to gravity.

It’s true even in small businesses and even with respect to quality. Nobody wants to produce high quality goods anymore. Nobody thinks beyond the next quarter, the next round of numbers, the next earnings season. Three months has become ultra long term these days. And people do things without understand consequences or considering them. Everybody has a horrah for me and to Hell with you attitude and everybody wants to get in and get out before they get noticed. If we were to collectively stop thinking about our own bad selves and start doing what was right, the world would become a much better place, but we can’t see out past the breakers and into the next big wave.

Until next time, this is Carol, the Carol in “Carol’s Little World” signing off.


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