Monday, July 25, 2005

Disappointed With Today's Market Performance?

For those who were rather disappointed with the Dow Jones, Nasdaq, and S&P performances today, I present you with a novel index that may cheer you up. The Alcoholic-Beverage-Consumer Confidence index skyrocketed last night finally settling at 94.2 points at last call. Analysts are contributing the blistering performance to higher alcohol content, mix drink innovation, and two-for-one discount offers.

David Watts, a Federal Reserve analyst, claims that "The short-term gains reaped by alcohol consumers can easily lead to an atmosphere of irrational exuberance. Decisions made during this period are historically ill-considered and often sorely regretted. Fortunately, the market often corrects itself within several hours, when alcoholic-beverage-consumer confidence shifts into lethargy, loneliness, and maudlin conversations about relationship troubles. In severe cases, however, these spikes can trigger a depression." Click here for the full article.

Ain't that the truth. I think this would be a good place to tell you all about my matured homebrew. If you are a regular here, then you would remember from a recent post that I was brewing some beer. The IPA has finally matured to both a drinkable and enjoyable state. It is somewhat too carbonated but it still has an exotic and rememberable flavor. Remember, one's beer must be experienced before you can appreciate the full force of its character. The beer must carbonate at goldilock times- not too long, not too short, but juuust right.


Anonymous Anonymous said...

Dude, that was hilarious. Irrational exuberance is right. Are you insinuating that alcohol consumption and the Dow etc. are inversely proportional, to some degree? Because, it's possible that it is the contrary. Some people drink to forget, others to celebrate.


12:26 AM  
Blogger David Yaffe said...


That was very thoughtful! To answer your correlation questions, I have no idea whether or not "real" consumer confidence has any relationship with alcohol consumption.

In a depression, I am sure consumers are pretty, well you know, depressed. So it would be rational to expect them to drink. However, if things are really bad (like the stock market crashes), a bottle of beer might cost your entire retirement savings.

So those "forgeters" might want to drink, but they would only be so lucky if they could afford the inflated prices.

Just a thought

11:03 AM  
Anonymous nick said...

In somewhat unrelated news, but something I imagine Judge Yaffe might be interested in, a group of students in Copenhagen are testing an open source software technique with beer recipes. (A double score for you Dave! Home brew and economics!)
Basically, rather than propriety software, which is private and only sold to consumers, they are making these recipes public information. Consumers can use the recipes and improve on them. If they choose to sell their alteration, the only requirement is that they attribute the Copenhagen brand "Our Beer" with the original idea.
The point, as I see it, is to test how technology can be improved in a market where there are no copyright or patent laws limiting the sale of new and likely better products just because they are a spinoff.
What's your take JY?

11:55 AM  
Blogger David Yaffe said...


Thanks for the feedback/article. Typically, firms like strict proprietary laws because they protect a firm's "proprietary asset" from other companies looking to share the profits. When a company, lets use the pharmaceuticals as an example, creates a good (medicine), it wants to have strong protection on the good because they spent millions of dollars on research and development (R&D). I can understand why firms would want this protection and for it to be very stringent.

Foreign direct investment (FDI), usually wants strict intellectual property rights. The more strict laws are, the more firms would ant to invest in a country where they don't have to fear other firms/people copying their products.

But beer is a completely different good, and this idea these guys have is a good one. Both the web-browser and email client I use are "open-source" , and they are far better than Microsoft software. They aren't as susceptible to viruses and ad-ware.

Usually, strong intellectual property rights titillate innovation and better products, and firms who develop these products want that. However, beer is another story. This idea sounds good right now, and for people just interested in pleasing their palate and not concerned with making money, I think it is a good thing.

We might see problems down the road when someone starts to make a killing and the original recipe creators get jealous and want a piece of the pie.

12:27 PM  

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