In celebration of a decade of Barataria, I have to present another repeat. This is from March 2008. It’s an interesting time in that it was six months after the stock market peaked and six months before the financial collapse became obvious. One of the great themes of Barataria since this time has been how we’ve seen it all before and we’re about to see it again. The real story here isn’t that I called it at this time – it’s that so few people saw what was obvious as it happened around us.
Imagine that a new technology comes along that spawns a whole new industry. Not only is this industry a revolution in how people lead their lives, it’s immensely popular and generates a big pile of cash. The field starts out wide-open with many small entrepreneurs, but gradually they become rich as they are bought out by a few big players. Soon, the industry has consolidated and re-investment slows dramatically. Those who made big money start to put it into real estate, specifically in Midtown Manhattan, Florida, and Los Angeles.
In the heat of the summer start to the Presidential campaign, it’s hard to remember that we’re really still in Winter. That’s in economic terms, as the cycles of the seasons last for years rather than a few months. There’s a good reason people are as angry as they are. This Winter has been long and brutal.
Then again, as Barataria has pointed out before, things are very much warming up. Employment is up like the first tulips of Spring and most of the signs are very positive. But it doesn’t feel that way to many people. As sure as the arrival of Spring often comes with a few storms it seems darker before it all clears up.
Spring is coming. If you pause for a moment and reflect you can feel it. But that doesn’t mean it’s time to just sit around and wait. If you ask any gardener or farmer, Spring is the season with the most work. To get it done, there is no doubt that we are stronger together – that many hands make light work. More importantly, what we harvest is what we plant now. There’s a lot to do, but plenty of reasons to do it joyfully.
The day started with a shipment of my latest experiments from Germany. The high performance plastics (fluoropolymers) which were on the cutting edge of the technology, if everything turned out right, had to be separated from the latex solution they were made in, washed, and dried. It was a lot of labor but in the 3M lab we had to do our own workup after the fully setup lab across the Atlantic pushed through our requests.
In the middle of squeezing water out of the flaky solids with cheesecloth Steve Amos came in. “A plane hit a building in Manhattan. It’s on fire.” We talked about the news for a while even though we knew little. Steve’s dad was a pilot so I knew he had to talk for a bit. He left after we chatted and I went back to work. When he came back in a short while later he had a more stern look.
“A second building was hit. They say we’re under attack.”
The stock market has rallied for two days, with the S&P500 back at 1987 from its low of 1869. It’s still down 6.8% from its peak of 2130, set in May, (and nearly matched just a month ago) and down 3.5% for the year. It’s almost like the crash never happened, right?
Well, no. But there is a lot of good news for the underlying economy, some of which came in this week. The really good news is still out into next year, which is essentially forever to this market. We have to get over an interest rate hike, which will definitely come this year no matter what you read elsewhere, and a lot of jitters.