Tag Archive for 'economy'

Analyst: New Euphemisms Will Stimulate Economy

BROOKLYN, N.Y. , Feb 13…The economic crisis is being prolonged by faulty terminology that distorts perceptions, dampens expectations and crushes optimism, an analyst charged today.

“Our nomenclature is counter-productive,” said Efraim Durg, founder and CEO of NeuroBrands, a marketing consultancy.  “We say one thing, but the listener reacts in a totally different way.” 

Durg released a study that he claimed proved that the words used by policy makers often produce the opposite effect of what was intended.

The study was done with an “eclectic” group of volunteers–executives with the Carlyle Group, inmates on Death Row at Angola Prison and residents of the Hebrew Home For the Aged. The participants were wired with electrodes attached to the pleasure and pain centers of the brain. Words and phrases were flashed on a screen in front of them and simultaneously spoken in their earpieces by a soothing female voice. Their neural responses were recorded.

The first phrase was the acronym TARP, former Treasury Secretary Paulsen’s bailout plan. 

“The word has a harsh sound and connotation,” Durg said. “The elderly people associate tarps with the gurney covers thrown over the recently deceased,”  Durg said. “Prisoners said police sometimes covered informers with tarps when transporting them from one unit to another. Carlyle executives said they used tarps to protect their vintage sports cars from the elements and  the prying eyes of reporters and government investigators. All agreed that TARP meant cover up and they had negative reactions.” 

Next, the participants were shown the term “toxic assets.” They reacted with revulsion. 

“The Government tried to encourage banks and private investors to buy these  assets” Durg said. “But our participants said they wouldn’t buy anything with the word toxic on the label and the banks haven’t touched them.”

Durg suggested a simpler label like “A Real Steal”

“Then, we could change the acronym to STARS for Secret Treasure A Real Steal.” In this celebrity-obsessed culture people would believe that a program called STARS could save the economy.”

Legislators on both sides of the aisle have been railing about bills that “are loaded with pork,” but when Durg showed that phrase to his subjects the response was positive.

“The inmates said they had ordered pork for their last meal. The Carlyle execs said the phrase made them think of the Charcuterie platters they used to get at their favorite bistro before Obama took their expense accounts away. The aged Hebrews registered ambivalent reactions, but all agreed that something loaded with pork was probably a good thing.”

“If you want these bills to die you need a stronger term,” Durg said. “Something like: ‘This bill is loaded with putrefying cadavers,’ Or ‘with conniving lobbyists.’ Then, you could have Senators ringingly refuse to support legislation that was ‘laden with putrefying cadavers and conniving lobbyists.’ No politician would vote for that.”

Treasury Secretary Geithner wants to work with private equity investors who specialize in bad debt. These people have been referred to as “vultures” who circle over a dying company and swoop down when its work force has been depleted and its debts buried in bankruptcy. 

Durg’s subjects recoiled from the term. “You can’t be saved by a vulture,” an aged Hebrew said. “You’re already dead.” A Carlyle exec complained: “Why are the rich always vultures while the poor are crippled sparrows?” Durg feels the billionaire investors Geithner is trying so hard to woo will stay away. 

“Nobody wants to be thought of as an ugly, squawking bird picking at carrion,” he said. “If we want to involve these investors we should change the description. Something like ‘public-spirited philanthropists.’”

Durg said a total rephrasing was needed to draw private equity into the market. Something like: “Public-spirited philanthropists flocked to the STARS program investing a trillions in “real steals.”

He smiled proudly. “That’ll jumpstart the economy for sure.”


GREENPOINT, Brooklyn, Aug. 24…Wanna make a fast dollar?

“Find a hacker and go to Harvard.”

That’s what Efraim Durg, CEO of Durgometrics, a hedge fund that specializes in high risk investments, is advising his clients these days.

Durg has just returned from the Federal Reserve Bank’s annual retreat in Jackson Hole, Wyoming, where the mood was dismal. Central bankers from all over the world were puzzled and distressed by the slow but steady erosion in the global economy.

“We are in the midst of the greatest financial crisis since World War 2,” said Stanley Fischer, governor of the Bank of Israel. Yutaka Yamaguchi, former Deputy Governor of the Bank of Japan warned that the world was in a period of “exceptional uncertainty.”

But Durg is optimistic. “The economy is like a seesaw,” he says. “if somebody is down that means somebody else is up.”

Durg says he has found two classes of investors that are doing exceptionally well–US Senators and university endowment funds.

“Our research shows that the net worth of all US Senators has risen almost 20% since 2004,” he says. “And this same period recorded substantial gains for endowment funds.”

Durg quoted a report in the Washington Spectator, which said that Senators who played the market earned an “abnormal rate of return” According to the report: “Senators consistently anticipated movements in stock prices; they often purchased stocks before prices took off like a rocket and revealed an uncanny ability to sell just when a stock was about to flatten out.”

Senators and their spouses outperformed the market by by around ten per cent annually, the report said.

“Nobody gets results like this in the financial world,” said Professor Tom Ferguson of UMass-Boston, “Any manager of a mutual fund who beats the market by two per cent is considered a genius.”

“Just shows you how clever these politicians are,” says Durg with a knowing wink.

University endowments have done almost as well in this down market. The top fifty funds have risen over a 100% in value. The managers of these funds may have done well in former jobs, but they became financial wizards when they went to work in the Academe.

“Must be the food in the campus cafeteria,” says Durg with an ironic tap of his nose.

But Durg says the “numbers really explode” when you pair a Senator with his/her alma mater.

“Take Senator Kennedy (Edward Kennedy, D. Mass.) for example,” he says. “During the periods 2004 to the end of fiscal year 2006 his maximum net worth rose 300% from $51 million to $162 million. As Kennedy contributed less than 1% of his income to charity he was able to spend most of it on his lifestyle, his homes and especially his beloved yacht where he recuperated after cancer surgery.”

At the same time Kennedy (Harvard ’56) was getting rich his alma mater’s Endowment Fund was getting richer, growing at a rate of 23% per annum to $35 billion at the end of fiscal 2007. And this year with the finest minds in finance going bankrupt or to jail the Harvard Fund is up 9%.

This means that it has $1,456, 940 to spend on every student, not counting tuition and grants. But the fund plows most of its profits back into investments.

“University Endowments are run by managers, not educators,” says Durg. “They just want to use their money to make more money.”

What’s behind this incredible success? Do lobbyists and anxious constituents feed inside information to Senators? Do wealthy alumni tip off their endowment fund managers?

Durg refuses to speculate. “If you catch a guy playing with loaded dice, you don’t turn him in, you get a piece of his action.”

Unlike Warren Buffet, Senators and endowment funds don’t share their wisdom.

“You’ll have to get shady to get rich,” Durg says.

He suggests trying to corrupt an employee of the endowment or the senator’s staff–”maybe drugs or sexual blackmail, incriminating e mails or photos–” and getting information on the daily trades.”

Or planting a mole inside the endowment–”an MBA with a streak of larceny–” and have him spy from the inside.

You can always find a cleaning lady or maintenance person to bring you the all the trash from the trading floor.

But the best way is to find a hacker–”some nosepicker in Slovenia or Mindanao–”to plant a keystroke in their computers that sends all their transactions right back to Mama.”

Just be careful not to get caught.

“Insider trading is nothing,” Durg says. “Senators can get away with murder, too.”