Consuming Mindless Consumption

From the NYT

Consumer spending in the United States, which is still on the rise, accounts for an astonishing 20 percent of the global economy. ...

Consumer spending hasn’t fallen for a single quarter since the fourth quarter of 1991. And while there are factors affecting domestic consumer spending — higher interest rates, lower housing prices, higher gas prices — the indefatigable American spenders show few signs of letting up.

And while they mindlessly consume, robots are being trained to trade the companies they buy from:

Quants seek to strip human emotions such as fear and greed out of investing. Today, their brand of computer-guided trading has reached levels undreamed of a decade ago. A third of all U.S. stock trades in 2006 were driven by automatic programs, or algorithms, according to Boston-based consulting firm Aite Group LLC. By 2010, that figure will reach 50 percent, according to Aite.

And while the hedge funds are betting with bots, Buffet wants up to 4 people to take his place, and thinks the price of a CEO is rarely too much if they perform:

"Compensation sins are generally of minor importance compared to the sin of having someone mediocre running a huge company," Buffett said.

Links snagged from my favorite investment blog.

Posted at May 7, 2007 3:04 AM