8.10.2002

Delayed Gratification is Still Gratification

Hiring new auditing firm: $300/hour per person
Mis-stating revenue: $3.8 billion
Destroying people's livelihoods: 17,000
Seeing the former CFO and the former Controller of WorldCom getting perp-walked through a phalanx of cameras: Priceless
There are some things money can't buy - for everything else, they're just going to have to wait until you get a job!
Accepted everywhere... except Federal prison.

Lately It Occurs To Me... What a Long, Strange Trip It's Been...

The Aquamarine Fairy and I were talking this week - he was outraged at all the corporate shenanigans going on these days - the Enron scandal, WorldCom's bankruptcy, executives who cook the books and make millions while the rest of us scramble to find jobs in the wake of company failures. His company is about to lay people off, and he was upset about how they interviewed new people and were taking them on tours of the building as the discarded were packing up their desks to leave. Moreover, he noted the age disparity between the departing and the arriving.

However, when you're Shocking Pink, you're jaded, bitter, and cynical. Moreover, those are your good qualities! In fact, things like this just make me laugh. When company lackeys can take a national tragedy, like the attacks on the US of September 11th, and turn them into a "reason" why corporate downsizings should continue, I feel free to continue with an utter lack of guilt over my behavior.

Nothing need have changed in terms of employment, all over the country, just because of the attacks. In fact, the US is notorious for getting involved in war efforts in order to beef up their economy! Executives all over the country decided that it made the perfect scapegoat, since their little house of cards was about to get knocked over by reality, or the SEC, or by well-justified shareholder lawsuits. But it turns out the real cause of the current economic downturn is the way executives booked revenue that never really happened, shifted losses to imaginary subsidiaries, ignored Generally Accepted Accounting Principles, and turned immediate expenses into things that could be capitalized over many years. And when it all started to crash down on them, they figured they could cover their tracks just that little bit longer by laying off thousands of people and blaming it on the aftermath of September 11th. You think ol' Shocking is cynical? I'm a rank amateur next to the CEOs of Corporate America.

I also pointed out to The Aquamarine Fairy that I didn't think things were nearly so bleak as he thought. Companies are still hiring. Jobs are still being created. The rate of layoffs has slowed. In addition, it's a little less politically correct to bring in H1B's for jobs when so many Americans don't have them. The companies that still dare to do so mostly outsource this work offshore - where they're less visible. Moreover, I pointed out that if these companies declare bankruptcy, they screw the investor, but it's not as if they stop providing jobs.

Sure, many individual investors have lost their shirts, but there's a critical difference. Generally, but not always, those that played the stock market did so with non-essential money - i.e., retirement funds. Therefore, they didn't need the money for day-to-day operating expenses. When they suffered losses, it's not as if they couldn't pay the mortgage today. Now, they might not be able to retire until much later than they thought, but it's not as if they're about to get evicted. There are some exceptions, like people who retired and held considerable positions in a particular company's stock. Don't think I'm not sorry that this happened to them, but they should have consulted an investment professional. Any registered representative can tell you that your portfolio should be diversified, and that as you age, your percentage of stocks should generally decrease; the less risk you can tolerate in your investments, the less stock you should own.

Aquamarine is also coming available right at the beginning of the third quarter hiring rush (which, technically begins at the end of the third quarter). If he plays his cards right, he'll pick up a project that will last until the real employment rush starts the second quarter of next year, and then he'll get a job with much longer term prospects then. However, I wouldn't wait too long to get going in this round - it's a short season, and stalls out by Thanksgiving. Hiring is then fairly intermittent until the spring rolls around.

8.4.2002

"Many people dream of success. To me success can only be achieved through repeated failure and introspection. In fact, success represents 1% of your work which results from the 99% that is called failure." - Soichiro Honda