fun with numbers - wage "inflation"?

[Finster]

Re: fun with numbers - wage "inflation"?

i like the concept of restricted stock, but what's to prevent someone from initiating an offsetting short position in a private account, or buying an option collar. policing this policy is very difficult.

You have to draw the line somewhere. The restricted stock proposal would only apply to the direct relationship of the employee and the company - his compensation package. It's an alternative to options packages. If he chooses to buy, sell or hold on his own, in that respect he's just like any other private individual aside from conventional conflict of interest regulations.

[Finster]

Re: fun with numbers - wage "inflation"?

...maybe if you assume that they also can't otherwise hold stock, and that they aren't still there in four years when they do hold stock under your plan. As soon as either of those happens the incentives are back.

I've got a lot of issues with options as currently implemented, but I don't think restricted stock grants are the answer either. You really want a tool that allows workers who perform well to be able to participate in stock increases (a reflection of stockholders belief in future earnings), rather than just some bonus from current earnings. Well executed this should incent employees to be optimizing for the long term interests of the company.

It is critical to follow the precept of K.I.S.S. Compensation packages are far too complex and it takes a degree in law or accounting to unravel what's in the typical annual report. Complexity is the environment in which abuse flourishes. And with issues like probablistic Black-Scholes valuation, grant dates, terms, etceteras, options are inherently problematic. If it can't be described in plain English in 250 words or less, a compensation plan is immediately suspect.

By simple, I mean the employee gets a wage or salary of X dollars and Y number of four-year restricted shares. Period. As a shareholder, any option compensation whatsoever gets a nay vote from me.

[SeanO]

Re: fun with numbers - wage "inflation"?

By simple, I mean the employee gets a wage or salary of X dollars and Y number of four-year restricted shares. Period. As a shareholder, any option compensation whatsoever gets a nay vote from me.

I'm a fan of K.I.S.S., no issues there. Let me put a finer point on my problem with a grant of shares. The gift of the shares becomes the focus rather than the goal of increasing shareholder value (share price). For example if as a manager at Google (which I'm not) I granted 100 shares of restricted stock to an employee, and the stock increased 10% over the period, they'd get $40k for nothing, and $4k for increasing shareholder value. Plus the company takes an upfront hit for the shares, and shareholder dilution is immediate.

If I use options and I grant 100 shares at a $400 strike price, the employee gets nothing if shareholder value doesn't increase, and $4k for increasing sharehold value 10%. Further if shares aren't exercised they expire and go back to the pool (reducing or eliminating shareholder dilution in the case of non-performance).

So, assuming the goal is to incent increasing shareholder value, I'm struggling with why you favor giving employees $40k for nothing?

I really believe the problem isn't with the concept of options, it's the execution. We'd likely find a similiar problem down the road with restricted grants... the fundamental problem isn't the tools, but those using them.

[Finster]

Re: fun with numbers - wage "inflation"?

I'm a fan of K.I.S.S., no issues there. Let me put a finer point on my problem with a grant of shares. The gift of the shares becomes the focus rather than the goal of increasing shareholder value (share price). For example if as a manager at Google (which I'm not) I granted 100 shares of restricted stock to an employee, and the stock increased 10% over the period, they'd get $40k for nothing, and $4k for increasing shareholder value.

You count the $40K as part of the compensation. Instead of getting, say, $160K in cash and some unknown value in stock options, the employee $120K in cash and $40K in restricted stock. The way the total compensation is divvied up just determines the amount of leverage.

So, assuming the goal is to incent increasing shareholder value, I'm struggling with why you favor giving employees $40k for nothing?

That’s your interpretation. By that logic, wages and salary are given for nothing, too.

Plus the company takes an upfront hit for the shares, and shareholder dilution is immediate.

I think of that as a plus. One of the problems with options is the obscurity of the costs. The more visible and direct costs are, the more the incentive to limit them, and the less incentive to put one over on the shareholders.

If I use options and I grant 100 shares at a $400 strike price, the employee gets nothing if shareholder value doesn't increase, and $4k for increasing sharehold value 10%. Further if shares aren't exercised they expire and go back to the pool (reducing or eliminating shareholder dilution in the case of non-performance).

Kind of makes it into an all-or-nothing proposition. And puts tremendous pressure on the bean-counting department to make the short-term numbers look good. If restricted shares are granted with a four year lock-up, however, no matter what the employee does to create a good appearance, if it didn’t benefit the shareholders longer term, they wouldn’t reap a hollow reward for it.

