"Flash Crash" After-Shocks

Plugging That OTHER Hole
(the Regulatory One)

Remember the SEC's press conference last week announcing that it had isolated the cause of the "flash crash" May 6, and unveiling a sweeping set of financial reforms designed to prevent a recurrence?

Me, neither.

That thought comes to mind as I see that the Dow Jones is already down about 250 points (so far) today.

Would-be bottom fishers don't want to wade in just as the bottom potentially falls out (again).

Cisco for General Motors

Economic Watersheds & Financial Footprints

If you follow the Dow Jones Average, you know that General Motors was recently dropped for Cisco Systems (and Citigroup for Travelers).

Locally, there is an echo of this "changing of the guard": the old Ford Motor dealership in St. Louis Park, near 36th St. and Highway 100, is out, and a new LA Fitness is on the way in (hard bodies for car bodies??).

Leaving aside what happened to Detroit and why, there is an obvious economic difference between a manufacturer like Ford, and a service business like a health club.

Think of it this way: each car sale creates demand for car parts, steel manufacturing, repair services, auto insurance, banking and finance, etc. Economists call this a multiplier effect.

By comparison, what you might call the "financial footprint" of a health club is much smaller.

On the plus side, at least it can't be outsourced . . .