Charging Bull

I recall the 1987 Black Monday market crash as if it were yesterday.  I was too young in my business career to have anything invested in stocks but my clients were some of Wall Street’s darlings—companies like United Parcel Service and Arthur Young.  I stood in the crowd that afternoon, looking in astonishment at the electronic Dow Jones scoreboard outside of Charles Schwab’s brokerage on Montgomery Street.  The DJ Index kept posting bigger and bigger numbers.  A 508 point drop in a single day!  22.61%!  (To match that today, the market would have to drop over 2,000 points in a single day.)  I remember the feeling:  What will become of my business?  And my family?  And me?

Two years later, the sculptor Arturo di Modica surreptitiously took his 7,000 pound (3200 Kg)  bronze sculpture of an 11 feet tall, 16 feet long, oversized, bull, its head lowered, its nostrils flared, its body twisted . . . and trucked it to Lower Manhattan, where he installed it beneath a 60 foot Christmas tree in the middle of Broad Street in front of the  New York Stock Exchange as a Christmas gift to the people of New York, ten days before the holiday.  Why?  Because, he said,  it symbolized ‘the strength and power of the American people”.  The statue has become an instant tourist attraction.  “One of the most visited, most photographed and perhaps most loved and recognized statues in the city of New York. . . . right up there with the Statue of Liberty,”  said Adrian Benepe, the New York City parks commissioner.

That bull stands for more than the American people, for me.  It represents the unleashed power of the market, for capitalism itself, whether in the U.S. or Japan or China or Germany.  In a time of economic distress and tornado like we’ve just gone through, we remember that economic recessions are the price we pay for our economic freedom.

5/19/09 Wall Street Journal.  “Gauging the Economy’s Engine as it Sputters Along”, with the subtitle, ‘Calling a Recession’s End is Tough’.  At a recession’s end, the author says, news typically turns mixed.  “Optimism prompted by good news can vanish quickly when bad news suggests the economy is relapsing.”
6/2/09, WSJ.  “Dow Surges, Is Nearly Up for ‘09”.
6/4/09, WSJ  “United Plans Huge Jet Order”
6/4/09, Electronics Weekly.  “TSMC Calls the Upturn”.  This industry newspaper reported TSMC’s plans to hire 30% more process development engineers and 15% more design technology engineers.  One of their rationales—China’s $586B stimulus plan for infrastructure, which TSMC believes will result in Chinese consumers spending stimulus vouchers on cellphones, digital TVs, DVDs.
7/21/09, SJ Mercury.  “Economic Gauge up 3rd Month in Row.”
8/3/09, ZDNet Blog, “Chip Industires boom/bust cycles”.  The author speculated that the chip industry indeed appears to be recovering from its bust cycle and entering a boom cycle, which he fatalistically said will lead to the next bust.
8/3/09, Semiconductor International, “Recovery Arrives After Severe Downturn”.  George Burns, president of Strategic Marketing Associates, writes confidently that ‘recovery time is here. . . . The US economy has turned around and the Chinese economy is on the way to grow 8% this year.”

And then perhaps the biggest surprise.  The August 8 headline, “Hopeful Signs for US Jobs”, with the subtitle ‘July Unemployment Rate Slips Unexpectedly to 9.4% as the Pace of Layoffs slows.’ 

Wait a minute. Optimistic headlines while 247,000 new people lost their jobs in July?  Yeah, but that’s better than the 443,000 who lost jobs in June, the Labor Department says.  A whole whopping 1/10th of a percent better.

Here’s another view on it from that WSJ article of 5/19/09.  “In the labor market, one of the nearly instant measures is the weekly tally of Americans filing new claims for unemployment benefits.”  It is significant that the number in July is better than the June number.  And June’s 443,000 is better than May’s 630,500, which is better than April’s 658,750.  “A cresting in that measure has been a reliable signal that a recession is within six weeks of ending,” the article quoted an economist.  Wait another minute.  5/19/09 is ten weeks ago and we’re still in Recession, aren’t we?

One way to look at it.  Another way is the John Chambers’ way.  I watched him on KQED’s Nightly News this week.  “We may have reached a tipping point”, he says.  And in response, Cisco is getting ready to hire.   And spend money buying competitors. 

So it goes.  We each have our own tipping point.  The point at which we say:  I’ve seen enough.  I’m coming out of the cave where I’ve huddled, waiting out the storm.  I’m going to_____.”  And when millions of us say that, the bull roars.  The bull often returns faster than it ran away, because of the pent-up demands we all feel from 20 months of cabin fever.

I believe.  Career consulting is fun but I’m ramping up for some solid recruiting activity.

Best Wishes,

Ken Reed
President