Tuesday, December 19, 2006

Warning: Religion

I should be posting about the Fed, core CPI numbers and housing starts, but after spending 14 hours (so far) today working on the 18 files that all of a sudden materialized on my desk, I'm just going to point you to a post on my other blog about the True Meaning of Christmas - sort of. And the market didn't react at all, so maybe it's just as well.

I'm off tomorrow to Las Vegas to watch BYU destroy Oregon in the Las Vegas Bowl, so we're likely done with blogging until after Christmas, unless something truly amazing happens. Merry Christmas to you and to yours. Thank you tremendously for being my friends.

I Am Time Magazine's Person of the Year

No, really. I am. It's taken some time for them to realize just how important to the functioning of the universe I really am, but finally, after all these years, the light has been turned on at stodgy old Time.

Okay, so it's me and several million others. But as a proud member of the top 10% of bloggers on the 'net, I proudly accept the honor and am adding it to my resume. You should, too. Take a look.

And thanks for reading. I appreciate it.

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Saturday, December 16, 2006

Calling the Spirit of Christmas

A month ago we wrote in the Potty Post about how my family several years ago stopped putting tags on presents. To explain for those not on the mailing list for the Post, a few years ago we started getting worried about the tendency of our children - a tendency multipied manyfold by television - to concentrate all their energy on what they were going to get for Christmas from Santa Claus and their parents. We have a large family and knew that we'd be having more children than we had then, and we determined that we had to come up with some way for Christmas not to degenerate into a huge festival of greed.

What we came up with was an expansion on an idea my father had when I was a kid. Presents began to show up under the tree, wrapped in newsprint, with no names on them. When one of those presents was passed out to the family (my brother was always the passer), we would all stop and look to see what it was, and see if we might want it. It was pretty much always a book, but in my family that was a prized gift. If you wanted it, you spoke up, and there was a discussion, then someone ended up with the gift. Those presents were somehow different than the others. There was less chaos when those were being opened, and they were always surprises. So we thought, why not do that for all the gifts?

We tried it. The first year was very difficult. It was even hard for the kids to imagine how it would work - what do you mean, I can't put "From: Alexander To: Crispin"on the present? - but after a while it became clear that some important things were happening.

Right away, we discovered that we had to think much, much harder about what we wanted to give to others than we had before. Without the luxury of tagging the presents, the gifts had to tag themselves, that is, we had to give something so special and unique to the recipient that no matter who opened the gift, the recipient would know that it was for him, and - and this is the really hard part - he would also know who the gift was from. If that sounds impossible, don't worry. We thought so, too.

We also saw that our Christmas preparations began much earlier, because unique gifts have to be purchased (or more often, made) when the opportunity strikes, even if that's in July. Perhaps it was not a coincidence that Christmas Day itself started increasing in importance to the family, and becoming more and more special of a time. I'm not talking about the always-breathless stampede down the stairs to see what Santa brought (and yes, Santa still comes), but the part afterward, where we sit together and open our gifts. Now, instead of everyone grabbing his presents and opening them as fast as he can, the presents are opened one at a time, in some sort of rotation, and everyone watches to see what the gift is. You have to. What if it's for you? And Christmas morning started lasting until the early afternoon.

The gifts themselves also mean more, naturally, since they are worried over and thought about for months. This means the people that get those gifts also mean more. We love what we serve, and we love more what we work for. More love was being poured into the gifts. Once, we had no money for gifts at all. This made practically no difference. The kids made gifts for each other and for us, and that Christmas remains one of the most memorable of our family's history. The selfishness almost vanished. Instead of long lists of stuff the kids wanted, we had long conversations with each child about his siblings, and what they might like to receive. Instead of "I can't wait to open my presents", we heard "I can't wait until you open my gift to you!"

Last year, we went to a Christmas expo/festival kind of thing, and as we walked in, each of our children was handed a "Christmas list", with twenty or so blanks for writing in what they wanted for Christmas. On the reverse side was a list of what needed to be given to others. There were maybe four blanks. One of our children took this list, looked at it, and said "I'm supposed to want four times as much stuff as I'm giving to other people? What a waste of time," and threw the list in the trash.

