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Five Things for Wednesday, May 27


The "Cost" of a career in finance; socionomics of "working with your hands"; Crisis of the Real... again; return of the blue collar worker and much more.

1) The "Cost" of a Career In Finance

This morning I came across a piece in the New York Times decrying the "cost" of a career in finance for those hoping to manage family and finance, "Financial Careers Come at a Cost to Families." This article is a perfect illustration of the emerging social mood shift in action.

"Among elite white-collar fields, finance appears to be uniquely difficult for anyone trying to combine work and family," the Times observed. Well, that's probably true. But so is a career welding on the third shift at a production plant. The reality is that a shift in social mood has created a re-prioritization of family over finance.

The article cites recent research by Claudia Goldin and Lawrence Katz of Harvard which was conducted to answer the following question: which jobs offer the best chance at balancing work and family?

Of course, we knew a decade ago that work and family and careers in finance may not go together hand-in-hand, but the promise of a pot of gold at the end of the rainbow was all we needed to overlook the near-term difficulties of managing career and family. In fact, the appearance of this research in the New York Time is itself indicative of our shifting priorities. It is doubtful that such a study in 1998 would have garnered a mention outside of academia and the circles of social sciences.

As social mood has changed, risk appetites decreased, our time preferences with respect to family have shortened. This shift in time preferences will be a driving force in America both socially and in economic terms over the next decade.

2) Socionomics of "Working With Your Hands"

Continuing with the theme of shifting social mood and employment, over the weekend the New York Times Magazine took a look at the increasing desire among the newly unemployed to look for jobs that somehow involve "working with your hands."

"Many of us do work that feels more surreal than real. Working in an office, you often find it difficult to see any tangible result from your efforts. What exactly have you accomplished at the end of any given day? Where the chain of cause and effect is opaque and responsibility diffuse, the experience of individual agency can be elusive. "Dilbert," "The Office" and similar portrayals of cubicle life attest to the dark absurdism with which many Americans have come to view their white-collar jobs."
- "The Case for Working With Your Hands", Matthew Crawford

Crawford follows that opening parry with the following question: Is there a more "real" alternative...?

3) The Crisis of the Real Again Rears Its Head

Ah yes, The Crisis of the Real again rearing its head. This is part of a continuing readjustment that has profound consequences for society. What does a revolt against the displacement of the "real" entail? From a consumption standpoint it suggests a shift in focus, a change in patterns of accumulation and the valuation of material objects.

The proliferation of images, reproductions, the sheer volume and excess of signs, of choices, is itself a kind of inflation; information inflation. As with the Federal Reserve's inflationary policies, it is this information inflation that necessarily lays the groundwork for a profoundly deflationary revolt.

This secular pattern is evident in everything from clothing and textiles to automobiles, home furnishings, technology, media, and naturally, finance. This is the structural deflationary paradox where the excess of signs and choices, an inflation of everything, literally, creates the conditions for imposing limitations and regulations upon the chaos of apparent freedom.

Deflation is simply the market's attempt to unwind and dismantle the confiscatory dominance of the inflationary regime. Inflation in the purest economic sense confiscates money, purchasing power, control. In the philosophical and social sense, however, inflation confiscates something else that will increasingly be valued above all other concepts or materials: Time.

The battle going forward as we emerge from this deflationary unwind in both finance and information will be how to deconstruct and reassemble a reality that "makes sense." On the one side will be those who cling to the signifiers of the past, the reactionaries, those who aggressively fight against a fractured and non-linear reality, and those who choose to acknowledge and utilize it for new purposes. A hyperinflation is not a foregone conclusion anymore than a lingering deflationary depression (see number 5 and Marc Faber's hyperinflation certitude).

4) The Return of the Blue Collar Worker

The return of the blue collar worker should be a familiar theme by now. I wrote about this most recently back in January, "Five Things You Need to Know: Under TARP, Neither a Borrower Nor a Lender Be" (See number 5).

Several aspects of darkening social mood - insecurity, uncertainty and caution - will combine to help displace the dominant role that so-called artistic producers have enjoyed over concrete producers, all courtesy of a positive wave of social mood that has now crested and is in the process of breaking.

What does that mean? Think of it this way: there are essentially two types of producers, concrete and artistic; concrete = those who can increase their revenues by making more widgets, and artistic = those whose revenue is entirely dependent upon uncontrollable variables in valuing their work.

White collar work, in general, is heavily burdened with the economics of artistic production; its value determined by a myriad of variables that producers have very little control over. Consequently, as uncertainty and insecurity take greater hold over social mood, there will be a yearning for work that is based largely on the production of concrete, visible things.

Even in the face of deflation - and, ironically, a long-term contributing factor in perpetuating it - there will be a resurgence in the popularity of the blue collar worker, the producer of tangible items whose value, even if deflating, can be more easily discerned and relied upon in securing an income stream.

5) News & Weirdness

GM Talks With Bondholders Fail
- Financial Times
General Motors (GM) will likely seek bankruptcy protection on or before June 1, the government's deadline for meeting the conditions for financial aid.

Faber Says U.S. Will Enter Hyperinflation as Fed Reluctant to Raise Rates- Bloomberg
"I am 100 percent sure that the U.S. will go into hyperinflation," Faber said. Really? I've never been 100 percent sure of anything in my life. Maybe it's a genetic default.

Soylent Green Comes Under Earn... What? Oh, Right. Sorry... Not Soylent Green, But Monsanto Under Earnings Pressure - WSJ
Monsanto (MON), the world's largest eugenics company, said earnings would be at the low range of expectations this year because of "stronger-than-expected competition." If you think about it, this is kind of ironic because wouldn't "stronger-than-expected competition" possibly mean (whispering) genetically superior competition? Hey, I'm just asking.

Mafia Cash Increases Grip on Unraveling Italy Beyond Berlusconi's Control - Bloomberg
"Unlike overleveraged companies burned in the credit crisis, the Mafia and its cash-based, debt-free business model are breezing through economic hard times."

I spent my whole life trying not to be careless. Women and children can be careless. But not men.

Source of Stock Market Rally Discovered - Press of Atlantic City
"A Morris County woman broke the world record for the longest craps roll in gaming history Saturday night at a time of four hours and 18 minutes at Borgata Hotel Casino & Spa.

Patricia Demauro, of Denville, bought into a game for $100 on a table adjacent to Borgata's Poker Room at roughly 8:13pm, and quickly amassed a crowd of supporters, comprised of Borgata associates and customers, who cheered her on. When she eventually sevened out at approximately 12:31 a.m., after 154 rolls of the dice, she was greeted by Borgata with a champagne toast and applause from her new fans."

Borgota is owned by Boyd Gaming (BYD)
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