Watch This Space - How a Recruiter Sees the World Today

I have an interview coming soon with Diane Plymale of Convergence, Inc (www.conv.com). Convergence is a recruiting agency and Diane will provide some interesting insights into the current recruiting environment. In addition there will be some how-to advice for finding good candidates or being one yourself. Check back in a couple of days.

You may also want to look in again on a recent interview with Gino Maccaroni to get a career consultant's view of investing in IT.

http://capcom-it.blogspot.com/2009/03/investing-in-information-technologies_07.html

When GroupThink Drives the Narrative

I wish I had the time - or maybe I'm just not smart enough - to disassemble conventional wisdom like some people can. But then, maybe I'm just lazy.

As a former member of the media (yes, I was actually a paid newspaper reporter back in the day) I can testify to the truthfulness of the assertion of GroupThink in the media. I saw it every day in the newsroom.

The linked article has some interesting things to say about GroupThink and the recession. Let's use one example - "It's the worse economy since the Great Depression". Uh, except that it isn't. It may be worse that 74-75 (may, not is) but it's not as bad as 81-82. I was there.

But Rex Hammock thinks the GroupThink of the media scrum may be changing its narrative. As my hero Glenn Reynolds says, read the whole thing.

How am I doing - Parte Tres

Okay, time for another snap quiz. Originally, I predicted that the US stock market would come out of its tailspin in mid-Q1 2009. I later amended that to the end of the first quarter. In mid-March the major indices started to reflect a significant rally, which went into full rocket mode on Monday, March 23.

So it looks like I had the trend but I was off by a few weeks. Now I'll put another marker out there and you can come back later and laugh at me.

The markets will slowly improve over the next few weeks, into late April or early May. Then there will be a major pull back that will last until mid-summer. Then in late July or early August, the real market recovery will begin.

Why do I think this? Well, historical trends would predict this but looking backwards, historic trends are driven by actual facts on the ground. In this case, the federal government has finally finished creating the structure under which the maladies caused by the collapse of the housing market bubble. The public-private plan will begin to remove the toxic assets from the banking system which will rebuild the foundation of the system.

All of this will take time, a long amount of time. I have told friends that this downturn will last a relatively short amount of time - say until early 2010 - but the emotional effects will last a generation. It will take five to ten years before the average person will trust public markets. It is likely that my children will not be comfortable in the markets for a long, long time.

Some other time, I may wax philisophic on what an historic opportunity this moment in time is for investors - smart investors. But that is a useless digression within this post.

For the moment, my adjusted prediction is coming true. Let's see how the rest goes.

Doing Less with Less

Now here's an interesting idea. I'll admit that I'm one of the kind of managers who tries to do more with less. After all, isn't that the challenge executives are always placing in front of us? And yet ... and yet ... the author of this article asks a very interesting question. When times get tough and budgets shrink, maybe it's time to pull in your horns, take better control of your operation, cut costs and improve efficiency and effectiveness. Then when growth returns -- boom! -- you're good to go.

I'll Buy the Drinks

Here are three video clips from CNBC's Squawk Box show on Friday morning of March 21. It's a long interview with three hedge fund giants and it's one of the best television interview and discussion sessions I've ever seen. I wish I could buy these guys dinner and pick their brains for an evening.

www.cnbc.com/id/15840232?video=1066966626&play=1

www.cnbc.com/id/15840232?video=1066940681&play=1

www.cnbc.com/id/15840232?video=1066957901&play=1

The Law of Unintended Consequences

There's an old joke I use frequently and it goes like this, "There are three great lies: the check's in the mail, I'll respect you in the morning, and I'm from the government and I'm here to help."

One of the primary markets of my employer is municipal waste water treatment facilities. We had (as in, used to have) a pretty good order book for April of 2009 but that has evaporated. Inside the business, we're hearing that it's the federal stimulus package to blame. Once the states and municipalities (our customers) knew federal money was coming they put our projects on hold until they can get the stimulus money in their hands.

We're shutting down the main plant for two weeks in April because of this.

I certainly don't feel stimulated at the moment.

How am I doing - Part Deux

Here's my second self-report card on my economic predictions as I amended them in early February 2009.

"My prediction for a market move starting in mid-Q1 2009 was wrong. It is now mid-Q1 2009 and the Dow is, in fact, still declining. I'll push this out to the end of Q1."

It seems like I got close on this one. The market has been in a week-long rally and only today is it seeming to make a correction, which is probably mostly profit taking from the rally. There are many indicators of macro economic improvement although we have an awful long way to go to pull ourselves out of this hole.

"The return to growth will be weak at first (maybe 1 percent in all of 2009) but will pick up speed in 2010 as the Federal Reserves money printing takes hold. (I just looked at the Monetary Base numbers for 2009 and the almost-no-growth line up until August 2008 has been replaced with positively explosive growth since then. The Federal Reserve was truly asleep at the wheel regarding the Monetary Base this year --- but at least they seem to have awakened now."

http://research.stlouisfed.org/fred2/fredgraph?chart_type=line&s[1][id]=BASE&s[1][range]=5yrs

Check out this link from the St. Louis Federal Reserve. The monetary base grew explosively from September 2008 into January 2009. Then the growth of the base trailed off, increased again, and is now trailing off again. I wish I had enough insight into the Fed's activity to understand why they let MB decline at all but they did.

Also, for what it's worth, I'm having trouble getting a link to the monetary base velocity charts on the Fed's web site. I can say from memory that the velocity was declining substantially in late 2008. This tracks with the common view that the Fed is pumping out money but the banks weren't lending. From memory, the velocity picked up substantially into February and March. When I can get the link to work, I'll come back and edit this post.

Without the velocity (the lending by banks of the money they get from the Fed), all the Fed pumping won't do any good. That's the wild card in my thoughts on the macro economics of this recession.

Finally, the prediction I didn't publish is that the US unemployment rate would grow to 8.5 percent. I write this only to show you how painstakingly honest I am. I could have ignored what will obviously be a bad call. At this writing it is 8.1 percent and only a fool will say it won't go higher. I'm guessing 9 to 9.5 and I'm hoping for nine. Many in the pundit class are talking double digits but I'm not sure how they get to that number.

So, I'm pretty happy with my revised prediction. I think the market will continue the rally in fits and starts through April, then will decline again before finally going into bull territory in late 2009 as the growth becomes evident going into 2010.

Let's see how the adjusted prediction pans out. Oh, and I need to work out a better way to keep a scorecard on myself. Wish me luck on that one.