I often wonder...
Just what the heck is going on?
How do some things get so messed up?
As I age, the more I feel as if I am lacking the wisdom to understand what is happening around me. How are certain decisions made, and by what idiot? Who decided that it would be great to reverse the handle on the Slurpee machine, causing it to spray all over my nice suit? Why does the arguably best hotel in New York serve its chilled beverages on a tabletop in your room, without some sort of matting to prevent stains? (Yeah, still feeling guilty about that one.) Why do the people of Illinois keep voting in governors that wind up in jail (FACT - four out of the last seven! Note to my former fellow Illinoisans, this is a problem with the electorate and not the elected.) What idiot thinks Slurpees are a good idea when wearing a suit and being a nominally responsible adult? Yeah, that one was rhetorical. Obviously, I am that particular idiot.
How are we collectively not fixing all the immense problems that face us? Furthermore, if we are not collectively fixing our issues, what are we to do individually? Spare me the "change begins at home" line. I didn't buy that one in high school either. Of course, if it doesn't begin at home, then it must begin with the government, and the politicians we all know can be trusted to do the right thing, right? Particularly in Illinois.
Chaos in Employment:
It seems so many of the senior executives I know are out of work. These are highly paid, often brilliant folk, with a wealth of experience and wisdom gained. Yet they are currently unemployable. Overqualified, overpaid, over educated, now taking jobs selling used cars and becoming department managers at local WalMarts (by the way, my local Wally World is running 20% understaffed due to a lack of qualified candidates according to scuttlebutt,) just for benefits and a few dollars. My normal advice would be to suggest becoming an entrepreneur, but the next jerk who hands me a business card with "That Persons Name Consulting Company" as their corporate identity, is just going to get laughed at (and possibly punched) in the face. I am at a loss with no idea what to say to these folks who were my compatriots, and are now desperate.
For the technology folks I know, and I am speaking of hardcore hands-on coders and architects or engineers, it is the opposite case. I have had at least two in person conversations in the past month, and two word of mouth anecdotes were shared with me, where the hands on technologists have begun shutting off LinkedIn job solicitation availability for recruiters to contact them and placed personal notices in their email signature files as well as on their blogs asking not to be contacted with employment offers. At the very least, they are being much more subtle about their potential to jump ship...
Tom Leung the CEO over at Poachable.co said, (if you are a person who I am talking about in either paragraph immediately preceding this, you MUST check out his website) "If you meet an Android developer who is competent and a Stanford MBA product manager who has an IQ of gazillion, you take the Android Developer every day of the week - even on Sunday. Unless she's the same person as the Stanford MBA, in which case you immediately propose marriage and agree to her pre-nup." Tom is obviously both pragmatic and hilarious, and ladies, I am not sure if he is single or not, but am happy to ask for you...
If we accept fast food jobs as a proxy for the entry level to the workforce, then there is a hugely significant problem at that end of the employment spectrum as well. My professional life over the past month and a half has kept me on the road literally four out of the past five weeks. I am not proud to admit it, but I have visited quite a few fast food franchises in the Midwest as well as up and down the Eastern seaboard. Without fail, literally every single fast food franchise I have visited has had "Now Hiring" signs of some sort posted from small fliers at the register, to full advertising on their street side billboards-every single one.
This is sheer speculation, but having experienced my own travails in hiring at the lower end of the compensation spectrum, to the point of giving in, and shipping those tasks overseas, it occurs to me that there may very well be an economic argument for the lower ends of the employment spectrum to not accept a job that offers less than $20 or $25 per hour. Having never requested any sort of government benefit beyond a few weeks of unemployment back in the 90's, I am not sure how it works exactly (I imagine, it differs on a case by case and state by state basis) but putting myself in those shoes, if I were offered $25,000 to work, and $20,000 to sit at home pretending to look for work - it would be difficult to justify having a boss, accountability, and you know, a gig...
Absurdity in the (Capital) Markets:
I took a straw poll recently, just a random single question of several people I have come into contact with. It went something like, "Hey, how is your portfolio doing in terms of equities?" If there was any reply indicating participation in the market, I asked a simple follow up, about how the allocations were being done. In every single case, in which a person I was speaking with responded they had some holdings in equities, the holdings were in the context of mutual funds or other instruments of aggregation, and specifically not a particular equity issue. When the pattern became obvious to me, I started to ask about why, and to a (wo)man the response indicated a portfolio that was large enough to demand management of some sort, small enough (and this was not a scientific poll, I sought these every-joe respondents out specifically,) to not be institutional of its own right, and most tellingly to me, a very significant expression of concern about the stability of the markets in general, and particular the risks the world is facing.
Disclosure: I used to be a professional trader.
Knowing that the current professionals are most likely even more aware of the risks to the market these days, I called up Bobby Schwartz over at RCM Asset Management who not only is a trader and fund manager I admire, but is employed by the exchange to discuss these issues from an educational standpoint for other folks. Apparently, I have kept out of the game for too long, as Bobby immediately turned me on to a few new instruments aimed at diversification (always a good thing), but more specifically aimed at hedging downside risk to a net long equity portfolio. If you are in the boat of folks I have been speaking to, i.e. having a portfolio that is increasingly worrying to you in these times of uncertainty, it may well be worth talking to a financial advisor and fund manager like Bobby, who well understands (downside) volatility, and actively manages to it.
Upcoming columns will be focusing on as I feel like it:
•Community problem solving
•Firewood gathering
•Coffee and other elixirs of life
•FDA regulatory oversight
•Minimum wage debates