It takes more of our time, and we have to be very involved as parents in what our children are giving to each other. It takes more time, sometimes a lot more time. We now have a Birthday Party for Jesus on Christmas Eve, which is an older tradition, but now we also have a family reading of the Christmas story from Luke 2 on our bed on Christmas morning - a tradition started by the kids themselves. Really. They came into our room and started reading the scriptures before they went downstairs to see their presents. We take all day opening presents. Last year, when Christmas was on a Sunday, rather than interrupt the gift-giving to each other to go to church, the kids decided to have that part of Christmas the next day, making Christmas a two-day event. It was one of the most amazing and magical Christmases imaginable.

It's possible that this wouldn't work for your family, and that we just have the sort of people it works well for. But if you could do one thing that would boost the Christmas spirit, the spirit of giving, by five or six times, wouldn't you do it? That's why we started. For us, it worked.

Friday, December 08, 2006

Hooray! More jobs! Oh, wait...

Strong job growth signalled to the markets that the economy might not exactly be getting ready to melt down altogether, which was bad for bonds but not good for the stock market, either, and guess why?

If you've been reading this blog for any length of time, you should know that the reason good economic news is bad news for the part of the economy most people care about - mortgage rates and stock prices - is that all news is interpreted through the lens of the Fed and what the data will mean to the Fed governing board and their likelihood of raising rates.

Since the Fed is terrified of inflation and a tight labor market means (in theory - BAD theory, but theory nonetheless) rising wages, and rising wages mean rising labor costs and rising labor costs means rising expenditures for business and rising expenditures are always recouped through rising prices (THERE'S where the logic breaks down, for those playing along at home), rising employment means inflation. Q.E.D.
Note: Q.E.D. is a Latin term meaning "I am WAY smarter than you."
Oh, but what happens if rising labor costs are offset by productivity gains? Like, say, what if you could conduct all your international operations by using Skype for free rather than paying AT&T several million dollars a year? Or what if the cascade failure in the price of flash memory allowed your employees to do 10% more work in the same amount of time? Or hey, what if allowing people to act like humans meant that they gave you 15% more productivity for the same money - or even that they were willing to be paid less in exchange for not being incarcerated in cubicle farms?

In short, this is a great economic model for the six thousand years of recorded history before, say, 1870. This is the period during which not bloody much was invented. It starts to break down about then, and by now, folks, even people like me that never went to school in economics can tell you that unemployment, which hasn't been above 8% since before I could drive, is a really, really poor indicator of price pressure. Productivity gains are being amde all over creation in practically every industry without the necessity of raising wages. In fact, if you include outsourcing in the mix, what you get is wage decline.

Basically, as one analyst put it this week (and I put it several months ago), the question is - who is right, the Fed ("inflation is attacking like Space Invaders!") or the global bond market ("if the Fed would just quit running about like Chicken Little we could get some work done here")?

Here's a hint. It's the bond market.


Wednesday, December 06, 2006

On Magic, Blogs, and Sealing-Wax

Beginning with the markets, which are flat, with the 30-year hovering between 5.875% and 6%. Let me again direct you to How Rates Move, which remains the definitive work on mortgage rate pricing. It's quiet out there and I firmly expect it to remain so for the rest of the year.

This morning (late last night?) Szent Miklos, known variously as Sinterklaas and sometimes even Santa Claus, brought stuff to fill the shoes of our family, placed on the hearth around our fireplace in anticipation of the visit of Santa, his horse Piet, and Black Peter, also known as Krampusz. If we were good, we got candy. If we were bad, we got sticks. All of us were very good, apparently, as Santa left us not only belgian chocolate but also tickets to the Las Vegas Bowl.

Christmas is magic, truly, but I wonder if there is anything fundamentally different about Christmas giving and other giving. Isn't all giving magic? All our children love and still believe in Santa Claus (our oldest child, Alexander, is almost 15 and is far from a stupid kid, but even he was totally bamboozled by the bowl tickets, which haven't been available now for almost a month), and we like it that way, but Santa Claus is not the highlight of Christmas in this house. He's sort of like a mysterious uncle that adds an element of magic to the proceedings. You never know what he's going to bring. Cost seems to be no object, though the gifts are rarely very expensive. Santa Claus is magic.

