The Mess has Moved!

Please update your bookmarks, RSS readers, or any other means that you might have used to read what is written here because The Mess That Greenspan Made has moved to:

http://timiacono.com

It will look and feel pretty much the same, however, the URL is much shorter and it's a lot easier for me to tell people how to find it. The new RSS and Twitter feeds are as follows:

http://timiacono.com/index.php/feed/
https://twitter.com/timiacono

I have no intention of abandoning this blog as it contains five years worth of reference material that, hopefully, will persist for a very long time. Unless something goes haywire at the new blog (and, yes, there is reason for concern after this 2007 debacle), I won't be posting anything new here again, but it will likely generate new comments for years to come (as is the case for the Hummer post back in 2005).

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Five years and a new mess!

It's been exactly five years since publication began at this blog and, if all goes well, this will be the second-to-last post at this location since a new and better self-hosted blog has been taking shape over the last month and, quite frankly, your humble scribe has long since grown tired of double-posting everything.

Rest assured that the name will remain the same, however, the URL is shorter and it is a WordPress blog instead of a Blogger blog. After a few rough patches early on, Blogger has been quite good - very reliable and easy to use - but, after working with WordPress in recent weeks, it has become clear why everyone likes it so much. Anyway, here it is:


The new URL is: http://www.timiacono.com and the next (and last) post that you'll see here at this blog will have additional information about RSS, Twitter, and the like, though most of you can probably figure that stuff out on your own.

As for the five year anniversary, the previous item about our old rental house brought back some memories of working a full-time software job, writing the blog, and launching the investment website back in Southern California.

I must say, I'm happy to be out of there, though, I do sometimes miss the weather.

As has become the custom around here on this day, looking back to March 26th, 2005 we find this very first post on a Stephen Roach commentary, one that still rings true today.

An appropriate first post - Stephen Roach hits another home run with his latest missive The Test. The last paragraph serves as an excellent premise for this blog:

"It didn’t have to be this way. The big mistake, in my view, came when the Fed condoned the equity bubble in the late 1990s. It has been playing post-bubble defense ever since, fostering an unusually low real interest rate climate that has led to one bubble after another. And that has given rise to the real monster -- the asset-dependent American consumer and a co-dependent global economy that can’t live without excess US consumption. The real test was always the exit strategy."

Yes, it's easy on the way up. Ever increasing liquidity to meet every emerging problem and everyone gets rich - not rich in the old sense, of course, with higher real income and savings, but through higher asset prices for stocks and homes.

"Asset markets around the world are now quivering at just the hint of an unwinding of this house of cards. And they quiver with the real federal funds rate barely above zero. What happens to these markets and to an asset-dependent US economy should the Fed actually complete its nasty task of taking its policy rate into the restrictive zone? "

All aquiver, that's right. Paul Volker must be so proud of his successor ... about to bring down the whole house of cards with quarter point increases to the Fed Funds rate in the low single digits.

"I still don’t think America’s central bank is up to the task at hand. In the face of disruptive markets or growth disappointments, this Fed has repeatedly opted to err on the side of accommodation. I suspect that deep in its heart, the Federal Reserve knows what’s at stake for the US -- and for the world -- if the asset-dependent American consumer were to throw in the towel. "

This is my central belief on this issue, and the motivation for this blog - that given the choice of some economic pain and a long slow death by inflation, the Fed will opt for the latter. It will never be able to raise interest rates like Paul Volker did, in order to put this fiat currency system back on a track that is sustainable for another generation or two - instead, we will continue to swim out to the deep water and hope for the best.

Recall that, at the time, short-term rates had just begun to rise from 1.0 percent in mid-2004 and the housing bubble was entering new and more dangerous phases about every six months. This five-year old commentary seems all the more strange as many people are already talking about short-term rates beginning to rise once again sometime in the next year.

Dan, feel free to comment...

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TMTGM2?

