Sunday, August 9, 2009

Second derivatives

Second derivatives is about acceleration in classical physics. The second derivative of position is the force that accelerates you, in most cases gravity.

I am sick and tired of reading about positive second derivatives as a main economic indicator. As if there was the equivalent of gravity in economics.

Case in point, the jobs report. The number of jobs lost last month was less than the month before.

The optimist reading is that there is a positive force at play, there is an inflexion point: buy!
A optimist-pessimist reading says that we are losing less jobs, but we are still losing jobs: economy is still deteriorating (but less fast than last month): hold!
A pessimist reading says: the economy was in a bad shape and is now in a worse shape with less jobs to go around: sell!

Naive optimism and greed is what got us in the mess to start with. Endemic optimism is a strength of the american economy and it is also its achilles heel. This dictat of optimism where things always go up (no cycles) is un-natural, delusional. Problem is, as Nathalie once put it, that a political figure will lose the american public if you don't make them feel like winners. I think it is time the american public grow up.

4 comments:

Anonymous said...

What say about spring source at $450Mil. Considering that they can attract a higher valuation than you did in recession market. They outperformed you Marki...

Marcf said...

Let's look at it this way anon: I am a has-been, but what does that make you? a has-been hater? yuck.

Anonymous said...

considering that you were very vocal about them not having a good strategy and them copying you , It was apt for me to ask.

I don't really hate you. I do find you entertaining and educating

Bill Burke said...

Burr Sutter had a great thought on the Spring acquisition. Companies spend millions to obtain developer mindshare. Sun with Netbeans, Glassfish, really the whole Java stack. Adobe has poured millions into developing and promoting Flex. So maybe $350+ is worth obtaining the developer community...Lord knows they dont' have anything of substance over there.