And what about dividends? Despite ostensibly reasonable PE rations, the dividend yield on stocks is still historically low. And dividend yield is not only historically an important source of returns (in the olden days, it was basically all of it, you didn't buy stocks speculating on a capital gain), but an important predictor of long term returns. Corporations as a whole have a stunningly poor record of investing retained earnings wisely. Not to mention reporting them accurately. Paying earnings out to shareholders is ultimately the only assurance there are any.

There’s a certain symmetry at work. Putting the employee in the same position as options players aligns their interest with options players. Putting them in the position of shareholders aligns their interests with shareholders.

[SeanO]

Re: fun with numbers - wage "inflation"?

You count the $40K as part of the compensation. Instead of getting, say, $160K in cash and some unknown value in stock options, the employee $120K in cash and $40K in restricted stock. The way the total compensation is divvied up just determines the amount of leverage.

May work for an exec, but tough for a guy with a family to feed.

That’s your interpretation. By that logic, wages and salary are given for nothing, too.

I think I was clear that the $40k realistically means nothing towards incenting the employee to increase shareholder value as they get that $40k regardless.

I think of that as a plus. One of the problems with options is the obscurity of the costs. The more visible and direct costs are, the more the incentive to limit them, and the less incentive to put one over on the shareholders.

There is no cost if the goal of increasing shareholder value isn't met (as no one would exercise their options). And it is not unusual at all to pay bonuses if goals are met. Properly implemented options should be a great way of exactly communicating to shareholders what "bonuses" for increasing shareholder value will be, well in advance of that bonus being paid. The issues you site are current implementation issues, not fundamental problems with options.

Kind of makes it into an all-or-nothing proposition. And puts tremendous pressure on the bean-counting department to make the short-term numbers look good. If restricted shares are granted with a four year lock-up, however, no matter what the employee does to create a good appearance, if it didn’t benefit the shareholders longer term, they wouldn’t reap a hollow reward for it.

I don't see why this isn't exactly the case with options too, assuming they are properly implemented with shareholder visibility.

There’s a certain symmetry at work. Putting the employee in the same position as options players aligns their interest with options players. Putting them in the position of shareholders aligns their interests with shareholders.

Incentive Stock Option plans (ISO's) don't share that much in common with stock options beyond setting a strike price. Like your restricted stock, ISO's too have many restrictions and typically vest over a 4 year period.

While I acknowledge your frustration with the games that have been played, I still completely fail to see how restricted stock helps or why the concept (not current implementation) of incentive stock options is so bad.

[Finster]

Re: fun with numbers - wage "inflation"?

May work for an exec, but tough for a guy with a family to feed.

Despite the seductive appearance, there is no free lunch with options. The money still has to come from somewhere. The only question is whether it is come by straightforwardly and directly or with a certain sleight-of-hand. In other words, there is no more net money to feed the family one way or another - unless it is unwittingly contributed by shareholders.

I think I was clear that the $40k realistically means nothing towards incenting the employee to increase shareholder value as they get that $40k regardless.

Not so. If the stock loses 50% in value, they only get $20K.

There is no cost if the goal of increasing shareholder value isn't met (as no one would exercise their options). And it is not unusual at all to pay bonuses if goals are met. Properly implemented options should be a great way of exactly communicating to shareholders what "bonuses" for increasing shareholder value will be, well in advance of that bonus being paid. The issues you site are current implementation issues, not fundamental problems with options.

You’re confusing increasing the stock price with "increasing shareholder value". If the accountants can work things out so that certain earnings targets are met, the stock price may go up, but the company isn’t actually worth more. Moreover, options do not pay dividends, which are an important source of returns for shareholders (see my last post). What’s more, they will become an even greater source of returns in the future as the baby boom generation retires. They’ll either need to sell their stock (and won’t that be great for capital gains...), or they’ll need to get income from them.

I don't see why this isn't exactly the case with options too, assuming they are properly implemented with shareholder visibility.

Incentive Stock Option plans (ISO's) don't share that much in common with stock options beyond setting a strike price.

Yeah, a strike price that can be manipulated to the shareholder’s detriment. The below is not an isolated case; just one of hundreds of examples. Not exactly enhancing shareholder value here are we?

