Bear Flag Blog

We are living through a transformative time in business. Companies that have been around for decades - sometimes, centuries - are disappearing. When I graduated from business school seven and a half years ago, there were five large investment banks all recruiting sharp young minds to work for them. Now three of those five are gone. Companies whose presence has been a part of the business or retail world for years suddenly won't be ever again. Not to sound maudlin - these aren't people dying, and Circuit City was a bunch of assholes anyway - but the changes are coming thick and fast, and the world of the future will not be the world of yesterday.

At any rate, I've decided to keep track of these bankruptcies for my own interest, tracking just how many familiar names have closed shop during the great culling of 2008-2009. Not all of them will cease to exist, as it is possible to emerge from bankruptcy and live again (Ms. Fields cookies did so in 2008), but I daresay most are gone forever.

Today's victim: Gottschalks. (And Goody's, but they're not familiar to me.) Founded in 1904.

*Late Update - and I already have to add Nortel Networks, which also declared bankruptcy today...

The list so far:

"Skrulls can be hot. Because, you know, they're shape shifters. They can shift... shape..."

"You are such a nerd."

You know you've read too much HPL and/or played too much Call of Cthulhu when this sort of thing happens: I'm working with the iPod on, and the person singing says "The rhythm is the key", leading me to think idly "No, Yog-Sothoth is the key. Wait, what?"

I've been telling people recently that I expect the Dow Jones to climb to just shy of 10,000 by the later part of January, then to drop more or less steadily through June.

And when I say "telling people" I mean my wife and son. But she's a PhD economist and he's really bright for a three year old.

The reason for the increase is Barack Obama. I think the markets are putting in some optimism about his stimulus plans and about the return of competence to Washington, and the market and the nation will both get caught up in the inauguration celebrations.

The reason for the subsequent decrease is the underlying market fundamentals. Unemployment is going up, businesses are going under, and wealth is being "destroyed" at a fantastic rate. I think Obama's stimulus plans will help, but the time horizon on them is lengthy and in any case they're only an amelioration, not a solution.

There are two large uncertainties that I'm grappling with. One the one hand, I just don't see where the next wave of growth is going to come from. Based on historical experience I'm certain that it will come, but I don't see any new sectors or regions or anything to pin the title "engine of growth" on. And nothing says that something has to crop up in 2009 versus 2010 or 2015. Remember the 1930s, the 1970s. A fast turnaround is far from guaranteed.

On the other hand, there's now a giant pool of money sitting around doing nothing. People like myself - and people much, much wealthier - have seen the problems with the economy and gotten out of the market. That money wants to chase something. And if it starts pouring, or even trickling, back into the market, things will turn around.

Anyhow, there's my prediction. January 23, Dow 9,750. May 31, Dow 7,750. Beyond that? The future is cloudy.

Happy New Year!

Milk 8/10

This film is topping many critics' lists for the best film of 2008, and I agreee that it is in fact a very good movie. Sean Penn is excellent; all of the acting is superlative. The film does have a certain degree of one-sidedness, told as it is by Harvey Milk's friends; not that Dan White or Anita Bryant are any sort of good guys, but I would have appreciated some insight into how the average San Franciscan perceived Harvey Milk. I was also left intrigued by but without insight into George Moscone.

But when one's largest complaints are that a film is too short and should have done more, it's a good indicator of a good movie. A compelling story, well-presented, exquisitely acted, and thoroughly entertaining.

Gran Torino 8/10

Also a very good film. Strong, well-acted characters, compellingly presented. My major difficulty with the movie is a problem common to many redemption stories. Eastwood's character had a lifetime of expressing who he is, and now during the few days/weeks portrayed in the film he shows a side of himself that would have ameliorated or negated a lot of the cumulative problems - to whit, his relationship with his children - that he suffers from. I.e. he seems like a character handed a past at the start of the film, rather than a person who built that past himself. The person seen during the film is not the same person who would have created for himself the problems he's suffering from.

That said, some of the dialogue - particularly the blue parts - is laugh out loud hilarious, the characters are strong, and it's a highly enjoyable film.

Both recommended.