Banking

The tech news is good from here

Techs need to keep up with tech news. We need to know what new products are coming out and what trends are showing up in the way technology is being used. Several tech news sites have recently reported that the recent financial results from most of the leading tech companies were surprisingly strong. Why is that a surprise?

Like many of you, I am a computer technologist. I spend my days managing networks and servers and routers and switches. I enjoy my work, especially when the network is running smoothly. It is often challenging, like when something complex doesn't work as it should. But overall, it is a great career.

I've been doing this for thirty years now and claim the title of senior network engineer. That's not because I'm the top technologist, but because I'm almost a senior citizen. My actual title is IT Manager, so I delegate a lot of tech work to others. The consulting work on the side keeps the hands-on tech skills current.

Keeping up with tech news

In order to keep up with the industry, I read a lot of tech journals and visit tech news sites. Over the years, I have been puzzled and amused by the focus of some of these stories. Reporters and columnists who watch the big technology companies are always trying to predict the financial future of the industry.

They like stories that open with questions like, "Can the U.S. tech industry continue to defy the overall economic downturn?" The reporter answers, "Leading IT companies say the weak economy hasn’t dragged down their global sales of everything from chips, software and storage devices to cell phones and online ads."

Tech Republic - Tech news

As Jason Hiner pointed out in his post last week, the numbers from all but one of the top tech companies came in surprisingly strong. He also wrote previously, "Even though we’re supposed to be in a recession in the United States, there was a lot of good news reported, led by Google and IBM."

Jason, who is the Executive Editor here at Tech Republic, is at Interop this week, talking to the techs who sell products to techs like me. I appreciate being able to read and listen to Jason's podcasts from Interop. So far, I don't get the impression that there is any doom or gloom in the industry over the state of the economy.

My own tech barometer

Tech journals and tech news sites earn their living by selling ads. They deliver readers to advertisers and ads to readers. Headlines and lead paragraphs are written to get you to read the story and may not necessarily reflect the true state of things. Throw in a few debatable phrases and you're guaranteed a few more readers.

From where I sit, there is no economic downturn or weak economy. Recession? Sorry, I haven't seen it yet. What I do see is inflation and lots of it. That usually means demand is high and resources are scarce. I am going to be replacing a dozen servers and fifty workstations in the next year. Should I expect prices to go up?

20 comments
bdweiner
bdweiner

I judge the recession by how many applicants there are to an advertised job opening. Staggerly high. And I judge by the empty stores that can't get filled and the number of businesses that opened during the Clinton years and have recently closed, a lot. I work in a retail outlet that used to sell all kinds of high tech including PCs. Sales have been dropping and most of our customers are only interested in the least expensive machines, in other words, PCs that really can't run Vista. I'm glad your economic outlook is so bright. But as a member of the middle class (and dropping) it's getting harder and harder. And in case you are wondering, I was definately better off 8 years ago, than I am now.

jorge
jorge

That's because big tech companies sell their wares and services overseas. With the dollar being so low, overseas companies are snapping up bargain software and services from US companies, compared to what they paid for a few years ago. Recession is here. If you're fortunate enough to work for a company with strong overseas sales, consider yourself blessed.

jgruber
jgruber

A recession is two consecutive quarters of negative GDP growth. That has not happened yet. The "recession" was manufactured by the liberal media in a lame attempt to sway public opinion and get a Democrat elected to the Whitehouse in November. Regardless of who wins the presidential election in November, Democrat or Republican, mark my words -- the so called "recession" that was created by the liberal media will quietly go away and the new articles about a downturn will disappear!

SysAdminII
SysAdminII

It might not be a true recession yet, but I know I am paying out the ass for gas and groceries and I am sure others are too. I am 100% positive that it's going to affect GDP at some point. When they start rationing rice (which they are in my area and I live in the heartland) it's hard for me not to believe I am not seeing the beginning of a recession. I am sure they are some nay sayers out there and say we are just seeing gas prices like they do in Europe, but guess what.....I don't live in Europe.

$dunk$
$dunk$

As the commercial says, you can make statistics say with 90% certainty anything you want 50% of the time. The fact is that there are more ways than one to have a recession. If GDP went up 0.9% but the countries buying power dropped ten percent, does that mean the economy improved? Point Blank -- You're an idiot if you think it means we improved. This is what has happened in the US over the last 4 years. They managed to hide the problem with band-aids, but the band-aid doesn't fix the wound it only hides it until its too late to fix it. When the press is talking about a recession, they are referring to the country as a whole becoming worse off each quarter. It is very real, large layoffs have been happening around the country, our buying power is dropping by the day, and its' just the beginning. Good for you if your region hasn't gotten hit yet. Unfortunately, it is coming.

