Today [08/15/07], the Graham-Dodd approach produces a very different picture from the one that Wall Street has been offering. Based on average profits over the last 10 years, the P/E ratio has been hovering around 27 recently. That’s higher than it has been at any other point over the last 130 years, save the great bubbles of the 1920s and the 1990s. The stock run-up of the 1990s was so big, in other words, that the market may still not have fully worked it off.

At noon today [10/10/08], after several gyrations in the morning, the Standard & Poor’s 500-stock index was at about 870. That meant the five-year p-e ratio was just below 12. (The corporate earnings data isn’t all available yet, so this is an estimate.) It was last that low in late 1985. Over the past 100 years, the average p-e has been about 15.5.

If you use a 10-year p-e instead, stocks look somewhat more expensive — the [current 10-year] ratio is 14, the lowest since 1988 but only a little lower than the 100-year average.

In August 2007, the 10-year price-earnings (P/E) ratio was 27.

In October 2008, the 10-year P/E ratio is 14, below the 100-year P/E (15.5) but above the "long-run average" for the depressions of the 30's and 80's (6).

-janelane, trying to make sense of my inferior 401k

Remembering a Classic Investing Theory - New York Times

During the nineteenth century, Britain became the first gaslit society, with electric lighting arriving in 1878. At the same time, the British government significantly expanded its power to observe and monitor its subjects. How did such enormous changes in the way people saw and were seen affect Victorian culture? To answer that question, Chris Otter mounts an ambitious history of illumination and vision in Britain, drawing on extensive research into everything from the science of perception and lighting technologies to urban design and government administration. He explores how light facilitated such practices as safe transportation and private reading, as well as institutional efforts to collect knowledge. And he contends that, contrary to presumptions that illumination helped create a society controlled by intrusive surveillance, the new radiance often led to greater personal freedom and was integral to the development of modern liberal society.

The Victorian Eye: A Political History of Light and Vision in Britain, 1800-1910

No longer just a civil matter to blithely ignore, this ominous development could result in current and high level officials being indicted for crimes. I suspect the special counsel will "follow the emails" in the way that "follow the money" brought down Nixon's men during Watergate.

I'd like to know what Iglesias thinks about the potential for RICO charges coming out of all this.

David C. Iglesias: Dangerous New Turn in Justice Department Investigation

But if a stock market's performance is the test of a policy, this one has failed. At best, the passage of the measure did no evident good. At worst, it backfired.

Harvard economist Jeffrey Miron suspects the latter. "The bailout approach will generate uncertainty about what's going to happen," he told me. "It's quite plausible that it has not calmed markets because no one knows what it means."

Rescue or Waste?: Why the bailout isn't working - Reason Magazine

Tannerite Binary Exploding Target Company

WTF?

Tannerite Exploding Targets from Tannerite Explosives Corporation - Manufacturer of High Explosives, Low Explosives and Fireworks

Jeffrey Nelson, a spokesman for Verizon, said the company was exploring ways to charge fees to commercial senders of text messages to add a new revenue stream to its wireless business.

“It is not a free service,” Mr. Nelson said. “It didn’t cost us zero to build or to buy spectrum rights.”

This is obscene. The marginal cost to deliver SMS is practically zero.

Verizon Wireless Plans to Charge Senders of Text Messages - NYTimes.com

GM said in a statement Friday that bankruptcy protection was "not an option."

But the stock plunge effectively puts both companies on death watch, and it's easy to see why. The ratings warnings followed a new report by Global Insight that shows U.S. auto sales hitting recession levels this year - and then sinking lower in 2009.

The GM, Ford death watch - Oct. 9, 2008

Curiosity is the main driving force behind scientific activity. Scientific curiosity, insatiable in its explorations, does not know what it will find, or where it will lead. Science needs autonomy to cultivate this kind of untrammeled curiosity; innovation, however, responds to the needs and desires of society. Innovation, argues influential European science studies scholar Helga Nowotny, tames the passion of science, harnessing it to produce "deliverables." Science brings uncertainties; innovation successfully copes with them. Society calls for both the passion for knowledge and its taming. This ambivalence, Nowotny contends, is an inevitable result of modernity.

In Insatiable Curiosity, Nowotny explores the strands of the often unexpected intertwining of science and technology and society. Uncertainty arises, she writes, from an oversupply of knowledge. The quest for innovation is society's response to the uncertainties that come with scientific and technological achievement. Our dilemma is how to balance the immense but unpredictable potential of science and technology with our acknowledgment that not everything that can be done should be done. We can escape the old polarities of utopias and dystopias, writes Nowotny, by accepting our ambivalence—as a legacy of modernism and a positive cultural resource.

Insatiable Curiosity: Innovation in a Fragile Future

Today, personal information is captured, processed, and disseminated in a bewildering variety of ways, and through increasingly sophisticated, miniaturized, and distributed technologies: identity cards, biometrics, video surveillance, the use of cookies and spyware by Web sites, data mining and profiling, and many others. In The Privacy Advocates, Colin Bennett analyzes the people and groups around the world who have risen to challenge the most intrusive surveillance practices by both government and corporations. Bennett describes a network of self-identified privacy advocates who have emerged from civil society—without official sanction and with few resources, but surprisingly influential.

A number of high-profile conflicts in recent years have brought this international advocacy movement more sharply into focus. Bennett is the first to examine privacy and surveillance not from a legal, political, or technical perspective but from the viewpoint of these independent activists who have found creative ways to affect policy and practice. Drawing on extensive interviews with key informants in the movement, he examines how they frame the issue and how they organize, who they are, and what strategies they use. He also presents a series of case studies that illustrate how effective their efforts have been, including conflicts over key-escrow encryption (which allows the government to read encrypted messages), online advertising through third-party cookies that track users across different Web sites, and online authentication mechanisms such as the short-lived Microsoft Passport. Finally, Bennett considers how the loose coalitions of the privacy network could develop into a more cohesive international social movement.

The Privacy Advocates: Resisting the Spread of Surveillance

Brian Greene:

From one of America's leading physicists--a moving and visually stunning futuristic re-imagining of the Icarus fable written for kids and those journeying with them toward a deeper appreciation of the cosmos.

With a minimum of words set on 34 full color pages, Icarus travels not to the sun, but to a black hole, and in so doing poignantly dramatizes one of Einstein's greatest insights.

Unlike anything Brian Greene has previously written, Icarus at the Edge of Time uses the power of story, not pedagogy, to communicate viscerally one small part of the strange reality that has emerged from modern physics. Designed by Chip Kidd, with spectacular images from the Hubble Space Telescope, it's a short story that speaks to curiosity and wisdom in a universe we've only begun to fathom.

From the archive:

Oh! I feel it. I feel the cosmos!

Icarus at the Edge of Time