The Glitter That Makes Markets Jitter

Where’s the silver lining?

“Gold is a hedge against inflation.” 

That’s such a long-accepted trope you probably don’t remember where you first heard it. Historically, it’s usually been true. The price of gold rises and falls like anything else, but it normally stays fairly closely pegged to the inflation rate. One way to think of it is this: an ounce of gold has always been enough to buy a decent suit of clothes, whether in 1849 when gold was going for $20, or in 2000 when it was up to $300.

But a not-so-funny thing has happened since the 2007 financial crisis — the price of gold itself has become inflated, maybe even hyper-inflated, shooting up to an all-time high last year of nearly $2,000 an ounce.

That’s a pretty nice suit.

So, what was going on there? Was it a bubble fueled by panicky investors here in the U.S.? Talk radio and investing forums were thick with gold hype during the worst of those years. Gold brokers were springing up everywhere, selling dubious gold certificates and engaging in the even more dubious practice of buying gold by mail. This all doubtlessly played a part.

But what played an even bigger role was the chugging engines of Asian economies. China and India, especially, weathered well that financial storm. They had fresh dollars to invest, but Western markets weren’t exactly attractive opportunities. So they invested in what conventional wisdom said was a dependable hedge against inflation. For almost five years Chinese and Indian purchases accounted for more than half the gold consumption in the world.

In the last 12 months things have begun to change. The Chinese and Indian economies have slowed, and with them their purchases of gold. Since September 2011, the price of gold has fallen more than 17% to a still-inflated but somewhat more sane $1,600 per ounce.

Will the slide continue? Or is this an example of a market correcting itself? Time will tell. If anything it’s an abject lesson — perhaps a painful one — for investors. Beware bubbles. Beware hype. And if you’re hedging against inflation, don’t buy in at inflated prices.

The C4:

1. Since the start of the 2007 financial crisis, we’ve seen some disturbing fluctuations in the price of gold; it shot up to an all-time high last year, reaching about $1,900 per ounce. Now it’s begun one of its steepest ever declines, dropping 17% in 11 months.
2. Looking back, there was clearly some gold fever here at home. Conspiracy theorists advocated hoarding while fast talkers were begging us to sell them grandma’s jewelry. That was the start of the bubble.
3. Asia is where the bubble blew up. India and China were just as hungry for gold, and they could afford much more. They started buying more than half of all gold on the market…until their economies started to slow. Which brings us to today.
4. Is gold still a hedge against inflation? History, as they say, is no guarantee of future performance. The price of gold will probably stabilize and it might even become a decent hedge again. But investors would be wise to remember: gold is a commodity, as susceptible as any to inflation and deflation. Markets have behaved irrationally when it comes to gold, and there’s no reason that won’t happen again.

I Said, Fill The Void!

The whisper of whitespace amplifies meaning.

Let’s preface this with a declaration: we love design, every aspect of it.

But there’s one certain aspect of design that is perhaps our favorite. We could rave (we have raved!) about its elegant simplicity, its deceptive minimalism. Funny thing is, it's often our clients’ least favorite aspect of design.

It’s the whitespace.

See what we did there? We added paragraph breaks, that is, whitespace, before and after that one short sentence, those three short words. Do you see the way it draws the eye, the way it heightens the drama?

That’s why we love whitespace.

Oh, but we see our clients’ point. They’re paying for ink on the page and pixels on the screen, and most importantly for the effort it takes to put them there. Paying for whitespace? That’s a little too much like paying for the air in a bag of chips.

Hard to argue that point, except like this: in marketing design, what you’re really paying for is the effect. And the effect of whitespace is phenomenal.

Remember, we’re having a conversation with your customer. We’re stopping him in the street, staring him in the eye, and telling him all about you. Maybe he doesn’t want to listen. Maybe he’s hurrying to an appointment. Doesn’t matter. It’s our job to start that conversation, any way we can.

The whitespace is the dramatic pause in our sales pitch. It’s the knowing smile and confident nod that tells him that what comes next is going to blow his mind. Whitespace allows the message to breathe, separates it from surrounding visual noise and places it on the pedestal of absence so that it can be better understood.

We surround your message with whitespace, not because we’re in love with minimalism and dramatic design (true though that may be), but because we know it’s one of our most powerful tools to awe, to captivate, and…

…to communicate.

The C4:

1. Marketing design: it’s equal parts marketing and design. Design serves marketing. Design is gorgeous (maybe we’re biased), but unless it serves marketing it’s self-congratulatory and a waste of everyone’s time.
2. With that in mind, please believe us when we say we will leverage every tool in our considerable design kit to further ours and our clients' marketing aims. We will make gorgeous design, never doubt it, but we’ll do so only with that laser-like focus in mind.
3. One of those tools, one which we often find ourselves defending, is whitespace. We understand the doubt. Whitespace is, by definition, nothing. Who wants to pay for that?
4. Here’s the thing, though: you’re not paying for the nothing. You’re paying for the drama the nothingness creates. Our whitespace draws the eye, heightens the awareness, and lends an exhuberant exclamation to the elements it surrounds. It’s a message that reinforces itself by demanding attention. It creates a mental cadence to let the audience know that the central point is at hand—

          Just

          like

          this.

