This week’s Outside the Box is a little different. It’s a stroll down history lane and thoughts on confidence, from Grant Williams, in the form of an introduction to his letter Things that Make You Go Hmmm. Grant currently resides in Singapore, and I find him a very thoughtful read and a wonderful resource. Sit back, relax, and enjoy.
And for tho interested, I think I am scheduled to be on Marketplace on your local NPR Radio station on Tuesday, which is today for most readers. Good to be back home for a few days! And now, let’s think about confidence in a little different way.到货
Your Congress is making me less confident analyst,
John Mauldin, Editor
男性避孕药研发重大突破Outside the Box
The Confidence Game
“O, swear not by the moon, the fickle moon, the inconstant moon, that monthly changes in her circle orb, Lest that thy love prove likewi variable.”
– william shakespeare
Doyle Lonnegan: “Your boss is quite a card player, Mr. Kelly; how does he do it?”
Johnny Hooker: “He cheats.”
– The Sting
“In today’s regulatory environment, it’s virtually impossible to violate rules ... but it’s impossible for a violation to go undetected, certainly not for a considerable period of time”
– Bernard Madoff
On May 12th 1849, Thomas McDonald was walking along William Street in New York City when he was hailed by a ‘man of genteel appearance’ who proceeded to strike up a conversation with him. After a brief exchange between the two the friendly stranger turned to McDonald and asked matter-of-factly “have you confidence in me to trust me with your watch until tomorrow?”
Despite being unable to place the stranger, the familiarity of the simple request was such that McDonald presumed the man to be an old acquaintance not recollected and happily handed over his $110 pocket watch.
The dapper stranger strolled off in good spirits, never to be en again - but for a strange quirk of fate. On July 7th of the same year, McDonald was walking along Liberty Street (sans timepiece) when he happened upon the stranger once again. Recognizing him as the same man who had relieved him of his watch weeks earlier, McDonald hailed Officer Sway of the Third Ward who just happened to be nearby and, after a short cha and an even shorter struggle, the man had his hands bound and was marched to the nearest police station.
Upon having the thief brought before him, Justice McGrath recognized the felon as one William Thompson, an old off ender and ‘graduate of the college of Sing Sing’ and remanded him to prison for further hearing.
It transpired that Thompson had been wandering the streets of New York City for veral months and using the same method to relieve trusting strangers of a significant number of valuable watches. In that time, he had become known to the constabulary as well as a headline-hungry press as ‘The Confidence Man’.
William Thompson, while by no means the world’s first trickster, but he happened to time his escapades with the ri of the print media and so, conquently, with the New York Herald looking to ll more newspapers, both a nickname and an anti-hero were born.
Through the years, the term ‘Confidence Trick’ has been shortened to ‘con’ (also known as a bunko, flim-flam, gaffle, grift, hustle, scam, scheme, swindle or bamboozle) and has become a catch-all for any ru designed to dupe someone into believing something that isn’t true in order to relieve them of something of value.
Very rarely, when hearing the word ‘con’ the days, do we immediately associate it with the longer word from which it originates. A ‘con’ has immediate connotations of the negative kind (the most high-profile in recent memory perhaps being that perpetrated by inmate 61727-054 of Butner Prison, North Carolina: a Mr. Bernard Lawrence Madoff), whereas the word from which it derives is generally ud to convey a n of the positive.
Every month, all around the world, financial mavens scrutinize the collective confidence as a means to interpret both the mood of the populace and as a predictive tool for the future.
The various Consumer Confidence numbers relead for economies around the globe are ud as a barometer by analysts and investors to try and determine which direction and to what extent markets will move. Will declining confidence affect consumer spending? Will it lead to reduced investment? J
northwindust what DOES the prevailing mood of the public at large tell us?
Of cour, the fact that the figures are distributed monthly allied with the ability of the average human being to change his ( I definitely do NOT want to exclude the fairer x from THIS example) mind many times during an extended period such as that, makes them a somewhat unreliable indicator - or at least, one subject to sudden reversals bad upon external factors.
This past week, we have en the relea of a number of confidence figures throughout the world and a perusal of tho numbers makes for an interesting exerci:
First up, the United States:
own怎么读(March 25): Consumer ntiment in the U.S. dropped more than forecast in March, damped by higher gasoline costs and the effects of Japan’s natural disaster.
The Thomson Reuters/University of Michigan final index of consumer ntiment decread to 67.5, the lowest level since November 2009, from 77.5 in February, the group said today. The median forecast of 67 economists surveyed by Bloomberg News projected a reading of 68.
Then to Korea:
(March 25): South Korean consumer confidence fell to the lowest level in almost two years, damped by Japan’s strongest earthquake and political unrest in the Middle East. Retailers’ stocks dropped in Seoul trading.
英语六级考试The ntiment index declined to 98 in March from 105 in February, the fourth
“Consumer confidence worned so sharply, boding ill for private consumption and also economic growth,” said Park Sang Hyun, chief economist at HI Investment & Securities Co. in Seoul. “If oil prices stay above $100 a barrel for another month, ntiment will deteriorate further, prompting the central bank to pau interest-rate increas next month.”