$dunk$
$dunk$

From the NBER (National Bureau of Economic Research)official website. [i] Q: The financial press often states the definition of a recession as two consecutive quarters of decline in real GDP. How does that relate to the NBER's recession dating procedure? A:: Most of the recessions identified by our procedures do consist of two or more quarters of declining real GDP, but not all of them. Our procedure differs from the two-quarter rule in a number of ways. First, we consider the depth as well as the duration of the decline in economic activity. Recall that our definition includes the phrase, "a significant decline in economic activity." Second, we use a broader array of indicators than just real GDP. [B]One reason for this is that the GDP data are subject to considerable revision.[/B] Third, we use monthly indicators to arrive at a monthly chronology. [/i] As I was trying to say, you can still use the simplistic rule of thumb (2 consecutive quarters definition) because that's all most people can comprehend, but the REAL economists recognize that there's more involved than a highly manipulated single GDP figure.

DJL2
DJL2

I'll stick with the standard definition of recession that's been used for decades by economists, thank you. Not for simplicity's sake, but for consistency. I'll let others add in all the other economic nuances in order to advance their own agendas (i.e, spin). Moderate inflation is normal, and is the sign of a healthy, expanding economy. It's never been calculated into the GDP figure before, so why should it be now? Just because inflation is a little higher than normal?

$dunk$
$dunk$

Also, so predictable that one dismisses an entire argument based on something that had nothing to do with the points being made. (The idiot remark was just side commentary). If you are going to base your facts on statistics then you have to know what those statistics mean and when they are and are not valid indicators. The traditional GDP number has absolutely no validity in our current environment. In high inflation (which we really do have, despite the governments' manipulation of the indexes to say otherwise)the GDP does not reflect reality. When germany was seeing their enormous inflation before the war, was their GDP going up 100 or 200% per quarter. Hardly...things just cost more. When a person bought something for one mark, that added 1 Mark to the GDP. When the same person bought the same thing for 10,000 Marks a few months later, the GDP went up another 10,000 marks for that quarter. Did the real GDP go up 10,000 percent? I don't think so, but if you are using GDP as your sole basis then one would think the economy was soaring. Getting back to our economy. GDP is supposed to be a measure of the growth in output of the country. In normal circumstances it is a pretty good ballpark indicator. So on the surface, when they report a 1% gain in GDP it seems like output went up. However, this all breaks down when inflation enters the picture. For example, if inflation has caused prices to go up 5% then in fact that means production has dropped 4%. Thus, the REAL GDP is -4% not an increase of 1%. You can use the simple-minded rule of thumb definition of recession or you can use your brain and a little common sense to know the real picture. Whichever works for you.

DJL2
DJL2

So typical...resorting to name-calling and a new definition of recession to try to make your case that we are in a recession. Do you work for the press? I'm not going to argue that we're not seeing an economic slowdown. There's no doubt we are, and these things happen in our free market system. And the last thing you want to do in this situation is raise taxes on the rich (i.e., employers). Now THAT's something only an idiot would do ;)

RocketEng
RocketEng

We're on our 3rd record year in a row. Having trouble hiring, cuz everyone that wants to work already has a job. Dang media's not helping America one bit with their blatantly biased "reporting". That's ok, though, cuz most folks lump 'em in with weather predictions: always wrong!

network admin
network admin

Thank you! This is what I have been saying since the whole thing started. It was nothing but media hype for political reasons. *APPLAUSE* Finally, someone who agrees!

DJL2
DJL2

Absolutely the truth. Every election year when there's a Republican in the White House, the liberal press starts talking about how rotten the economy is, putting fear into the public's mind. This devious, destructive action alone is enough to create a recession, but to them, the end justifies the means. The press had already made it "official" that we are in a recession, even badgering Bush for not calling it a recession. Guess what? The GDP numbers came out yesterday. We are still NOT in a recession. Contrast today with the election year 2000. Bill Clinton was the incumbent, and even though the tech bubble had just burst and millions were left holding worthless stock/stock options, there was nary a word about a possible recession within the main stream media. In fact, Bush was the only one talking about the approaching economic slowdown and the need to cut taxes. Then sure enough, Bush walks into office in January 2001 and inherits the Clinton recession, with all its devasting job cuts (I know people who left IT never to return during the early 2000's). I think Fred Thompson made the liberal press bias very apparent when they asked him what he was going to do about the "rotten" economy and the need for more jobs. He stated that "We're at 5% unemployment. That used to be considered FULL employment. What more do you want?" I distinctly remember learning this in Economic 101 in college as well. Even today, unemployment is still at 5.1%

DJL2
DJL2

The unemployment rate I mentioned is not based on those who applied for unemployment benefits (though sometimes the press also mentions this number as well). It's based on a stastical survey conducted by the Labor Department. This article just came out today. Things aren't looking quite as bleak as the democrats would have liked. http://biz.yahoo.com/ap/080502/economy.html?.v=10 From today's article-- "The seasonally adjusted overall civilian unemployment rate -- 5 percent in April -- is based on a survey of 60,000 households. It showed that 362,000 people said they found employment last month, outpacing the number of people who couldn't find work."