NLP Is A Tool For Programming Change, But...

Beware of duplicity?

Consider the hammer. It's the tool that, probably more than any other, built Western civilization. In the hands of a Michelangelo, it helps to sculpt David. But in the hands of a psychopath, it becomes truly frightening.

All tools are like that: neutral by nature, beneficial or maleficent depending on intent and application.

Next, consider NLP, or neuro-linguistic programming. It’s an approach to therapy, self-help, and behavior modification that’s been around since the 70s. It leverages the mind’s atavistic reaction to language, in order to alter demeanor, improve performance, and develop communications skills.

Now go Google NLP; or worse yet, do a search for that term on YouTube. You’ll find every type of huckster peddling NLP miracles, and promising of the ability to manipulate people to your will. Books like The Game by Neil Strauss detail how “pickup artists” use NLP to razzle-dazzle females into submission.

Some of it’s disturbing. Some is disgusting. But that’s what happens when powerful tools are used by bad people. None of it should discourage good people, though, who can use a tool like NLP for the best of reasons.

Want to improve your ability to communicate? Collaborate better with your peers? Shed harmful habits and cultivate healthy ones? Neuro-linguistic programming might be your ticket. It’s worth looking into.

As with all your endeavors, this one requires caution and common sense. Do your homework and be wary of inflated promises. There are scores of honest NLP instructors who can build a targeted course to help you and your organization reach your goals. You just need to separate the honest ones from the hucksters.

So will it work for you? Only one way to find out. All we can hope for is that you’ll respect it for the tool that it is, and use it only with the best intent.

The C4:

1. Neuro-linguistic programming is a behavior-modification technique developed by psychotherapists in the 1970s that uses language, rapport, and suggestion to achieve goals.
2. NLP can be used in business to create better communications methods, increase sales, and improve collaboration throughout the organization. It can also be used on a personal level for targeted self-improvement.
3. NLP is earning a bad rap, though, because some truly awful people are using it — selling courses that promise Svengali-like manipulation, and demonstrating pickup techniques based on deception and duplicity.
4. A tool in the hands of a bad person does bad things. In the hands of a good person it can better the world. What can you do with NLP?

A Dark Knight For Trading...

Are these gyrations the dawn of more NYSE angst?

Wall Street and its arcane world of securities trading — could anything be more complex? But really, the principles of stock trading are forthright and easily understood, and haven’t much changed in a couple centuries…

You buy fractional ownership in a corporation. You make money, if not through dividends or shares of profit, then by reselling your shares as their values tick higher. Thus the familiar refrain, buy low/sell high.

The complexities creep in as you try to wrest loose every erg of possible profit. Can revenue be gained when share prices rise by a quarter penny or so? It can, but only when you’re trading thousands of shares, thousands of times per second. Here’s where trading software comes in, the likes of which has revolutionized the securities market.

But it’s also imperiled it.

On August 1, 2012 the Knight Capital Group began executing a series of erratic, rapid-fire transactions that had over 100 stocks gyrating wildly for more than 45 minutes, until the NYSE suspended trading. In the meantime Knight was losing more than $10 million per minute, for a final hit that equaled more than quadruple that firm’s total profit last year.

The culprit of course was software. Knight was trying out a new trading algorithm that had been regrettably rushed into service without due testing and bug-fixing. When you or we come up against a bug, we might curse at a blue screen for a while. When it happens to a company like Knight (which executes trades for Citigroup, TD Ameritrade, and others, and was responsible for 11% of all U.S. securities trading in the first half of this year), markets shudder.

It’s a fact of life in this new century of ours that we rely on technology in more ways than we can count. It’s also a fact that our reliance sometimes outstrips the technology’s capabilities. There’s nothing abstract about binary code that can eliminate vast fortunes in the blink of an eye. We have software today that can bankrupt companies and destroy lives.

If we’re resolved to keep it, then we’d better find a way to make it work.

The C4:

1. On August 1, a trading-software glitch caused 45 minutes of erratic stock transactions that have so far cost the Knight Capital Group $440 million and over 75% of their company value. They’re likely headed for bankruptcy.
2. This is hardly the first time this sort of thing has happened. The Facebook IPO in May was marred by a $40 million glitch and the 2010 “Flash Crash” caused a thousand-point swing in the Dow Jones Industrial Average in just over six minutes.
3. Every broker, day-trader, and 401k dabbler relies on stock-trading software. It’s made our modern securities market possible.
4. But when it goes wrong the consequences are devastating. The risks here are way too high. Stricter regulation is never a popular solution, but if anyone has a better idea for protecting our markets from software glitches, we’re all ears.