Have you heard? Google is hiring!
According to a recent story from NPR, the internet giant is planning to expand its workforce by more than 6,000 people this coming year. Of course, that number of jobs, although impressive for one company, will probably only make a small dent in the overall jobless rate. Still, it's a bit of good news in an otherwise dismal employment outlook.
Unless you're a Wall Street investor, that is. The story goes on to report that, "...Google's push to further expand a work force that grew by 23 percent last year may not be as well received on Wall Street, where the Internet search leader's spending has annoyed some investors who would prefer a more frugal approach in hopes of fatter returns." (emphasis mine)
Let's allow that to sink in for awhile, shall we? Because it's somewhat rare to see that kind of honesty in a news report, even though you might miss it if you blink. This is a statement that reveals the truth about how capitalism really works, especially now that certain "too-big-to-fail" financial interests have completely infiltrated the highest ranks of government through lobbying money and the revolving door between those interests and the Treasury and the Federal Reserve. If there is a clearer example of how the interests of Wall Street and Main Street are diametrically opposed, I don't know what it could be.
Your positive employment prospects annoy Wall Street.
Some of these Wall Street types, undoubtedly the same types who drove our economy off of a cliff and then got bailed out with OUR MONEY, are less than pleased because a few lucky bastards may get jobs with Google this year, as this might mean a slight decrease in the multi-million dollar stock portfolios of some of their wealthiest clients.
A job, which means the difference between having a home and being homeless. The difference between having health insurance and being bankrupted by medical bills. The difference between eating and going hungry. The difference between being able to send your kids to college and those kids working for the minimum wage. The difference between being a productive, wage-earning citizen and being made to feel like a leech for collecting unemployment, even though you lost your job through no fault of your own.
As opposed to some potential slight decrease in investment earnings, which means the difference between, oh, I don't know, a Ferrari and a Porsche.
According to this graph from Yahoo Finance, which plots the price of a share of Google stock over the last several years, it's obvious that Google has done pretty well by its investors, with the price of a share more than doubling since its low point in the financial Armageddon of late 2008. It's now selling at over $600 a share.
Six-hundred dollars a share! How many of us have enough extra lying around to buy one or two shares of Google, even with a job? But that's just not good enough for the big boys on Wall Street.
From an article in the L.A. Times:
"If this results in some killer products down the line, that's great. There are some big opportunities they are chasing after," said BGC Partners analyst Colin Gillis.
But analysts, including Gillis, remain concerned about the burst of spending. "That's the reason why I have one of the lowest price targets on the streets," he said.
Price targets? I confess that I had to look that one up. Here's what I found at Investopedia.com:
Investopedia explains Price Target
1. An influential analyst on Wall Street may give a stock that is trading at $60 a one-year price target of $90.
2. The interesting thing about price targets is that there is no surefire way to calculate them. For example, two separate traders holding a stock that is trading at $60 may have drastically different opinions about where the stock will go. One trader may set his or her price target at $75, while the other will set it at $120. Price targets are a function of risk tolerance and the amount of time that one plans on holding the security.
In technical analysis, traders use tools such as previous support and resistance, Fibonacci extensions and moving averages to aid them in determining an appropriate price target.
Please note that first sentence in Item 2. There is no surefire way to calculate them. And then we have Fibonacci extensions and moving averages added into the mix. In other words, this is voodoo. The same voodoo that resulted in millions of 401k accounts losing a third of their value, millions of homeowners ending up underwater in their mortgages, states teetering on the brink of bankruptcy, and the loss of hundreds of thousands of jobs.
So you shouldn't go back to work because some Wall Street high-roller using a Fibonacci extension says that hiring more people might not give an investor the proper pay-off.
I'm certainly not anti-investment. I have a 401k of my own, and my husband has an SEP-IRA . We also have some modest holdings in various stocks and mutual funds. I'm glad that those investments have bounced back somewhat in the last couple of years. But this blind worship of "the market" as the primary measure of the health of our economy is as wrongheaded as it is immoral, because it's what allows pundits to talk about a "jobless recovery" with straight faces. We all know who has recovered here and who hasn't.
I don't think I can sum it up any better than the appropriately-named Rude Pundit, who wrote this in his January 27, 2011 blog (please excuse the coarse language, but vulgar situations call for vulgarity):
"But the bitter, awful, goddamned backwards truth is that even if a company, like, say, Google, wants to hire a shitload of people (in the U.S. and elsewhere), that affects the bottom line, and perhaps Google's stock price will drop below 610 because of nothing else than a fear that it will drop below 610 and perhaps that means the NASDAQ will drop a couple of points and perhaps that means some client of Goldman Sachs will be sad because he can't buy that new fifth house and then Goldman Sachs will call William Daley, Obama's chief of staff from JP Morgan Chase, and say, "What the fuck is going on? C'mon, you know what's important." And then a rule will be changed that will let that sad fucker raid his company's retirement fund and...Jesus, who knows how this shit goes anymore. The complete merging of corporate, financial, and governmental interests has rendered the average citizen as less than a pawn on a chess board. Pawns at least go somewhere before they're sacrificed. Pawns at least have a role in the game."