There's a new blog taking shape that will, someday, replace the one that you are currently reading. It's a WordPress blog that I'm hosting at timiacono.com so, while the name of the blog remains the same (and, believe me, I know how important that is), the URL will be much shorter than the current one. Anyone who's interested can go take a look around and give it a test drive - leave a comment or two and see what you think.
I'll be double-posting for probably a few more weeks until everything is squared away at the new place and then I plan to stop posting here.

The reason for the move is to simply get rid of the monstrous URL that I've been lugging around for almost five years. Actually, the five year anniversary of this blog is on the 26th of this month so, if all goes well, the switchover will be made then. Note that I tried to get tmtgm.com and some variants of that but others got there first.

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I quit my job three years ago today

Time really does fly when you're having fun. It was three years ago today that I quit my job at semiconductor test equipment manufacturer Teradyne, Inc. in Southern California to head north and then head further north a couple years after that ... we still never really look back.

The job market must be pretty awful for U.S.-based engineers these days. As I understand it, the facility where I worked in Agoura Hills that, at the peak of the tech boom had over 2,000 employees, is now down to about 10 or 20 percent of that.

I'm glad I only think about thinks like this once a year - on the anniversary of my departure in 2007 when the following post was offered up. It is reproduced in its entirety below.

* * *

After more than seven years, today is my last day at Teradyne, Inc. (NYSE: TER), a major manufacturer of test equipment for the semiconductor industry.

I'd like to thank all the great people I've worked with over the years and I wish you all the best of luck in the future.

Since joining the company in January of 2000, time spent here has been mostly enjoyable - writing software for a world-class semiconductor test platform has had more than its share of excitement and challenges.

I can't say that the last year or two have been as enjoyable as some of the earlier ones. Maybe it was because I was distracted by other interests.

Maybe too it was because "perpetual fire drill" is no way to live and there's been a steady stream of talented engineers out the front door. Despite assurances heard by employees, the attrition rate doesn't look normal to me.

Yes, I know things are changing - good luck with that.

I really can't complain - Teradyne has been pretty good to me. I'm just tired of software and tired of Southern California - it's time to move on.

No, Not Alan Greenspan

Retirement in 2007 had been planned for many years. Sometime early last year I started counting down the days. I think the countdown started after we were shown a presentation from Broadcom (NYSE: BRCM) about how we software engineers need to be more productive. This would enable Broadcom to be more productive and the bottom line for both companies would swell and some of the profits would trickle down and the stock price would go up and we'd all live happily ever after.

With more irony than could be appreciated at the time, Alan Greenspan's picture was on the opening and closing slides and at first I was waiting for everyone to say, "Surprise!", but it never came.

Everyone was so serious.

Alan Greenspan's mug was there alongside a quote extolling the virtues of increased productivity and how we could play a larger role. That's when I started crossing off days on a calendar.

It seems that, along with many other engineers, I've been just a little cog in a big wheel that has contributed to the great borrow-and-spend consumption binge that characterizes our era. Being more productive to enable more businesses to profit from the manufacturing and sale of more consumer electronics that most people don't really need and have to borrow money to pay for, well, this just doesn't sound as good as it did a couple years ago.

And if I'd learned that Teradyne equipment tested chips that go into those ridiculous BlueTooth ear dongles that people wear like they're on the set of a Star Trek movie, I may have been long gone by now.

Stock Options, Stock Purchase, Stock Grants, Stock Buybacks

Coming from a mostly staid aerospace company in 1999, I was at first taken aback by all the stock trading that went on in cubicles up and down the aisles of the engineering department. That changed rather quickly as 2000 drew to a close.

Not surprisingly, the stock options I received when joining the company expired worthless, however, there were a few other opportunities to profit in company stock during my stay. But not too many.

A big part of the reason why my wife and I are able to retire now is shown in the chart below. The natural resource sector is the new bull market, though I continue to be surprised at how few people realize this. It's been going on for five years now and shows little sign of slowing down, though the ride can get pretty bumpy from time to time.


The stock purchase plan was pretty good at Teradyne in 2003, but aside from that, it's been many disappointing years in a row. I can't believe some people got laid off a few years back and had never sold any of their stock - rode it all the way up and all the way back down.

Technology is so last century.

