Posted by: Michael George Daniel | November 8, 2007

Three Apples

Standing in the driveway having a catch with our eight year old, I heard a plop on the ground and realized it was a frosty apple dropping to the ground from a nearby tree. There are several apple trees around the property, remnants of an orchard. In fact, the street is named after the orchard. The trees still produce apples, although they have not been pruned, so the production of fruit is not optimal. Until this year, we have not been taking advantage of the apples. My wife listens to a radio show on the Wesleyan University’s public station. Recently the host admonished his listeners to take advantage of apple trees. It is a surprisingly simple thing. We harvested the apples we could find, and set about learning to prune the trees to encourage better production. I’ll report back next year about our success.

When I got to the office, I noticed a pleasant, fruity aroma. It is a one room office, not very big. A bag with three apples is on the shelf from last week. I took them out of the bag and examined them, putting them on the front edge of the desk so I could see them and be reminded to eat them. Why am I reminded of apples today?

Yesterday, the stock market plunged three hundred points, a seeming confirmation of the folks and bloggers of the mind that our economy has been expanding without any real underlying value; a bubble that will burst just like the internet bubble and others that I will leave to the historians to recount. The history is important. We need to pay attention to it, because it will repeat itself. I have an intuitive belief that the bubble-sayers are right, that there will be a bursting of the bubble. It might be worthwhile to compare this prediction with a the more palatable vision of a simple letting of the air out of the bubble.

Of course, I nor anyone else can say what is going to happen. From my limited expertise of the markets, it seems pretty clear that markets struggle to grow upwards usually, in fits and starts, notches and humps, trends and corrections. Is also clear that they tend to go down a lot faster than they go up. So a compromise approach might be to say that the letting out of the air of the bubble will occur in rather loud, farty bursts of air. Imaging holding a huge balloon that you want to let the air out of. You have two fingers around the neck of the balloon and periodically release the pressure to allow a quantity of air to escape; then re-pinch.That’s my vision for the stock market. Some of the releases will be quite substantial. There will be some blowing up of the balloon in between some of the releases. But the one inescapable fact is this: it is still a balloon.

Which raises the question, what is real? There is plenty of information out there, some of it sort of comes out in metered doses, to counteract the bad news. Here’s an example. On the cover of Investor’s Business Daily today, the #1 short headline out of IBD’s TOP 10 is “Stocks Plunge In Broad Sell-Off“. Right underneath that is “Dollar Falls On China Comments“. So far, a bad news day if I’m reading this right. #3 is “Cisco Tops Q! Views, Q2 Just Shy” Now that’s encouraging. I think. Well, is it really? Obviously this is good news about a big company, a paragon of the current paradigm. So, depending on your perspective, this is mostly likely good news, but less so for those who understand the need to break from the old paradigm.

I think there is a relationship there, between the old paradigm and the news about Cisco. Many of us are probably invested in Cisco on way or the other. My belief – that any company declaring glowing good news is probably, legally, deferring some bad news for another quarter. Maybe next quarter? Did you ever notice that CEOs like news to be pure. If it good, let’s just give the good, but when it’s time to let out the bad news, then lets take all our lumps at once and get it over with. Usually, this is perfectly legal. But of course, not always, as we have seen with th Enrons, WorldComs, Adelphias, et al.

This managing of the news, managing of reality pervades the entire culture. It is done with the economy. Think about our reliance on oil for just about everything. Think about oil at $100 per barrel. Talk about a psychological threshold. Whew! So in a way, yesterday is preparation for this threshold. It is the pre-selling before the real selling. And meanwhile you will hear that everything is okay. Inflation is tame, the weak dollar improves the trade deficit. But don’t forget, it’s still a balloon. The value of real estate has been over inflated, and many people have taken out loans against these inflated values. What happens to the whole structure if real estate prices fall? Balloon. Well they have fallen. Frrrrrmmppphh. Let some air out. What’s next? It seems pretty clear the stock market is next.

#4 on IBD’s TOP 10 is “Oil Tops $98, But Closes Lower“. I love that, “but closes lower’. Yes, it will rise and fall. When it goes down the balloon makers will point to it and say, “see, it’s going back down”. Just like the minimization of climate change issues based on the current hurricane season. But it is immoral to ignore the lack of solid underpinning. It is immoral to mislead investors. It is immoral to leave out half the news. I know, I know, there are vast gray areas and everybody loves to hide in them. But for me, I think we need to look at the footings. From where I sit, they are getting a bit shaky.

There’s other interesting news to juxtaposition with the above. My friend, Justin Good, an Eco-philosopher in Connecticut recently ran for First Selectman of his town. He lost to the republican incumbent. Justin was propelled into candidacy by a sewer issue. There was a problem and the standard solution was the expansion of the sewer system. Justin and his gang realized there was a much less expensive, infrastructure intense solution that offered a lot of benefits that typically don’t get a lot of attention; it retained ground water, it did not open the flood gates of economic development, it created less town debt. In promoting this solution, they met with a lot of resistance from the local Water Pollution Authority and the Selectman’s office. They found that there was a remarkable alliance formed between existing government and the corporate interests surrounding the conventional sewer solution. In a public referendum, after what seemed to be a good run at this well-thought out alternative, a large contingent of voters came out and voted for the conventional solution. There are still a lot of people out there that aren’t interested in alternatives. Get it over with, this is how it is done by everybody else, this is how we will do it. It’s too bad. The conventional solutions aren’t working. We are building a house of cards on a decimated earth. It is immoral to take away the minimum needed for other species and other generations to survive. The conventional answers are part of the that paradigm, and they are not working.

On the other hand, the cover of the Hartford Courant ran this story: Green Light from Voters, History Written in Windham with Election of Third a Party Candidate, a story about the first election of someone from the Green Party to a major municipality post in Connecticut.

How do you like them apples?

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