Broadcom's Options Bombshell

…

MASSIVE SCALE. Instead of checking for the latest twists on financial fraud, hundreds of securities market cops, prosecutors, short-sellers, accounting watchdogs, and auditors are busy digging through stock trading patterns, option grants, and e-mails from the 1990s. The Securities & Exchange Commission is investigating more than 100 companies for possible fraudulent option grants. Many of those companies have disclosed they are also being investigated by the Justice Dept. and the Internal Revenue Service.

On Sept. 8, Broadcom (BRCM) provided another sense of the massive scale of the probes when it said it expects to restate earnings to subtract $1.5 billion of options expenses, twice as much as it had estimated on July 14. Broadcom said additional sums are the result of more investigation of its accounts since the earlier announcement.

The company also warned that there's more work being done, particularly on whether it may owe additional taxes. Employee stock options typically are deductible expenses for corporate taxes, but not if they were improperly granted. Linear Technology (LLTC) in a Sept. 8 filing said the IRS had requested documents on Sept. 5, following prior inquiries from the SEC and Justice.

…

http://www.businessweek.com/investor...gn_id=rss_null

Meanwhile, why do you suppose Microsoft gave up stock options in favor of restricted stock?

[SeanO]

Re: fun with numbers - wage "inflation"?

Despite the seductive appearance, there is no free lunch with options. The money still has to come from somewhere. The only question is whether it is come by straightforwardly and directly or with a certain sleight-of-hand. In other words, there is no more net money to feed the family one way or another - unless it is unwittingly contributed by shareholders.

Huh? Yes the money does come from somewhere... it comes from the employee having to buy their options when they excercise. Their only advantage is that in exchange for years of hardwork, they are only required to put the money up if they succeed.

Let's be realistic, for MOST employees, ISO's are a carrot, or bonus, designed to keep everyone focused on building shareholder value. They are not compensation that the employee can count on to feed their family. It's a well defined, long term, bonus. And yes, bonuses do come at an expense. The key is to have bonus plans, including options, defined in such a way that they are a win-win, and options offer real advantages to do so.

Perhaps we would find more agreement on eliminating executive options. I also feel more strongly about them in startups, where employees are asked to take more risk by accepting lower salaries and less benefits than they'd get by going to larger co's.

Not so. If the stock loses 50% in value, they only get $20K.

Exactly my point. If they totally screw up and destroy half the companies value they still get a $20k bonus. If they just maintain with no growth they get $40k. If they actually build and grow the company they get $4k.

Can't you see that under your plan the $4k becomes meaningless?

You’re confusing increasing the stock price with "increasing shareholder value". If the accountants can work things out so that certain earnings targets are met, the stock price may go up, but the company isn’t actually worth more. Moreover, options do not pay dividends, which are an important source of returns for shareholders (see my last post). What’s more, they will become an even greater source of returns in the future as the baby boom generation retires. They’ll either need to sell their stock (and won’t that be great for capital gains...), or they’ll need to get income from them.

So you're blaming options for manipulation of earnings? If it's not options it will be bonuses, or timing on restricted stock, or side deals with friends, or something. I agree that manipulation of earnings is bad, but eliminating options isn't a silver bullet.

Yeah, a strike price that can be manipulated to the shareholder’s detriment. The below is not an isolated case; just one of hundreds of examples. Not exactly enhancing shareholder value here are we?

Only by illegally back dating. I don't see how eliminating options stops illegal behaviour. This issue has been exposed and I believe it can be fixed.

Meanwhile, why do you suppose Microsoft gave up stock options in favor of restricted stock?

Maybe they know more about their real chances for growth than we do. ;-)

[Finster]

Re: fun with numbers - wage "inflation"?

Huh? Yes the money does come from somewhere... it comes from the employee having to buy their options when they excercise. Their only advantage is that in exchange for years of hardwork, they are only required to put the money up if they succeed.

And if they fail, they lose nothing. Not exactly parallel to the shareholder experience.

Exactly my point. If they totally screw up and destroy half the companies value they still get a $20k bonus. If they just maintain with no growth they get $40k. If they actually build and grow the company they get $4k.

Can't you see that under your plan the $4k becomes meaningless?

It’s you that insists on characterizing it as a "bonus". But it’s a distinction without a difference. If you get $100,000, in the end it doesn’t matter whether it is called $20,000 salary and $80,000 bonus or $80,000 salary and $20,000 bonus. It’s just as green either way.