No More SoCal, No More Software

We will be leaving the crowded environs of Southern California this spring, not likely to return soon or often. I can't imagine what driving on these freeways will be like in five or ten years - so many angry young drivers that seem to get more reckless every year. The young men in big pickup trucks are sure to get angrier as their career prospects dim along with the housing industry.

We'll be settling in an area where a quick mid-day break might result in a view such as this, rather than the sights and sounds of the 101 freeway with cars buzzing by at 80 miles an hour.

We'll be renting for a year. There's no hurry to buy any real estate anywhere in California this year.

My software programming career officially ends today. I'd complain about having to train Rammohan, Rajasekar, and Vijayakannan last year, but I'm mostly over that now.

That last thousand lines of code I wrote might require a little attention in the year ahead. I can't say that it received my undivided attention as this day drew closer, but it should be pretty good.

I learned a little more about maps (yes, Wikipedia has an entry for this too) and the multi-headed PinInfo hydra. I'm proud to say that I completed my entire career at Teradyne without having to understand what upside-down inheritance is. At yesterday's going-away luncheon, word came that I'm better off for it.

Anyway, this missive has gone on far too long already. I have to make that drive in one last time to do an "exit interview" and then it's official.

Goodbye Teradyne.

Full Disclosure: Still no position in TER or BRCM at time of writing.

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And ... we are back

Right up until the time that we talked to a young lady in Bismarck, North Dakota who had just returned from a 9,000 mile journey around the country - to Maine, Florida, Arizona, Washington, and back - we thought our 7,000 mile road trip was quite a feat.

Oh well, it's all relative.
We are back from our nearly three-and-a-half week long trip to and from the East Coast having driven through the "winter blast" that, according to the current weather map at USA Today, seems to have settled in over the northern half of the country.

There were plenty of highlights and a few close calls with wildlife on the road, but it's good to be back home in Bend, Oregon and things should return to normal around here promptly.

Did I miss anything?

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Road Trip!

We'll be departing early in the morning on a nearly month long trip across the northern part of the U.S. and back, logging probably 7,000 miles, attending an investment conference, visiting friends and relatives, and seeing as many National Parks as we can.

It should be a fun trip - we'll be seeing lots of things we've never seen before and visiting some areas that I've been too, but was much too young to remember anything.
One or two items a day should continue to appear here between now and the middle of next month, mostly some "blasts from the past" from around this time of year from 2005 through 2008. Some new commentary will pop up from time to time, but not too much.

If anyone has any thoughts on Bozeman, Montana, please feel free to share them in the comments section. We still have quite a few more months to go before we have to make a decision about staying here in Bend. In the meantime, we're still looking around and the idea of living so close to Yellowstone, Glacier, and Banff/Jasper is quite appealing.

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Sparks Lake

Sometimes it's hard to believe that, in our new home of Bend, Oregon, we're only about a half hour away from all kinds of stuff like this...

Click for an enormous version of the above

Just about every time we go out looking around, exploring some new area, we end up saying, "Well, I didn't really know what to expect, but that was really a pleasant surprise."

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What'd I miss today?

We were gone for nearly the entire day today on a round trip to Portland to buy a new car (just doing our part to help stimulate the economy), making a couple stops along the way and then catching up on the U.S. Open upon our return (damn, I was hoping that David Duval would pull it out at the end there - what a story that would have been).

What'd I miss in the market today?

It looks like everything went down again except for the dollar, Treasuries, and the yen. That seems to be a recurring theme these days...

Bloomberg notes, "Asian stocks fell, sending the MSCI Asia Pacific Index down by the most in almost six weeks, as concern an economic recovery will be delayed dragged commodity prices lower and spurred demand for the yen as a haven."

Oh, there's that "flight-to-safety" again, like in a game of musical chairs, when everyone looks around waiting for the music to stop, eyeing a chair, not fully appreciating how rickety those chairs really are.

Larry Kudlow was heard complaining about the World Bank on XM Satellite radio on our way back (pretty cool - my first time with this, though, it is not at all clear that we'll continue with paid service after the first few free months).

