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Tinkerbell Economics

If you believe and clap your hands, the Fed Fairies will live. During his tenure as Fed Chairman, Ben Bernanke miraculously salvaged the US financial system, and – in the process – helped lower our credit and credibility. This week, Bernanke’s carefully phrased farewell conference absolutely ignited the equities markets. Indices rocketed to new highs, based on warm phrases, questionable data, and no precedence of any kind.

Be advised – Uncle Ben warned those of us without proper training to refrain from looking behind the curtain. Our job is to believe.

Helicopter Ben has been dropping cash out of the sky for years, now. Free money is an admirable and time honored solution for most of mankind’s ills.

In a stroke of genius, Bernanke pulled off a brilliant finale to wrap up his term as Fed Chairman.

His December 18 exit statement contained the firm assurance that less money will be available – by a small percentage – at a specific future date.

With that announcement, Bernanke put another success on his resume at virtually no cost or special obligation to anyone else.

For my part, I’m willing to give Bernanke all the credit he wants. Somehow – with frightfully few resources – he was able to keep us afloat even as Congress conspired to sink us deeper into debt.

As Janet Yellen prepares to take over the Fed, some speculate that she might be willing to out-Bernanke Bernanke, actually increasing the supply of Funny Money, if she decides it’s necessary.

So, how am I answering people who ask me about the economy?

Here’s how we break it out…


Posted in Economy, Employment Scene, Energy, Financial Markets, Pick.

Light Bulb = Bright Idea

A startup company needs $100,000 to get its first product off the ground. Sixty days later, it has $1.3 million. There was no stock sale. No bank. No loan. The owners maintained complete control. And advertising was minimal. How is that possible?

Setting aside run-of-the-mill factors, like brains, hard work, discipline, organization, and guts, (you know, the conventional stuff) there are some remarkable dynamics that came together in this story.

Let’s include

  • big business,

  • big government,

  • LIFX, and

  • Kickstarter.

And all of it centers around a light bulb.

Here’s what I think happened…


Posted in Innovators, Pick.

Learning From Rockwell’s Q3

Rockwell Automation is performing well, but growth is hard to come by. So, where’s the opportunity? Looks like Controls are selling well in Brazil, Mexico, and Canada. Are you getting any of these markets?

CEO Keith Nosbusch is “very pleased” with Rockwell Automation’s recent performance… under the circumstances. He said that ROK’s Q3 (ending June 30) was so strong that Rockwell almost certainly won’t underperform last year’s numbers.

Or, as Mr. Nosbusch put it, “We now project… full-year organic growth of approximately 1 percent.”

He may have arrived at that 1 percent projection (on July 30,) because, “Through nine months, organic sales are up 1 percent…”

Works for me.

I suppose, basically, if everything runs the same for the next three months, we’ll probably finish this year about the same as last year. (But, at least for appearance’s sake, you can bet they’ll fight to turn in numbers that beat 2012.)


Posted in Benchmark Companies, International, Pick.

Motown Gold

I invite you to join me on a little side tour of optimism, as I examine the flip side of collapse. This one is fascinating.

As I was working through my Landmark blog on the Detroit Bankruptcy, my mind kept running to Rothschild’s investment advice from the 1800s: “The time to buy is when blood is running in the streets.”

Clearly, blood is running in the streets of Detroit. It’s bad.

This cesspool of decay and corruption breeds the highest violent crime rate of any major city in America.

The mayor has moved his residence to the Federal Penitentiary in Milan, Michigan.  It had something to do with “extortion, bribery, and fraud,” according to a federal prosecutor.



Posted in Leaders, Pick.

Landmark – Detroit Bankruptcy

We knew Detroit was imploding. We might be surprised how complicated its bankruptcy will become. Beyond unions, retirees, bond holders and tax payers, other collapsing cities will also have a stake in the results.  They’ll almost certainly model their actions off Detroit’s decisions. Meanwhile, the state of Michigan may be heading in a different direction altogether, acting more like Indiana and Wisconsin. This is going to be interesting.

Detroit “Emergency Manager” Kevyn Orr filed a Chapter 9 Municipal Bankruptcy in Federal Court, Thursday, July 18, 2013, effectively surrendering to a massive $18 billion debt and a shrinking tax base.

Expect this case to be noisy and messy, but here’s what we know today…


Posted in Business Climate, Employment Scene, Financial Markets, Landmark Events, Pick, Political Commentary.

What’s An Engineer Worth?

There’s a lot of confusion in the market.

I’m seeing wild bid/ask spreads of 50% for all levels of engineers.

A major international processor budgets $80,000 for an engineer in the U.S. Nine months later, the position remains unfilled, and two more engineers have left.

An engineering/construction firm budgets $80,000 – $90,000. The position is filled by creating a different position worth 50% more.