Meanwhile, with the option plan, if they "totally screw up" they lose nothing. There is no downside. They just choose not to exercise. With shares, there is no easy escape. Not only that, but the dividends (which you continue to ignore) which matter to shareholders also matter to them. Not so with options. The company has an asymmetric incentive to retain earnings whether of not it benefits the shareholders at large.

Only by illegally back dating. I don't see how eliminating options stops illegal behaviour. This issue has been exposed and I believe it can be fixed.

Sure it can. Eliminate option compensation.

Meanwhile, it is not lost on me that the mere fact that something was illegal failed to prevent it from happening. Solution? Make it more illegal?

No. Make it simple. You get restricted shares, no probablistic calculations as to their value, no guesswork whether they will be excercised or not, no strike prices, shareholders can know exactly what they’re paying management … K.I.S.S.

Perhaps we would find more agreement on eliminating executive options. I also feel more strongly about them in startups, where employees are asked to take more risk by accepting lower salaries and less benefits than they'd get by going to larger co's.

There’s nothing fundamentally different about startups. The problem is that all that "free" compensation has been courtesy of lying to the shareholders about the real costs of getting off the ground. Millions learned that to their rue in the bursting of the dot-com bubble. And the vast majority of those startups turned out to be economically unviable and went out of business. Our economy is still suffering from this egregious misallocation of capital.

Maybe they know more about their real chances for growth than we do. ;-)

The whole growth paradigm has been hitting a glass ceiling. No matter what you do, no clever accounting manipulation or clever compensation plan can breach it. The net value of the world’s stock market cannot exceed the net value of the world’s assets, and more to the point, it exhibits very powerful mean reversion as a proportion of global GDP per capita. Suppose all companies somehow were able to successfully execute your plan, never pay dividends, and grow their earnings without bound. Do it long enough, and eventually the global stock market cap exceeds the value of the entire planet.

Can’t happen.

I’m posting a chart of the long term global stock price versus global GDP per capita. If there isn’t a natural lid on aggregate stock prices, I’m Warren Buffett.

[SeanO]

Re: fun with numbers - wage "inflation"?

It’s you that insists on characterizing it as a "bonus". But it’s a distinction without a difference. If you get $100,000, in the end it doesn’t matter whether it is called $20,000 salary and $80,000 bonus or $80,000 salary and $20,000 bonus. It’s just as green either way.

Yes, I do insist. They are called "Incentive Stock Options" for a reason. Their sole purpose was to incent (or bonus) performance. They were never intended to be used as a component of base compensation. And like all incentives they should not affect your base if you fail (you should perhaps be fired), and they should provide an award if you succeed. By definition.

Also regarding your concern for dividends, to effectively substitute cash bonuses for ISO's would be a tremendous hit on dividends.

I'm not saying that options haven't been misused, I'm all for fixing that. Accounting practices are misused daily, should we do away with them too? ;-)

No. Make it simple. You get restricted shares, no probabilistic calculations as to their value, no guesswork whether they will be exercised or not, no strike prices, shareholders can know exactly what they’re paying management … K.I.S.S.

There’s nothing fundamentally different about startups. The problem is that all that "free" compensation has been courtesy of lying to the shareholders about the real costs of getting off the ground. Millions learned that to their rue in the bursting of the dot-com bubble. And the vast majority of those startups turned out to be economically unviable and went out of business. Our economy is still suffering from this egregious mis allocation of capital.

Having started a number of companies I can absolutely tell you that there absolutely IS something different about startups. A lack of capital, a lack of earnings, and lots of risk. Options are a tool that allows me to attract talent with a promise of an out sized return if we succeed, while limiting risk to the early shareholders if we fail (by lowering the required investment to attract top talent). It is a VERY proven win-win that I think deserves significant credit in keeping the US economy relevant.

The egregious mis allocation of capital in the dot-com bubble was CAUSED by the introduction of unsophisticated shareholders to the markets, irrational exuberance, and in some cases executive greed, NOT options. There were certainly cases where employees got rich and shareholders later lost everything when the bubble popped... but unless there was some fraud on the employees part, then caveat emptor. While fraud should be prosecuted, and changes should be made to avoid it in the future, shareholders themselves contributed to the creation of that bubble as much or more than anyone else. Unfortunately given the housing bubble the consequences don't appear to have taught "them" anything.