It seems the words "grim" and "bleak" when used to characterize the prospects for the global economy spooked investors today and Larry was none to happy about it. "Since when did anyone listen to anything the World Bank has to say?" Larry asked.

Not having listened to Larry for more than a few seconds at a time for a couple years now, it was something of an odd experience taking in almost a full hour in our new post-crash financial world. He sounds pretty much the same as before, it just seems more out of place.

You have to wonder what goes on inside that head of his...

Tomorrow is another day but, based on the downward momentum that has been building over the last week or so, it may not be a pleasant summer.

As I told a number of people last month, "If you have to sell some stock this year, May would probably be a good month to do it".

Anyway, what a difference buying a car in Oregeon versus California. Down below, you negotiate your best deal and then the gubment comes along and tacks on another ten percent or more, hitting you again every year with registration fees in the hundreds of dollars.

In Oregon, you pay no sales tax, which is a saving of thousands of dollars, and you pay $200+ to the dealer for four years worth of registration fees.

Though its tough everywhere, the cards are stacked against car dealers in the Golden State, where things seem to be getting worse by the day.

On our way back from Portland, we stopped in at the Timberline Lodge on the south side of Mount Hood. Knowing nothing about the place other than that it was something we should visit, it was a pleasant surprise to see a stately hotel adjacent to a ski area just down from a huge mountain peak.
It's funny how, after the events of the last year or so, you notice 1930s references more than ever before. This hotel was built during the Great Depression as part of the Works Progress Administration (WPA) and we happened to spot the big photo of Franklin D. Roosevelt dedicating the Lodge in 1937.

Wikipedia has these excerpts from the speech made on that occasion:

This Timberline Lodge marks a venture that was made possible by W.P.A., emergency relief work, in order that we may test the workability of recreational facilities installed by the Government itself and operated under its complete control.

Here, to Mount Hood, will come thousands and thousands of visitors in the coming years. Looking east toward eastern Oregon with its great livestock raising areas, these visitors are going to visualize the relationship between the cattle ranches and the summer ranges in the forests. Looking westward and northward toward Portland and the Columbia River, with their great lumber and other wood using industries, they will understand the part which National Forest timber will play in the support of this important element of northwestern prosperity.

With so many comparisons between the 1930s and the current period, you have to wonder what photos people will be looking at seventy years from now - what lasting reminders from the current era will survive.

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The bubble in Bend

A New York Times story from last week (hat tip DM) carried the photo shown below, offering yet another reminder about the state of the deteriorating local economy and the stunning beauty of the local mountains here in Bend, Oregon.
Naturally, the trouble with the local economy had nothing to do with our decision to relocate here, though the downturn apparently did gather pace about six months ago when we began contemplating a move that was finally carried out just three weeks ago.

Hmmm...

Anyway, the subjects in this story hail from the Central Valley of California and appear to have approached things very differently than we did. Methinks they actually believed what real estate agents were telling them a few years back.

Susan and Mike Telford had a plan back in the boom years in California. They would sell their house outside Fresno at a solid profit and take their equity to this sunny mountain city to build a better life, a fresh-air future in Oregon.

“We wanted to lose the commute, to lose the smog,” Mrs. Telford said. “We wanted to lose California.”

They moved here in 2006, when Bend was one of the fastest-growing places in the West and money and migration from California fueled that growth. Now the Bend area’s unemployment rate, at almost 16 percent, is one of the highest of any metropolitan area in the nation. “For sale” signs dot desert-toned, unfinished subdivisions. Luxury furniture stores downtown are going out of business. San Francisco chefs have fled.

The freefall has made Bend a succinct symbol for the economic perils of “lifestyle destinations” in the so-called New West, recreation-heavy communities where jobs have been heavily tilted toward construction and services and where many of the new residents were self-made exiles from California cashing in on their overpriced real estate. Bend, a former timber town that now has 80,000 residents, was particularly popular among those drawn to the often rainy Northwest because it is located on the sunny side of the Cascade Range.