As mentioned in an article last week in the Lehi Free Press, I aspire to be Santa Claus. Not the jolly fat man in the red suit, necessarily, unless that's required, but the fellow in Miracle on 34th Street. Here's the quintessential: the little dutch kid (or, in the remake, the deaf child) comes to sit on his lap, and the mother says to Santa, "she's Dutch, she just wanted to sit on your lap", and Kris Kringle looks indulgently at the mother then turns his entire attention on the child and proceeds to have a conversation with her in fluent Dutch. What power that man had to make people happy! Is there something more wonderful that I'm unaware of? What if I could do that, too? Is this not the greatest of magics?
[Editor's Note: The greatest magic was performed by this Man, whom I truly aspire to be, but one rarely discusses that sort of thing in public, and almost never in the newspaper.]
It's a long, long way from where I am to where Kris Kringle is. He seems to have unlimited resources; mine are meager. He is always jolly and has time for children; I am often grumpy and too busy to direct all my attention on little ones. But he wants to make people happy, and I do, too. I want to do magic. At Christmas, I can almost see how I could. The veil, so to speak, is a little thinner. There's less of a gap between my workaday self and the me I want to be. Is it so for you, too?

This blog is almost 30 months old, now, which makes it one of the longest-running regularly-posted blogs on the web. I want to take a second and thank you for reading. It means a great deal to me - and is still a surprise - that you would take time to read what I have to write. I wish you'd comment, as well, if you wish to, even if what you have to say is not "polite". You aren't guests here; you're participants. If I say something foolish, you can call me on it and I swear I will not be offended. If I can't defend my positions, why have them at all?

Yesterday I went to a craft store to buy some sealing wax and a wax seal. The store had a tiny selection, ridiculously priced, and nothing in the letter J. I went home, Googled "wax seal" and immediately found a website that had hundreds of seals and a gigantic selection of waxes, all at roughly half the price of the craft store's. Magic, I tell you. Or as near magic as makes no nevermind. And don't ask me what the seal and the wax are for. It's a surprise.

Monday, December 04, 2006

Ahead of the Curve

My, how we like being in the forefront of things. Not that this is proof that we are, but still, we take pleasure where we can.

A couple weeks ago I posted my annual Give Thanksgiving a Chance rant, which generated far less discussion than I expected, but along comes Marginal Revolution, one of my favorite blogs (roughly half the blogs I read regularly are economics blogs, and some of them are of the highly technical variety. I don't know why, really. I had one economics class in college and got a C for lack of attendance), discussing the question of when is too early for Christmas decorations to go up. What agreement there is appears to be on my side, meaning right after Thanksgiving. Harry Rodas, a Raving Fan, argues (unpersuasively, to me, but you might disagree - read the comments) that retailers are simply making value-driven decisions about what to have up when. Harry buys Christmas lights in October and he's obviously not alone. Of course, I buy seeds and potting soil in October, but I have to go to the Internet to do it. Harry and I are both odd, for certain, but his oddity seems to more exactly coincide with the public's predilections than mine does. At least on this point.

Still, read the Marginal Revolution for data on why, economically, I'm still right.

Ten-month low on the 10-year-bond yield, meaning declining mortgage rates again. I am seriously quoting people 5.875% on 30-year mortgages (good credit, equity in the house, actual job, maybe even money in the bank). This is a serious surprise to me, and apparently also to the Fed, which can't seem to get any reaction from the markets now at all, no matter what it says. It's possible that the Fed is now so out of touch that investors simply ignore it. Remind me to finish and post my very long essay on why the information age destroys almost all the old methods of "controlling" the economy. Probably not today, more's the pity.

Friday, December 01, 2006

Shameless Self-promotion

Well, mostly shameless.

I'm on the front cover of the Lehi Free Press this morning. Not a bad article. Cathy Allred went out of her way to interview something like half the town for it, and other than being really sappy and way too complimentary of me, it's pretty decent coverage. We'll take it. Any article that quotes my wife - correctly - is okay by me.

And I'm a featured guest on Copper Rain's Coppercast podcast special edition, also from yesterday.

We'll be podcasting as well as blogging here in a week or so. Stay tuned.