Regular readers of BMA, and I know there are dozens of you out there, know that there is nothing I like more than science. Particularly science extrapolated from a single experimental result and recounted in blogs.
For example, just last week the NYT’s Economix blog asked Do Hungry People Take Bigger Financial Risks? According to some scientists in the UK, hungry people, or at least 19 guys in their mid-20’s who hadn’t eaten lately, tend to take more risks. What’s more, the blog post describes an experiment different than the one in the paper that it links to, which tells me that there must be two scientific studies out there supporting this exciting new finding.
It is exciting because it confirms a previously held belief of mine, that the problem we have in this country is too much food and not enough risk taking.
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In March I wrote a post explaining how and why the US Postal Service had
begun to slowly circle the drain. It had the impact on policy makers that my more clever posts usually do, which is to say none at all. So here I am trying again.
The USPS is a business (term used loosely) with high fixed costs and a variable income. That means that what it costs to run the operation is not particularly tied to the amount of business being done. It is a setup that is typical of transportation companies, not just postal services but also, for example, airlines. (And telecoms and media companies, BTW.)
When revenues are growing, all is well. Incremental income is mostly profit, since the overhead has been paid for. But when the trend is in the other direction, an irreversible death spiral often results.
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By 2pm on May 6, 2010, it was clear that the stock market was having a bad day. The Greek Crisis was going through one of its spasms of fear and uncertainty. It was also the day of the UK general election, and by mid-
afternoon in New York it was becoming clear that the result would be some flavor of a hung parliament. The S&P 500 was down –2.9%, a decline that only a few years ago would have been considered headline news but is now mundanely bad.
Then over the next 46 minutes, the decline accelerated to the point where it became severe, then horrendous, and finally absurd. At about 2:46 the S&P was down about –8.6%. I say “about” because at that point the basic fabric of the marketplace was breaking down and exactly what the S&P was trading at, and when, is not clear even months later.
And then, as if the market fairy who had caused this twitched her wand in the other direction, the market staged its best ten minute rally in history. By 2:55 the S&P was down only -3.9% on the day. It would close down –3.2%.
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I missed last month’s Frugal Friday, so today’s edition has to cover two months of developments on the frugal front. However, for better or worse, it does not look like I missed very much while I was gone.
The usual recurring themes recurred. Free Money Finance linked to a post at the Printer.com Blog that rated commonly used fonts on the amount of ink used.
Penniless Parenting had a post revisiting that old chestnut, reusable toilet paper. Of course, we all do that already. But she did have a nice idea for a nifty homemade dispenser, with pictures.
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On the last Tuesday of every month two pieces of data are released. We get the monthly update on the Case-Shiller Home Price Index, which is based on thousands of real estate transactions, in which real families spend what is often their life savings. And we get the monthly number from the Conference Board’s Consumer Confidence Index, which is based on a short questionnaire sent to 5000 households asking them how optimistic they feel.
Yesterday the C-S 20 City Composite showed a nice little uptick, +0.8% for April, +3.8% year on year. That reversed a few months of downticks and was reassuring to those of us rooting for stability in the housing market.
The CCI, on the other hand, was down to 52.9 from 62.7. That undoes two months of gains and returns us to a point just above the March level.
How did the stock market react? Was it cheered by what households actually did with their money in April or depressed by what they said to pollsters in June? The S&P was down –3.1%.
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Government, Musings, PF Blogs | Frank Curmudgeon | 
July 9, 2010 5:59 pm | 
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