The Bottom Line

Are you Craving Some White Space?

Volume III Issue X – Friday October 19,2007

A monthly newsletter of financial commentary for our friends

The first Baby Boomer applied for social security benefits this past Monday according to the Social Security Administration. This is the first of 80 million Americans in the baby boomer generation that will be filing for benefits over the next several years. That is an average of about 10,000 boomers per day. For several years, insurance companies and financial planners have been gearing up for the greatest retirement wave this country has ever seen. This wave has the potential to change the cultural and financial landscape of this country in many ways. This begs a few questions. Will most boomers retire at age 62, 65, or even later? Will boomers be heavy spenders in their retirement? Will they continue passing significant amounts of money on to their children and grandchildren? Will they continue to utilize debt in their retirement years? The answers to these questions, though uncertain, will impact this economy in exponential ways.

In the heart of earnings season we are finding a mixed bag. Most mega banks, including Citigroup, Bank of America and Wachovia are reporting earnings that are down significantly over this time last year. On the other hand, technology companies such as EBAY and Intel reported strong demand and earnings growth. The DOW has reacted negatively to what it has seen thus far. Today, for example, the DOW is down over 200 points and is trading in the 13,600 range. With many more companies left to report earnings, it should be interesting to see just how long the tentacles of the credit market squeeze reach.

GM has struck a monumental deal with the UAW. UAW will take the reins of a pension plan that has been GM’s Achilles heel for years. To fund the plan, GM will make a one-time lump sum contribution. The plan has the potential to serve as a prototype for Chrysler, Ford and maybe even companies outside the automotive industry. Whispers suggest that UPS is in negotiations with the Teamsters on a similar deal. Wall Street can deal with bad news, if it is known. What Wall Street doesn’t deal well with is the unknown. So the resolution of these so called “legacy costs” has been applauded  with a brief rise in GM stock over $40 per share. 

Google is dominating the web. In the month of August 37.1 billion searches were performed on Google. The nearest competitor is Yahoo with 8.5 billion. Not only is Google generating traffic, they are also making money. Third quarter profit for the internet behemoth was up 46% over last year. While many companies are reducing their workforce, Google added another 2130 employees in the quarter. What makes them so successful? Is it more accurate search technology? Is it a catchy name that is easy to remember? I have another hypothesis that I will borrow from my pastor. One of the most unique things about google.com is the amount of white space on the page. The site is not flashy, not cluttered, not littered with advertisements in every corner. Could it be that Google offers a simple site as the antidote to a complex world? Could it be that even for a split second, Google offers a calm corner in the busy world that is the internet? Could it be that deep down, we all crave “white space” in a world of chaos? Whether you find it on Google in the middle of your day, or on the beach at sunset, or in your kitchen at sunrise, we encourage you to find some white space to catch your breath in a world that is just too busy.

Chad P. Wilson, CFP

Foundation Bank – a division of McKenzie Banking Company - 731-554-2423          

The above is strictly informational commentary and does not constitute any sort of recommendation. Please consult your own financial advisor for specific tax, loan, or other investment advice.