Now the Californians who contributed to Oregon’s growth are in some cases adding to its economic struggle. As of May, Oregon had the second-highest unemployment rate in the nation, at 12.4 percent, behind Michigan. California, which has not released its May figures, ranked fifth in April.

While some other states with high unemployment, including Michigan, have seen their labor forces shrink, Oregon’s labor force has grown. Economists say some of the growth appears to be driven by people who moved here with money they made in California, whether from real estate or stock market investments, and expected to get by but now must look for work.

“It’s just so depressing to hear them because they thought they had life handled and they don’t,” said Bobbie Faust, an employment counselor who works for the state in Bend.

Yikes!

We think we have life handled. Hopefully we do...

At least we've known enough not to own any real estate for the last few years, opting largely for dumb 'ol (but very shiny) gold coins instead.

The thought of applying for any job other than as part-time golf course marshal around here is actually quite depressing.

The story continues and - surprise! - real estate is the Telford's downfall.

The Telfords are among those facing trouble. They had presumed they would be able to sell their house in Fresno for more than $300,000 to help pay the mortgage on the new house they bought near the Deschutes River in Bend for $475,000. But the Fresno house has yet to sell, and Mrs. Telford, an accountant, has lost a series of jobs at small firms here that she said had downsized. The couple’s only income now comes from her unemployment checks and her husband’s salary as a high school teacher.

“The cash flow is negative,” Mrs. Telford said. “This will be the first time we’ve had to go into savings.”

They go on to talk about the mixed reaction by locals to California transplants, the area where we now rent apparently referred to as "Little California" (I guess we landed in the right spot), how San Francisco chefs are moving from here to Australia, how a glossy real estate magazine has had to shut down, and how the economy is ultimately unsustainable.

Sounds pretty grim...

For those of you who might be interested, another New York Times story has a much more positive outlook for the area, something about the city being the sixth fastest growing region in the country.

Of course, it was written in 2005.

ooo

This week's cartoon from The Economist:

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And ... we are back

We've dug our way out of enough boxes and hooked up enough electronic equipment to let you all know that we've arrived safely in our new home of Bend, Oregon.
This is supposed to be the dry side of the Cascades but, so far, it's rained everyday. Everything seems less expensive than in California - gasoline, utilities, insurance, food, you name it. More on our impressions in a day or two as a regular schedule should soon resume.

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A short break

Well, the moving truck is here... It looks like that will be about it from California. Save for a possible quick update to the "Guess the mid-year price of oil and gold" contest late today or tomorrow (sharply up and to the right has been the general direction), the next thing you read here will originate from Bend, Oregon, sometime next week.

UPDATE - May 29th, 9:35 PM PST: The contest graphic has been updated - see below.

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Back from Bend... Again...

We are now back from what was, thankfully, our last exploratory trip to Oregon, having signed a one-year lease for the place you see below atop Awbrey Butte in Bend. The next time we go north, it will be with a moving truck and no return trip will be in the schedule. Since last summer, we must have made about ten trips to Ashland, Medford, Eugene, Salem, Florence, and Grants Pass before finally making the last three journeys to Bend, the most recent one resulting in making a one-year commitment.

We're going to go for a year and see how it works out - the fact that it's been snowing there all week would be cause for concern for some, but we like the snow. Whether or not we like the snow enough for it to be coming down this late in the year every year remains to be seen.

As always, it was quite an adventure and, talking to the locals, you sometimes get a real sense of dread, especially when the conversation turns to real estate. Cessna just announced that they were closing a factory in Bend, a decision that is expected to result in the loss of another 109 jobs, all of which, presumably, paid more than that of ski lift operators or golf course marshalls.

On the radio this morning, they said the unemployment rate had risen to 17 percent in the county but, as we entered northern California, another radio station cited a 19 percent unemployment rate in two of the counties we passed through on the way home.

The employment picture looks pretty bleak whereever you go on the West Coast - increasingly you hear things like "two counties in California, two counties in Michigan, and one county in Oregon headed the nation's unemployment..."

It's kind of sad because most people really don't know what hit them - they just look around and see home prices dropping like a rock, jobless rates soaring, and the apparent end to what was thought to be an enduring, spendthrift way of life.

