I Love This Country!

The most intriguing presidential election since 1980 (2000 was arguably just as fascinating, though mostly after Election Day) happens today.

Finally—it’s safe to watch television without protective clothing.

Because everyone has something else on their minds today besides little ol’ BTW, I’ll simply note a bit of economic Americana that made me happy: More and more barges are using the Erie Canal. And you thought it was closed! I did. Says one small-businessperson and shipper: “The amount of money you can save is really eye-popping. I’m fascinated by the history of the canal, and I’m intrigued by how well it still works.”

Can shipping containers on the old canal be far behind?

As for tonight, I plan to spend it the way Harry Truman spent election night when he ran (as a heavy nonfavorite) in 1948: hole up, enjoy a ham sandwich and glass of buttermilk, go to bed early, and not listen to any returns until Wednesday morning.

Back on Friday, y’all.

Wrist Watching

Peruse the front section of The Wall Street Journal and you’ll soon notice something besides the articles on economic gloom. Namely, ads for really expensive watches.

How long has this been going on? Is this yet another party I’m late to? (Maybe I could use a new watch.) Whether it’s the funky, clunky ToyWatch from Italy (one of “Oprah’s Favorite Things”) or the custom-made Vacheron Constantin Quai de l’Ile from Switzerland, with its built-in authentication system that makes it supposedly impossible to counterfeit, “wrist candy” and “wrist caviar” are “hot” right now.

True, it’s hard to know what that “hotness” means—these aren’t timepieces the vast majority of people can afford. And with the demand for luxe goods falling (along with nearly everything else), four- and five-figure watches may not be on many must-have lists.

Even if I had the dough, it would be a bad idea for me to own a fancy watch. Like most members of my family, I’m a spectacularly gifted clod, and would certainly find some creative way to break the crystal or drop the thing from a great height. Both of my inexpensive but mildly stylish watches (a Fossil and a Swatch) have undergone waterboarding in the family washing machine. (Both survived the ordeal.)

Rather than allow a carefully crafted timepiece and its tourbillons and other complications to suffer such abuse, I think it’s best for everyone that I simply fantasize about owning one. Happily, a visit to a new Web site called The Watch Avenue, sponsored by a Swiss watchmaker consortium called La Fondation de la Haute Horlogerie, exists for just that purpose. There, the mostly female avatars with their stylish black dresses, sultry Swiss-French accents, and flirty hair-playing will allow let me be Euro-cool for a few dreamy minutes.

Given the economic indicators, dreams are all most of us will be able to afford.

Reasons to Not Be Uncheerful

As I write this on the morning of Tuesday, October 14, the Dow Jones Industrial Average has jumped more than 350 points. The day before, of course, the Dow posted its biggest point gain in history. And hey, there’s not a cloud in the sky!

No one should think that the worst of the current economic crisis is over, of course. The Dow is just one indicator among many, and not the most important one; many others don’t look too great. There are more gloomy days in the equities market. For all I know at 9 a.m., this day may end up being one of them.

Still, we should hope that the Dow’s performance (this week, so far) will help alleviate some of the overwhelming gloom and fear-mongering that dominated the news last week.

 

Some little rays of sunshine are peeking through:

• This morning’s column by the Strib’s Neal St. Anthony reports that small banks actually have money to lend—and are lending it, at least to established businesses that are making products that people want and need to buy.

• A report on Minnesota Public Radio yesterday afternoon told the story of a Minneapolis woman who received a mortgage loan modification from the once-dreadful Countrywide Financial (now owned by Bank of America). Her unpayable reset ARM has been reduced to a manageable 5 percent—at a fixed rate! The upshot: Banks realize it’s much sounder to simply let a strapped homeowner keep his or her house (so long as he or she can pay at a lower interest rate) rather than foreclose.

• Home sales in the Twin Cities were up 42 percent in September.

Though I’m temperamentally a little ray of sunshine myself, it also seems pretty clear that the economy is going to be flat for a few years. There will be no Great Depression 2.1. The feds and the Fed aren’t simply letting the banking industry collapse, and there are some safety nets in place that didn’t exist in 1929.

But there’s too much bad debt out there, house prices and the equity markets are far from stable, and there’s probably a tsunami of bankruptcies that’s just beginning to rise up. Credit is still crunchy, and probably will remain so for a while.

I suspect we’re going to experience this generation’s version of an economic That ’70s Show—not dreadful, but pretty cramped nonetheless. Young people paying off student loans will have a harder time getting off the financial runway. It will be difficult to start new businesses dependent on consumer discretionary spending. One’s house will no longer be a piggy bank. The Reagan-Clinton bull-market Baconator party is officially over.

But the pain will be worth it, if we heed its lessons: If we shed our pounds of debt and focus on what’s really good for us and for our lives. There’s been more than one kind of obesity epidemic going on.

My Mom Could Swing This Election!

OK, that’s a bit of a stretch. But she appears to be in the right demographic.

That is, you believe the voter-market research done by Arkansas-based market research firm Acxiom.

