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Brian Patrick Cork is living the Authentic Life

the Real Stimulus package

February20

So…

My current theory is that McKinsey has likely posited a report stipulating a formula whereby public companies of a certain size reduce their work forces by a certain percentage. We are seeing this (i.e. employee reductions of approximately 6000 per company) happen almost daily.

What will most certainly follow is stock analysts rewarding these companies (and themselves) with opportunistic positive forecasting. Those companies that cooperate participate in the stimulus campaign will, in turn, be rewarded with higher stock valuations and share prices – which is obviously good for shareholders (this is particularly great for executives), and our economy (generally speaking).

This is a “Chinese maybe”.

The bottom line: The American people can’t/ won’t tolerate a devolving stock market much longer. So, it will “go up” (as the amicable Barrista at Starbucks confidently stated yesterday [to be clear, she said the “go up” part – none of the other bits and pieces]).

Seriously.

As large companies sacrifice shed lower-level employees (and dead-weight) mid-level management, the stock market will react (that buffoon the buzz killing Kramer on MSNBC notwithstanding) and trend upwards (despite 33 year old A.D.D-addled day traders). NOTE: a Client of mine that is the CEO of one of these aforementioned (think billion +) dollar companies recently mused that part of this thinking includes “squeezing” the remaining employees so productivity (also) goes up even as COST of doing business (lighter payroll) is reduced.

Summary: As the stock market begins to go move up, and stock analysts “cooperate”, investor, and American confidence in general, will mount; the DOW will point North (go up); and, the economy will follow.

Then companies will begin hiring again.

This will play itself out A LOT faster than any thing President Barack Obama has planned.

So… GM will start selling SUV’s to people that live in Alpharetta again. NOTE:  One (amongst many) reasons I purchased a Ford F-150) [by the way…  Is it just me. or does the music associated with the Ford video sound like something from an updated Dawn of the Dead movie?] was due to their bold stand in refusing to take money from the government relative to the “other” stimulus package that will (as intimated above) take a decade to waste everyone’s time and become not much more than wikipedia-fodder (but, mostly for my dog and soccer [incidentally, I have settled on “Rowdy”]).

By the way… Thanks for making this Blog part of your life.  About 25,000 hits a day now.

Let’s Stir it Up with Bob Marley. Appropos for my Blog.  And, its Friday.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

7 Comments to

“the Real Stimulus package”

  1. Avatar February 20th, 2009 at 4:02 pm Nick Johnson Says:

    I hope the compass will point North again soon, but I’ve got a sneaking suspicion that the creators of wealth in this country will need to be squeezed a bit more before they finally say “Enough!”

    The POTUS thinks that a pork riddled and bloated bill transferring wealth around will “stimulate” the economy. There was a popular quote back in the good old days for that sort of thing: “From each according to their ability; to each according to their need.” Of course, that didn’t work out very well.

    Maybe when the creators of wealth begin moving to countries offering more financial and personal freedom (namely freedom from wealth confiscation) with more regularity, the political minds of this country will realize that the only way to improve Joe Public’s personal finances is through education.

    Will Joe Public dig himself out of his financial ignorance because he received a check from the government? We must remember Pavlov’s dog.


  2. Avatar February 20th, 2009 at 4:07 pm Z. Kelly Queijo Says:

    Smart Growth. Productivity. Efficiency. The comfort words of the decade.
    Thank you.


  3. Avatar February 23rd, 2009 at 6:51 pm shaferfinancial Says:

    Political theater aside, the economy will do what it will do no matter what anybodies ideology predicts. The job of business and investors is to harness that economy for personal and societal benefit. The arguments over the stimulus bill only tell us what people think they know, but the truth is none of us know much!


  4. Avatar February 26th, 2009 at 2:20 pm Brian Patrick Cork Says:

    Look at my Post asking what certain people BELIEVE.

    One of my favorite Bono quotes is: “The less you know, the more you believe.” NOTE: I got this from one of my soccer Moms (I learn so much from those kids every day).

    Cork


  5. Avatar February 23rd, 2009 at 10:01 pm Nick Johnson Says:

    Political theater? Does that phrase reference someone’s comments or the country’s political landscape as a whole? If someone’s comments, are you suggesting someone is being disingenuous?

    A given entity will react to any given stimuli. I react to stimuli, you do, companies do, everything does. The economy will react to stimuli. The greater the stimuli the greater the reaction. This particular “stimulus package” seems to suffer from gross obesity. So, its large and will have an impact on the economy. Now, why say that the economy “will do what it will do”? The entire conversation leading up to the signing of the stimulus bill was an effort by those disagreeing with the bill to gather enough voices to squash the package or at least temporarily derail it – remember Dubai Ports. Sure, it will do what it will do now that the bill has been signed and will begin to go into effect. But the arguments were to prevent it; now the arguments must be to prevent future bills like it from gaining traction. I may be reading your sentence wrong, but it seems as though you’re asserting that the economy exists in a vacuum – immune to the effects of political policy.

    I’ll also take issue with claiming that the job of businesses and investors is to harness the economy for personal and societal benefit. Why societal benefit? I can’t think of a company that does anything for societal benefit. So Google put solar panels on their roof – not for societal benefit – that action will have a positive effect on their bottom line. They will spin the whole societal benefit thing, but the truth is they are sure to make money from it in some way – even if it is just in deepening customer loyalty and brand recognition. How is it anyone’s “job” to do anything for societal benefit?

    Also, I think you underestimate “people” and what they “think they know.” We didn’t know much about Dubai Ports when the President tried to hoodwink the public with that a few years ago, but we knew enough to know we didn’t like it. Similarly, plenty of people don’t like the idea of a huge government run stimulus package. We may not know everything about the package, but we know when something sounds wrong. It is the argument itself, not the winner or loser of the argument, which reaches the ears of congress members. When the argument is loud enough, they may just have second thoughts about their “Yay”. Since we’ll never know every detail, we absolutely must have the arguments, since abstaining from the conversation would give political leaders an assumed thumbs up – “Well, no one’s talking about the bill; I guess they don’t care. I vote “Yay” for a trillion dollar wealth redistribution plan.”


  6. Avatar February 24th, 2009 at 1:35 am shaferfinancial Says:

    Political theater meaning the administration and the minority doing their dance with each other.

    As to the stimulus package or any government program, I believe it does little to effect the overall economy unless it is applied consistently over long periods of time (decades) or at least there is no way of identifying how each part of the system is effecting other parts. Chaos theory has pointed out that small seemingly innoculous events can cause large disruptions in the sytem. For example, when a small group of engineers decided to create a system to talk to each other using data lines instead of telephone lines there is no way they knew or could have known that it would morph into what we are now communicating on (the www).
    So when anyone (cheerleader or opposition) says the stimulus package will cause XXXX, they are simply taking part in the great political theater of the moment. I mean the stimulus package represents less total $$$ than has been spent on the war effort. We have been at war longer than any other war in our history. It is well within the realm of possibility that this as much as anything caused the RE bubble. I suggest that the system is so complex as to make the interactions unknowable and therefore impossible to predict.

    Finally, in a general sense, if you don’t run a business that does something for societies benefit then you will be out of business soon, IMHO. Unless you think that you can force feed people something that does nothing positive for them????


  7. Avatar October 28th, 2009 at 11:41 am running with the Bulls and driving Cattle « The Unsinkable brian cork Says:

    […] both cleverly manipulated) that the market would not go below 6000. You can read more about that here (but, there is more elsewhere), and on this very Blog. Do […]


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