I have requests to pick up younger engineers who might move for a pay bump, to take their incomes up to $50,000 or $55,000.

Meanwhile, candidates who haven’t even graduated report offers ranging from $55,000 to $70,000. Stranger, the candidates, themselves, are mystified as to why the same people would be offered $55,000 by one company and $70,000 by another.


Posted in Business Climate, Employment Scene, Pick, Special Report.

Landmark – Hurricane Sandy

Largest Atlantic hurricane on record, extending over 1,100 miles. Struck Atlantic City, NJ at 8:00p on Monday, October 29, 2012. Pressure dropped to 940 mbar.

Massive, fast moving flooding compounded by high tide, high winds, full moon. Wind damage. Fires leaping from building to building, pushed by winds up to 110 mph.

Power outages for some 8 million customers. Mass transit suspended. NYSE and Nasdaq closed for two days.

Early estimates put costs over $50 billion, including business disruption. Losses may be second only to Katrina.

The storm dropped heavy snow in West Virginia, huge waves on the lakes in Cleveland and Chicago.

Posted in Landmark Events.

Landmark – 9/11 Embassy Attacks

On the eleventh anniversary of the 9/11/01 attacks on the World Trade Towers, presumably pre-planned attacks hit U.S. interests in Egypt and Libya. They were quickly followed by attacks in at least four other locations.

9/11/12 – Cairo, Egypt
9/11/12 – Benghazi, Libya

From Wikipedia…

“In Benghazi, rocket-propelled grenades and small arms were fired at the U.S. consulate and set a fire that killed the visiting United States Ambassador to Libya Christopher Stevens, Foreign Service Information Management Officer Sean Smith,[16] American private security employee Glen Doherty,[17] former U.S. Navy SEAL Tyrone Woods,[18] and ten Libyan policemen;[3] and injured two others. In later reports, officials said that the Benghazi attack appeared to be “complex” and professionally executed.[19] U.S. officials, speaking under anonymity, said that they believed the Benghazi attack was coordinated and planned in advance, and not prompted by the film.”

Stevens was the first U.S. Ambassador killed since 1979.

On 9/13, the violence spread…

9/13/12 – Sana’a, Yemen
9/14/12 – Chennai, India
9/14/12 – Tunis, Tunisia

“Further protests were held at U.S. diplomatic missions and other locations in the days following the initial attacks. Related protests resulted in the death of one person in Tripoli, Lebanon.”

Posted in Landmark Events.

Automation In Agriculture – And Forces That Drive It

Visit a farm and get lessons in labor, regulations, security, deadlines, weather, and international trade. It’s good news for engineers.  A little grim for the rest of us.

Thursday, August 30, I had the opportunity to make a quick run up to Michigan. A few hours after we landed, I was standing in a field of sugar beets, getting insights that stretched from the ground I was standing on, all the way out to the future of our country.

Initially, I was simply interested in the automation used in the harvest. It is pretty amazing.

My attention was redirected to the trucks that carried the harvested sugar beets.

From there, my speed education took on layer after layer of significance.

We talked a lot. I’m going to summarize it down for you, as best I can, focusing on six obvious challenges that farmers have to overcome, just to stay in business. And I won’t refer to education, taxes, money, or credit.

In this case, we’re talking about a large, long standing, well run operation with an excellent reputation.

I see this one farm as a representation of a region, an industry, small business in general, and an indicator of national and international forces.

I’ll try to be quick. There’s no way I can be detailed. Perhaps you can take some of what I learned and carry it to a higher level.

Now, back to the trucks…


Posted in Business Climate, International, Pick, Political Commentary, Special Report.

Landmark – Restoring Love – Dallas, TX

Significant in a presidential election year, this enormous three day series of events focused, not on a candidate, but on morals, principles, and responsibility.

The most controversial premise ignores political parties, altogether. It argues that restoring our own American principles and character will reshape America’s culture. And, in turn, it is our culture that selects and guides our candidates.

The cultural issue is real. One million meals were reportedly shipped out to a total of eleven cities – backed by a battalion of lawyers protecting the right of Americans to send food to Americans in need. Very strange.

I’m marking this date, because the media has largely ignored it. And that would be understandable. Restoring Love is the third massive Glenn Beck event, following Restoring Honor (Washington, D. C.) and Restoring Courage (Jerusalem.) In between events, Beck has overthrown conventional media restrictions to form his own subscription based internet TV company. In the last year, he has formed a publishing company, music and film companies, and he is recruiting talented performers, showcasing even more original creations. I’m certain the media has no idea what to do with him.

Yet tens of thousands of seemingly reasonable Americans did do something significant in Dallas this week. And their energy will continue to vibrate across the country for months to come. Through this Landmark entry, we expect to revisit this date.


Posted in Landmark Events, Pick, Political Commentary, Religion.