When we had some time to kill, we stopped into a couple of private golf courses in the area and inquired about membership, just to get an idea about what they were charging these days if we happened to be so inclined.

The number of folks cutting back on discretionary expenses has, generally speaking, put a pretty big crimp in running a private golf club these days. Declines of between 20 and 50 percent seem to be commonplace - home prices, golf club membership, and any other thing that people think twice about spending money on, or so it seems.

It will be an interesting next year - we move a month from tomorrow.

Please understand that, due to family matters and our upcoming move, things haven't exactly been "normal" around here lately and that condition is not likely to change soon.

Hopefully, by the middle of June or so, we'll have settled into our new home and things will be back to normal again - whatever that is...

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A short break

Those of you who may have wondered if there was something amiss around here in recent weeks would have been correct in your suspicion. After a brief illness, a dear family member passed away late last night and she will be sorely missed by all of us.

Look for something new here in a few days or so.

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Four years! It didn't have to be this way

While sifting through the latest offering from Treasury Secretary Tim Geithner on the subject of regulatory reform (does this man ever sleep?), a short pause is in order to reflect on today's four year anniversary of this blog.

Reproduced in its entirety below is the very first post from back on March 26th, 2005.

Obviously, we now know what happens to an asset-dependent economy when the Federal Reserve raises interest rates and that very last comment of mine was kind of prophetic, given that the Time Magazine housing cover wouldn't appear for another three months.

###

An appropriate first post - Stephen Roach hits another home run with his latest missive The Test. The last paragraph serves as an excellent premise for this blog:

"It didn’t have to be this way. The big mistake, in my view, came when the Fed condoned the equity bubble in the late 1990s. It has been playing post-bubble defense ever since, fostering an unusually low real interest rate climate that has led to one bubble after another. And that has given rise to the real monster -- the asset-dependent American consumer and a co-dependent global economy that can’t live without excess US consumption. The real test was always the exit strategy."

Yes, it's easy on the way up. Ever increasing liquidity to meet every emerging problem and everyone gets rich - not rich in the old sense, of course, with higher real income and savings, but through higher asset prices for stocks and homes.

"Asset markets around the world are now quivering at just the hint of an unwinding of this house of cards. And they quiver with the real federal funds rate barely above zero. What happens to these markets and to an asset-dependent US economy should the Fed actually complete its nasty task of taking its policy rate into the restrictive zone? "

All aquiver, that's right. Paul Volker must be so proud of his successor ... about to bring down the whole house of cards with quarter point increases to the Fed Funds rate in the low single digits.

"I still don’t think America’s central bank is up to the task at hand. In the face of disruptive markets or growth disappointments, this Fed has repeatedly opted to err on the side of accommodation. I suspect that deep in its heart, the Federal Reserve knows what’s at stake for the US -- and for the world -- if the asset-dependent American consumer were to throw in the towel. "

This is my central belief on this issue, and the motivation for this blog - that given the choice of some economic pain and a long slow death by inflation, the Fed will opt for the latter. It will never be able to raise interest rates like Paul Volker did, in order to put this fiat currency system back on a track that is sustainable for another generation or two - instead, we will continue to swim out to the deep water and hope for the best.

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It's Bend! Oregon!

Well, we're not going there to look for a job, and that's probably a good thing given the story below from the local paper, but we have decided to go give Bend, Oregon a try rather than other parts of the state or areas in Washington as discussed over the last few months.

Thanks again everyone for helping out in this decision. We'll be renting for a while, so it's anything but a permanent change - of all the places we looked, we liked Bend the best.

Mostly, it had to do with the winter weather (sunnier but colder versus gloomier and wetter) and the size of the town (big enough for all the good shopping, dining, etc. but with no freeway running through it).

The local real estate market offers some fantastic bargains on rentals and home prices appear to be in a virtual free-fall at the moment with lots of home built in 2004-2007 now going back to the bank faster than they know what to do with them.

Of course, the outdoor activities are why people go there and we'll be sure to take advantage of all of them - we might even take up fly-fishing.