DJL2
DJL2

There's a solution for those living in areas with no job opportunities-- MOVE. I graduated from California State in the early 90's into what was later analyzed to have been the state's worst economy since the Great Depression. My wife was a new nursing school grad and couldn't even get a job in Sacramento (nor could anyone else in her nursing graduating class...you want to talk about bad, imagine THAT!) We finally picked up and moved over 2,000 miles to a city/state with job opportunities. It wasn't easy or fun, especially with a new-born infant and no near-by relatives whatsoever. But we did what we had to do and it paid off hugely in the end. We certainly didn't sit around and wait for the government to help us.

network admin
network admin

We need to remember there are states (like my home state MI) that are well above the national unemployment rate. With all the jobs leaving and the auto industry falling, there really isn't anything left. The people who have jobs are holding on to them, the people who don't are in trouble. Its a rotten economy for them. Then there is the flip side. Where I live people are mostly concerned with rising gas and food prices. Not too many people who are worried about their jobs. We are lucky! Great post!

catseverywhere
catseverywhere

The only problem is "unemployment" is only the number of people on benefits. Around here a lot of folks have fallen out of the bottom of that deal, they are not included. I think "globalist" and "unAmerican" are better handles for the media. I also don't think it doesn't matter a lick who gets elected, they answer to something other than "the people."

tmalonemcse
tmalonemcse

I read tech news from many websites each day. Recently, a bunch of stories came out about how surprisingly strong the sales figures are. From where I sit, the news is good. Demand is high. Unfortunately, we are seeing inflation here in the U.S. I expect prices to go up. Read the post: http://blogs.techrepublic.com.com/techofalltrades/?p=146 I am not an economist or an expert on what causes inflation. I intend to replace a bunch of servers and workstations this year. Should I expect to pay higher prices for the technology I will be buying? If not, why? Does inflation affect servers and PCs?

rxmillered
rxmillered

Inflation is a hidden tax on the working class to cover the future cost of inflated printed money. So, if my company gets a corporat bond to buy a server and expect to see an ROI in three years; the inflation has to be added to the company's future of lesser value in the paper revenues. Since the company can't raise its fees, the future value cuts into the ROI (Return On Investment). With inflation, there is less money for future projects or for upgrades due to the increased investment risk involved. Also, a higer ROI is required by the lenders for the risk. Example: I sold my tech stocks weeks ago, re-invested in Gold related stocks and make 9% in a month. To stay in business: The company will just offer your IT staff 15% less for your services today to cover 4% yearly inflation over 3 years. So, the company breaks even, the bank coves the risk, and your IT staff just gets less. It all worked out even. If you watched Bloomburg this Monday, where China "strongly reminded" Obama that he must cut the existing debt and if you followed the upswing in gold and copper; we can expect inflation to move up. No problem, we can just pay workers less and it all works out even. Maybe you remember the early 1980's? The present US currency is the fourth paper currency since the US was founded. The last three US paper currencies were used for years, then suddenly hyper inflated within months and became worthless. Another case may be (and nobody can predict this) that we see double digit inflation for a long time. Inflation is something every consultant needs to plan for if they expect to be around. Nobody knows when it will hit. My advice is to just watch and creat a backup plan (like any good IT guy would do) for your currency. This inflation business is very serious. Think of it as your server farm only having one electrical source, no backup UPS with some big storms on the horizon. Maybe the storm hits, maybe it doesn't. What is in your backup plan? (pun on a credit card advertisement)