Keep in mind that I completely agree with many of your points regarding the problems. I just completely disagree that restricted stock could ever act as a reasonable substitute for ISO's.

The whole growth paradigm has been hitting a glass ceiling. No matter what you do, no clever accounting manipulation or clever compensation plan can breach it. The net value of the world’s stock market cannot exceed the net value of the world’s assets, and more to the point, it exhibits very powerful mean reversion as a proportion of global GDP per capita. Suppose all companies somehow were able to successfully execute your plan, never pay dividends, and grow their earnings without bound. Do it long enough, and eventually the global stock market cap exceeds the value of the entire planet.

Can’t happen.

I completely agree, and it is a reason I'm a fan of options. While total growth may have hit a glass ceiling, it won't sit still. There will still be startups and companies that grow, while others wither or fail. Growing or starting a company when the market is otherwise stagnant is VERY HARD. It requires taking market share from others. There should be upside or "Incentive" to the employees in the event they accomplish that. Restricted stock is useless for this purpose. And YES it is reasonable not to retroactively take away base compensation that they use to feed their families if they fail.

You mentioned Microsoft's switch to restricted stock. Have you also noticed the incredible brain drain they've had to startups, Google, etc. I don't blame the switch to restricted stock for the drain, I blame the lack of growth which creates a lack of opportunity for the rewards that SHOULD come with achieving growth. Also I truly doubt early investors in Microsoft complain about all the employees that got rich on options, they got more than a reasonable return themselves.

Here's the real reason Microsoft switched to restricted stock: eliminating options as you propose would give them a huge competitive advantage. Options are really only a powerful incentive at high growth companies... Microsoft is no longer that, but most of their current, and potential, competition IS.

[Finster]

Re: fun with numbers - wage "inflation"?

Yes, I do insist. They are called "Incentive Stock Options" for a reason. Their sole purpose was to incent (or bonus) performance. They were never intended to be used as a component of base compensation. And like all incentives they should not affect your base if you fail (you should perhaps be fired), and they should provide an award if you succeed. By definition.

Hmmm … a no lose proposition. No exactly very well aligned with the position of the shareholder, right? Own stock, you might gain, you might lose.

No wonder you are such a great fan of stock option compensation. I bet you really like free lunches, too. ;-)

Having started a number of companies I can absolutely tell you that their absolutely IS something different about startups. A lack of capital, a lack of earnings, and lots of risk. Options are a tool that allows me to attract talent with a promise of an out sized return if we succeed, while limiting risk to the early shareholders if we fail (by lowering the required investment to attract top talent). It is a VERY proven win-win that I think deserves significant credit in keeping the US economy relevant.

And it is extremely important for the overall health of the economy that capital is hard to come by. You must have missed the point I just made about the economy still suffering from the tremendous waste of capital during the dot-com boom. Had even a fraction of that gone into energy exploration and alternative energy, we wouldn’t be in the pickle we’re in now.

Those stock options made it too easy to get capital. The simple truth is that at any given moment there is only a finite amount of real capital in the world. Capital should be hard to come by. That which is not regarded as precious is soon wasted. If some trick gives some enterprises an artificial advantage over others, then the capital allocation function of our free market system is frustrated. Capital is misallocated. The economy suffers.

You mentioned Microsoft's switch to restricted stock. Have you also noticed the incredible brain drain they've had to startups, Google, etc. I don't blame the switch to restricted stock for the drain, I blame the lack of growth which creates a lack of opportunity for the rewards that SHOULD come with achieving growth. Also I truly doubt early investors in Microsoft complain about all the employees that got rich on options, they got more than a reasonable return themselves.

More of the same unfounded assumption that growth and profits are indistinguishable. I suppose Microsoft was supposed to keep growing at 25% a year until it swallowed up the entire planet?

I pointed out earlier that getting your return from stock price appreciation is not normal in the context of history. The dividend yield on stocks only fell below the yield on bonds in any sustained way for the very first time around 1960, just when the last stock bubble was getting going. Despite the fact that the US economy as a whole produced more innovation, growth, and advancement in living standards in the nineteenth and early twentieth centuries. In the broad sweep of history, long term stock price appreciation is caused more than anything else by the same thing that causes other prices to rise - inflation.