-------------------------------

UPDATE: Wednesday, March 4th, 9:25 PST

In no particular order, a few of the most important pros and cons about the Bend area that are specific to our situation (e.g., things like the local job market and being so far from the ocean are just not that important to us):

Pros:
- Moderate summer temperatures
- Outdoor activities - hiking, camping, winter sports, golf
- Shopping and restaurants
- Not too big of a town (~80,000)
- Good selection of rental and foreclosed housing
- ROUNDABOUTS!!

Cons:
- Cold winters
- A little more isolated
- May be hit hard during this recession

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I quit my job two years ago today

Wow. Time really does fly when you're having fun. It was two years ago today that I quit my job at Teradyne, Inc. in Southern California to move away from five-lane freeways and a "less-than-ideal" work environment.

Little did we know we'd be moving again in two years - oh well.

Still no regrets - life couldn't be better.

With time comes perspective and this perspective is still very good.

The idea of being completely removed from today's labor market is probably one of the most under-appreciated aspects of our lives right now. The axe is swinging everywhere these days, including at my former employer. Some consideration was given to trying to endure another year or two there in order "volunteer" to be laid off (that worked successfully once before) but, alas, two years would have been far too long to wait.

This post from that last day as a cubicle dweller exactly two years ago is one of the few items that I go back and read from time to time, usually after a glass of wine or two. It's worth revisiting today and is reproduced in its entirety below. The only thing that has changed is the chart of stock prices.

* * *

After more than seven years, today is my last day at Teradyne, Inc. (NYSE: TER), a major manufacturer of test equipment for the semiconductor industry.

I'd like to thank all the great people I've worked with over the years and I wish you all the best of luck in the future.

Since joining the company in January of 2000, time spent here has been mostly enjoyable - writing software for a world-class semiconductor test platform has had more than its share of excitement and challenges.

I can't say that the last year or two have been as enjoyable as some of the earlier ones. Maybe it was because I was distracted by other interests.

Maybe too it was because "perpetual fire drill" is no way to live and there's been a steady stream of talented engineers out the front door. Despite assurances heard by employees, the attrition rate doesn't look normal to me.

Yes, I know things are changing - good luck with that.

I really can't complain - Teradyne has been pretty good to me. I'm just tired of software and tired of Southern California - it's time to move on.

No, Not Alan Greenspan

Retirement in 2007 had been planned for many years. Sometime early last year I started counting down the days. I think the countdown started after we were shown a presentation from Broadcom (NYSE: BRCM) about how we software engineers need to be more productive. This would enable Broadcom to be more productive and the bottom line for both companies would swell and some of the profits would trickle down and the stock price would go up and we'd all live happily ever after.

With more irony than could be appreciated at the time, Alan Greenspan's picture was on the opening and closing slides and at first I was waiting for everyone to say, "Surprise!", but it never came.

Everyone was so serious.

Alan Greenspan's mug was there alongside a quote extolling the virtues of increased productivity and how we could play a larger role. That's when I started crossing off days on a calendar.

It seems that, along with many other engineers, I've been just a little cog in a big wheel that has contributed to the great borrow-and-spend consumption binge that characterizes our era. Being more productive to enable more businesses to profit from the manufacturing and sale of more consumer electronics that most people don't really need and have to borrow money to pay for, well, this just doesn't sound as good as it did a couple years ago.

And if I'd learned that Teradyne equipment tested chips that go into those ridiculous BlueTooth ear dongles that people wear like they're on the set of a Star Trek movie, I may have been long gone by now.

Stock Options, Stock Purchase, Stock Grants, Stock Buybacks

Coming from a mostly staid aerospace company in 1999, I was at first taken aback by all the stock trading that went on in cubicles up and down the aisles of the engineering department. That changed rather quickly as 2000 drew to a close.

Not surprisingly, the stock options I received when joining the company expired worthless, however, there were a few other opportunities to profit in company stock during my stay. But not too many.