catseverywhere
catseverywhere

What do Abe Lincoln, James Garfield, William McKinley, and John Kennedy have in common? (as well as Andrew Jackson who survived 4 unsuccessful attempts on his life...) Hint: http://usrarecurrency.com/1963$5UnitedStatesLegalTenderNoteSnA51298086A.htm Read the top of that note and compare to what you have in your wallet. The federal reserve is neither "federal" nor does it have any "reserve." It is a private, for profit corporation, almost entirely foreign owned. The above presidents took steps to return the money to it's rightful place, the treasury, as the property of the people. If you simply did what Kennedy last tried, there would be no need for any taxation. One of the former IRS chiefs actually said so in an interview in 1950. There does not have to be any gold or silver backing, the notes should represent the volume of goods and services available, and be a transparent means of exchange. That said, "inflation" is the simplest thing in the world to understand, but your media twists it up with BS tighter than the sun's magnetic field at solar max. Inflation is nothing more than the creation of more federal reserve notes, whether paper notes or digital computer entries. To simplify, assume there are two people in the world. Magically there's 100 "dollars" in existence and the two agree to accept them. One fellow makes all the food, and to cover his expenses he accepts 20 of those notes from the other for the other's annual food supply. If those notes have any intrinsic value, what happens if you suddenly create 100 more out of thin air? 100 "dollars" more of goods and services has not been created. But if one person just happens to end up with all of those extra notes, it appears as though he has greater "buying power," he could easily afford twice the food, without having had to produce and equal amount of new goods or services himself. Basically, the "value" of the money as been diluted by half in the above example. The second user of the money, the farmer selling food for example, is going to see this dilution of the money supply and is not going to stand for the first user getting away with doubling the money supply, all in his own account, and for nothing of value added. He'd say "hold on here, with more of those notes in circulation, that you just made out of thin air, I'm not taking 40 of 'em for two year's supply of food, you don't get something for nothing, you'll give me 40 of 'em for the ONE year supply..." He is going to raise his prices, because it is fact the intrinsic value of those notes has been diluted. ...IF they have any intrinsic value. The fed admits the "intrinsic value" of their product is that you believe in them. Your money is backed by the same force that created Tinker Bell and the Easter bunny. Of course there are massive complications in the real world, but after years of studying this, I conclude most of those convoluted "realities" fall in the "smoke and mirrors department," to keep you and me intentionally befuddled and in the dark about the underlying fundamental: the fed is a giant rip-off scheme, and unconstitutional to boot... (but... erg~ bite.. tongue..) The "first user" of the federal reserve note is the fed itself. And they create "money" out of thin air, then tell you that YOU are owing them the face value. Neat trick, wish I'd thought of it! e.g.a 100 "dollar" note costs the fed 4 cents to produce, then they "loan" it at face value and claim you owe them 100 bucks. Insult to injury they claim you owe 3% interest as well. (btw the fed collecting "interest" is a mathematical impossibility, but that's a whole 'nother topic) Now ponder: for ten years there was no money anywhere, the so called "great depression." But lo, all of a sudden WWII comes along and there's more money than the world had ever seen before? Where did it come from? They made it out of thin air, when it suited the international bankster's needs. (which tells you they wanted the war, and they most certainly did!) http://www.sacred-texts.com/mas/md/index.htm "M3" was the total amount of federal reserve "credit" in existence. I say "was" because right after 9-11 the fed stopped reporting this number. Why? Google "helicopter ben" for an eye opener. The plan was to "inflate" out of a pending crash, but all they are doing is prolonging the inevitable. This next fellow linked below was asked by Ezra Pound to look up specific documents in the library of congress. (he was one of the librarians) When he found them, it became clear what the game was and he published this: http://www.apfn.org/apfn/reserve.htm G. Edward Griffin plagiarized the book and called it "the creature from Jekyll Island. Mullins didn't copyright it because he thought it was too important and should circulate freely. (is it ever!) Anyway, business is up for some because the "USD" is becoming less valuable, due to "inflation" i.e. they are cranking the printing press. The lesson of Wiemar Germany is one Americans should review right about now. The only reason our "money" has not inflated to wheel barrow-load worthlessness is because the fed cleverly erases money almost as fast as they create it. It's called "personal income tax." That tax is precisely a check on their funny-money going bust. Where I sit people are desperately trying to sell SUVs and big homes. I know people who are facing the decision between food or gas on a weekly basis. Meanwhile, everything you hear on the news about what is being done to "fix" the "credit crunch" is a lie. They are in fact bailouts for those banksters that put you and me in this mess in the first place. And you and I are left holding the bag. Put the notes back in the treasury and there's no taxation, and "national wealth" not "national debt." The foreigners who control the game will kill your president to avoid that. What does that tell ya? I am very happy to hear things are going well at your place, lord knows we need some good news. I am not doing so bad myself, except that I've had less "business class" work and have taken on more individual work. Not as fun, but gotta keep the lights on. Last thing, every American who loves his country (as I do) should see this: http://video.google.com/videoplay?docid=-515319560256183936&hl=en The banksters have been playing this game for 10,000 years.

bus66vw
bus66vw

but there will be a lot less money to pay people to do installations. You may find that company employees and/or unskilled temps, who are not ITs, will do the installs. Then what is left of the IT department will have to make it all work. Good luck.

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