How about the UK?:
(March 18): U.K. consumer confidence fell to a record low in February as Britons grew more pessimistic about the sustainability of the economic recovery and the outlook for jobs, Nationwide Building Society said.
厦门翻译An index of ntiment dropped 10 points to 38, the lowest since records began A measure of whether now is a good time to spend dropped 18 points to 52, also the lowest since the survey began.
A gauge of consumers’ future expectations fell 14 points to 50 and an index of their view of the prent situation slipped 3 points to 20, the lowest in 18 months, the report showed.
“High inflation has led many to expect interest rate ris by the summer, which may in turn have fanned concerns about mounting pressure on houhold budgets,” Gardner said. He es rates on hold “until the back end of 2011.”
France?:
(March 25):French consumer confidence fell to an eight-month low in March as surging energy costs sapped spending power and President Nicolas Sarkozy readied a new wealth tax.
An index of ntiment fell to 83 from 85 in February, national statistics office Ine said today in an e-mailed statement. That was the lowest reading since July.
With oil prices up more than 40 percent in a year, French motorists are paying more for gasoline while the government is planning electricity-price increas for later this year. That’s slashing spending power at a time when joblessness remains stuck near a ven-year high.
So it ems fair to say that the average consumer is not necessarily feeling quite as confident about
any ‘recovery’ as governments around the world would like them to. Soothing talk of improvements which will lead to the return of the good times can be heard from Finance Ministers, Prime Ministers, Presidents and Kings across the globe; but why is it so important to watch the confidence figures? Surely, if things ARE, in fact, getting better then the confidence will return organically?
With interest rates at all-time lows, housing prices in many places (though definitely NOT here in Singapore) significantly lower (and by extension, affordable) than they were a few short years ago, the unemployment situation stabilizing and the meltdown of the financial system averted by a courageous ‘Band of Brothers’, what the hell is everybody so worried about?
A look at the University of Michigan Consumer Expectations Index paints another worrying picture as it no-dived last week to levels below tho en wh en the recession was still uppermost in people’s minds back in the dark days of 2009. The drop was the 5th largest on record.
SOURCE: ZEROHEDGE/BLOOMBERG
As a sidebar, it’s interesting to note that the first month after the recession officially began back in 2008 saw a positive jump in expectations, while the first month after its end saw the opposite reaction. Fickle things, humans.
Now, it ems quite reasonable to assume that, ultimately, at its ba, this is all about confidence. If people are confident about their own prospects as well as tho of the economy as a whole, they will be happie r to spend their money. If they spend that money then other people will make more ‘stuff’ for them to spend it on which, in turn will put more money in the pockets of tho making that ‘stuff’ who will then go out and buy ‘stuff of their own. Everybody ends up with a lot of ‘stuff’ which makes everybody happy. Stuff equals happiness. There. Economics for Dummies.
At this point in the proceedings, a quick trip back to the aftermath of 9/11 and an article in the National Post (Canada) proves quite educational:瓶中信
敏锐的意思
(September 28, 2001): Western leaders, worried about the possibility of a recession fuelled by terrorist attacks in the United States, are urging their citizens to spend money, take vacations and buy new cars and homes.
Jean Chrétien, George Bush and Tony Blair yesterday all called on consumers not to be spooked by the cataclysmic attacks of Sept. 11.
Mr. Bush urged Americans to “get on the airlines, get about the business of America” as he announced improved curity measures on commercial flights.
Mr. Blair ud a news conference at 10 Downing St. to appeal to the British public to return to everyday life, including their usual spending habits, to fend off recession.
“People in this country ask what should they do at a time like this,” Mr. Blair said. “T he answer is that they should go about their daily lives: to work, to live, to travel and to shop -- to do things in the same way as they did before Sept. 11.”
the best choice
And Mr. Chrétien urged Canadians to face down terrorists with
会计的职能不具有Mr. Chrétien ob rved that interest rates have been cut to the lowest level in years, “so it is time to go out and get a mortgage, to buy a home, to buy a car.”
Some American officials are even calling a trip to the mall an act of patriotism as the United States tries to rebound and rebuild.
Rudolph Giuliani, the Mayor of New York, has said that his battered city needs “the best shoppers in the world” to return to restaurants, Broadway shows and shops.
And local officials in Florida have declared this weekend “Freedom Weekend,” a time for people to do their patriotic duty and spend money.
“Go out and contribute to the economy,” Alex Penelas, the Miami-Dade County Mayor, said at a news conference yesterda y. “As my wife said, it has never been more patriotic to go shopping.”
The problem comes when, despite plenty of talk about things getting better from tho elected to make us all happy, despite us being told that disaster has been averted, that unemployment lines are getting shorter and that things are definitely on the up, confidence wanes and people just stop believing. When that happens, the trouble begins.
Just yesterday, London saw the biggest union-organized protest in 20 years as over 250,000 peaceful protesters marched from Westminster to Hyde Park to demonstrate AGAINST austerity measures being enacted by the coalition British government. The march was, perhaps predictably, hijacked by youthful ‘anarchists’ who had clearly decided either that Top S hop was the number one villain in the corporate world, or this was a tremendous excu to don a hood and a bandana and have a day out in London smashing things up - I know what I think to be the truth of the matter.
But I digress.