A big part of the reason why my wife and I are able to retire now is shown in the chart below. The natural resource sector is the new bull market, though I continue to be surprised at how few people realize this. It's been going on for five years now and shows little sign of slowing down, though the ride can get pretty bumpy from time to time.


The stock purchase plan was pretty good at Teradyne in 2003, but aside from that, it's been many disappointing years in a row. I can't believe some people got laid off a few years back and had never sold any of their stock - rode it all the way up and all the way back down.

Technology is so last century.

No More SoCal, No More Software

We will be leaving the crowded environs of Southern California this spring, not likely to return soon or often. I can't imagine what driving on these freeways will be like in five or ten years - so many angry young drivers that seem to get more reckless every year. The young men in big pickup trucks are sure to get angrier as their career prospects dim along with the housing industry.

We'll be settling in an area where a quick mid-day break might result in a view such as this, rather than the sights and sounds of the 101 freeway with cars buzzing by at 80 miles an hour.

We'll be renting for a year. There's no hurry to buy any real estate anywhere in California this year.

My software programming career officially ends today. I'd complain about having to train Rammohan, Rajasekar, and Vijayakannan last year, but I'm mostly over that now.

That last thousand lines of code I wrote might require a little attention in the year ahead. I can't say that it received my undivided attention as this day drew closer, but it should be pretty good.

I learned a little more about maps (yes, Wikipedia has an entry for this too) and the multi-headed PinInfo hydra. I'm proud to say that I completed my entire career at Teradyne without having to understand what upside-down inheritance is. At yesterday's going-away luncheon, word came that I'm better off for it.

Anyway, this missive has gone on far too long already. I have to make that drive in one last time to do an "exit interview" and then it's official.

Goodbye Teradyne.

Full Disclosure: Still no position in TER or BRCM at time of writing.

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You say it's your birthday

Today is my birthday - I'm 49 years old.

For the first time in my life, I'm older than the President of the United States, which is a very strange feeling.

Born at the tail end of the baby boom and just before the beginning of Generation X, I've never felt a particular kinship with either group.

That's probably not a bad thing.

Other notable birthdays on this day are John Harvey Kellogg (1852 - Kellog's cereal), Victor Hugo (1802), William F. "Buffalo Bill" Cody (1846), Johnny Cash (1932), Fats Domino (1928), and Robert Novak (1931).

On February 26th, 1993, the World Trade Center was bombed and, on this day in 1995, Barings PLC, Britain's oldest investment banking firm, collapsed after a securities dealer lost more than $1.4 billion by gambling on Tokyo stock prices.

That seemed like a big number at the time.

Today's headlines read:

• Obama unveils $3.6 trillion budget for 'new era'
• GM Posts $30.9 Billion Loss as Wagoner Seeks New Aid
• Fannie taps lifeline after $59B in losses
  
• Obama budget has new $750B bank rescue contingency

All the big numbers now seem to be losing their meaning.

My wife and I don't own a house, we don't have any children, we don't owe anyone a nickel, and we have a pile of money that we're in no particular hurry to spend.

In contrast, the U.S. government has plenty of misbehaving kids, owes the world almost $11 trillion, continues to borrow money with abandon, and can't seem to spend it fast enough.

Cue the music...

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Bend, Oregon?

We still haven't made a final decision on exactly where in Oregon we are moving in a few months. Weather permitting, we're going to visit Bend later this week.

Anyone with any thoughts on the area they'd like to share is encouraged to do so in the comments section. Yeah, I know it's cold there in the winter, but aside from that...

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Damn, the power's back on

A big snowstorm came through here earlier today with an even bigger one due over the weekend. Power has been out for hours - sadly it just came back on.
Though there was growing concern for all the food in our freezer, we were enjoying the feeling of being completely disconnected, hoping it would last a while longer.

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Get out the party hats!

A new milestone was reached earlier today - the 'ol sitemeter reached the 2 million mark and then just kept on going.

It was quite a thrill to see it pass 20,000 a few years ago and then on to 50,000 when maybe 50 or 100 people would stop by each day. A half million and then a million were kind of fun too. While this is a puny little cumulative total compared to some, it is, nonetheless, two million unique visitors.

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