The egregious mis allocation of capital in the dot-com bubble was CAUSED by the introduction of unsophisticated shareholders to the markets, irrational exuberance, and in some cases executive greed, NOT options…

All without first cause? Just for some mysterious reason, unsophisticated shareholders started pouring their money into dot-coms? And greed made its first appearance in the human race?

And this speaks right to my point about simplicity. Exactly how sophisticated should you have to be to own stock? Only lawyers and accountants need apply?

[SeanO]

Re: fun with numbers - wage "inflation"?

And this speaks right to my point about simplicity. Exactly how sophisticated should you have to be to own stock?

AT THE MOMENT THINGS ARE SO SCREWED UP YOU NEED TO BE IMPOSSIBLY SOPHISTICATED, which is why I don't presently own stocks. If every investor that couldn't understand the companies business model, growth plan, accounting, incentive plans, etc. just didn't invest, we wouldn't have a problem. And very shortly thereafter we'd have extremely well articulated business models, understandable books, and clear incentive programs (including ISO's). The shareholder is the key. They will get what they pay for. And right now they are throwing money at companies blindly and are getting what they deserve for their lack of effort. Caveat emptor.

This is why the early sophisticated investors win, even with options, and the wanna-be, me-too, follow-on, fools get caught in a bubble. They are playing a game they don't understand. They continue to play even after they're stupidity is clearly demonstrated. And rather than looking at themselves, they blame their stupidity on options. A great tool that is really powerful in fairly distributing risk and reward in startups... a fact that nearly all sophisticated statup investors (shareholders) completely agree with (just listen to the venture capital community on this subject).

[bart]

Re: fun with numbers - wage "inflation"?

I’m posting a chart of the long term global stock price versus global GDP per capita.

NICE chart!

Looks like you might be able to do a global relative
over and under valuation chart based on that GDP/capita stat, although I'm not sure how valuable it would be for this crowd.

[Finster]

Re: fun with numbers - wage "inflation"?

AT THE MOMENT THINGS ARE SO SCREWED UP YOU NEED TO BE IMPOSSIBLY SOPHISTICATED, which is why I don't presently own stocks. If every investor that couldn't understand the companies business model, growth plan, accounting, incentive plans, etc. just didn't invest, we wouldn't have a problem. And very shortly thereafter we'd have extremely well articulated business models, understandable books, and clear incentive programs (including ISO's). The shareholder is the key. They will get what they pay for. And right now they are throwing money at companies blindly and are getting what they deserve for their lack of effort. Caveat emptor.

This is why the early sophisticated investors win, even with options, and the wanna-be, me-too, follow-on, fools get caught in a bubble. They are playing a game they don't understand. They continue to play even after they're stupidity is clearly demonstrated. And rather than looking at themselves, they blame their stupidity on options. A great tool that is really powerful in fairly distributing risk and reward in startups... a fact that nearly all sophisticated statup investors (shareholders) completely agree with (just listen to the venture capital community on this subject).

I hear ya, Sean, and this is a point some of my earlier posts have touched on. Wall Street likes interest rates as low relative to inflation as possible, and is heavily biased in favor of Fed ease. Whether it's concious of it or not, I think it is because it makes traditional savings a losing proposition, and at the margin forces money that otherwise would have gone there into the stock market. This makes capital artifically cheap for corporations, and gives managements a large base of relatively unsophisticated shareholders who won't question what they are doing as long as their stock is going up.

This partly explains the attraction of gold and other alternative investments over the past few years. People have become skeptical of not only traditional savings, but stocks as well. When corporations can print share certificates like the government does greenbacks, you have inflation and dilution not only in the currency of the government but in that of corporations as well. People have been fleeing to just about anything that can't be inflated.

[Finster]

Re: fun with numbers - wage "inflation"?

NICE chart!

Looks like you might be able to do a global relative
over and under valuation chart based on that GDP/capita stat, although I'm not sure how valuable it would be for this crowd.

This was part of what I was referring to when I mentioned to you in email "finding some interesting things". The long term correlation between global per capita GDP and stock prices is remarkable.

[bart]

Re: fun with numbers - wage "inflation"?

This was part of what I was referring to when I mentioned to you in email "finding some interesting things". The long term correlation between global per capita GDP and stock prices is remarkable.

Indeed... and definite http://www.nowandfutures.com/grins/applause.wav too.
Its a unique look - I've never seen anything like it.

Charting freaks are people too... ;)