An article discussing Acxiom research in the September 15 Advertising Age (no link—it ain’t free on line) asserts that “those who’ll determine which way key states will swing aren’t as middle of the rode as you might think.” (Minnesota, Wisconsin, and Iowa are all considered purple.)

What do these purple voters look like? A few general traits:

• They’re older than either “red” (rock-ribbed Republican) or “blue” (would rather die than not vote Democrat) voters, more likely to be married, more likely than blues to have kids. Oh, and they’re mostly female.

• They get more of their info from TV and newspapers than from the Net.

• Most own their homes and live in the ’burbs.

• Perhaps the most fascinating stat: Their mean income is $53,435, about half of what blues earn but 40 percent more than reds.

Mom fits this profile reasonably well. She’s a little on the older side of the demographic, (don’t get mad at me, Mom!) and she’s distrustful of that bugaboo, the “mainstream liberal media.” She resides in a senior-oriented community just outside the Chicago suburbs.

True, Mom’s not exactly a swing voter. She’s a thoroughgoing evangelical-Christian conservative. (In her 1950s Chicago youth, she once went to an Adlai Stevenson rally to boo him. She might have made a good Brooks Brothers rioter.)

But despite her conservatism—or because of it?—she loves Medicare and Social Security. Her conservatism is more social than economic. Gay marriage and abortion are wrong wrong wrong, but government safety nets are fine (so long as able-bodied welfare recipients go out and get a job).

The other candidate for top swing voter may be a variant of (or even almost synonymous with) this cycle’s hot female voter—the Wal-Mart Mom. Caucasian, suburban or exurban, below the upper-middle-class line, trending older (mostly 40s and 50s), they are supposedly more “pragmatic than partisan.”

Mom’s partisan, not purple. But her peeps are on the march.

Why We Stopped Listening to E. F. Hutton

The recent disappearances of famous financial names like Lehman Brothers and Bear Stearns made me wonder: Whatever happened to E. F. Hutton?

Refugees from the Yuppie Era of the 1980s remember the commercials for the investment firm, where two dressed-for-success types are discussing where to put their money. One of the two says, “Well, my broker is E. F. Hutton, and E. F. Hutton says…” Suddenly, everyone around them stops and pricks up their ears. Then the voiceover: “When E. F. Hutton talks, people listen.”

E. F. Hutton long ago went the way that the likes of Lehman Brothers have more recently traveled. If you’re feeling sentimental (as I kind of am) about the departure of these grand old names in finance, a recent New York magazine piece provides a useful antidote.

For one thing, Lehman wasn’t really an august old firm dating back to 1850—only the name dated that far back. By and large, brokerages and investment banks aren’t particularly long-lived. They typically run out of gas, get acquired by a larger firm (sometimes getting spun off again—think of Piper Jaffray, which was part of U.S. Bank for a few years until 2003), or blow up thanks to the self-satisfied avarice endemic in this industry.

In the 1980s, several investment firms advertised on television. I don’t know if any still do, since I don’t watch TV anymore. (It’s hard to believe that any would have the money for commercials.) But the New York story made me wonder what happened to other 1980s firms like E. F. Hutton. Namely:

• Smith Barney. In my relative youth, I would mildly amuse friends with my not-quite-spot-on impression of the imperious John Houseman declaiming his catchphrase on 1980s commercials: “Smith Barney makes money the old-fashioned way—they uhhhn it.” The Smith Barney “brand” still exists, but it’s now part of the Citigroup empire’s Global Markets unit, along with another august (though somewhat tainted) investment name, Salomon Brothers. (Houseman, by the way, passed away in 1988.)

• Dean Witter. Catchphrase: “You look like you just heard from Dean Witter!” (Sung over the image of a grinning investor opening and reading his Dean Witter statement.) Later: “We measure success one investor at a time” (spoken by a what I always assumed was a fake “Dean Witter” in a fake old film clip, complete with fake scratches on the soundtrack and film emulsion). During the 1980s, Dean Witter was part of Sears, back when the retailer was seeking to become a financial services company. It split off from Sears (along with the Discover card) in the 1990s. In 1997, it merged with Morgan Stanley, and the Dean Witter name disappeared.

• Paine Webber. Originally Paine, Webber, Jackson & Curtis. Commercial catchphrase: “Thank you, Paine Webber.” It was bought by Swiss giant UBS in 2000, and is now known as UBS Wealth Management USA.

As for E. F. Hutton, that’s a complicated story. The heavily abridged version: During the 1980s, the firm was involved in all kinds of financial shenanigans, primarily rooted in a check-kiting scheme. The 1987 stock market crash hit E. F. Hutton hard, and the company merged with a name that should sound familiar: Shearson Lehman Brothers. The merged entity soon became part of American Express, which later spun it off. It soon became part of Smith Barney, which became part of Citigroup.

By then, the E. F. Hutton name had disappeared. People had stopped listening long before that.

On an other note: Interesting point about wages and health care.