Video: Google Search: The Reunion (What GDP can't capture)

Hat tip Cafe's Hayek's Russ Roberts; Source Google India

Phisix: US Debt Ceiling Deal and UNTaper Spurs a Global Melt UP

Melt Up!

Melt UP!

Suddenly stock markets metastasize into a frenetic melt-up mode.

In the US, the S&P 500, the S&P 400 Mid-caps and the small cap Russell 2000 set new record highs. 

The German Dax and the French CAC also carved fresh landmark highs. 

In Asia, Australia’s S&P ASX, and India’s Sensex shared a similar feat. Ironically just a few months back the Indian economy seemed as staring into the abyss—to borrow from German Philosopher Friedrich Nietzsche[1]. How confidence changes overnight

And knocking at the door of historic highs are New Zealand Exchange 50 Gross, South Korea’s KOSPI, Taiwan’s TWSE, Hong Kong’s Hang Seng, and Malaysia’s KLSE

Media explains the melt up as a function of the debt ceiling deal and extended US Federal Reserve ‘credit easing’ stimulus. From Bloomberg, “U.S. stocks rose, sending the Standard & Poor’s 500 Index to a record, as speculation grew that the Federal Reserve will maintain the pace of stimulus after Congress ended the budget standoff.”[2]

Thus the common denominator in explaining the melt-up has been the market’s worship of debt expressed via the orgy of the speculative hunt for yields in the asset markets, particularly the stock markets.

Will the global melt-up influence the Phisix, the likely answer is yes. But….

How the FED Alters the Priorities of US Corporations

Goldman Sach's chief US equity strategist, David Kostin has been quoted as attributing the current US stock market surge on P/E multiple expansion, “The S&P 500 has returned 22% YTD driven almost entirely by P/E multiple expansion rather than higher earnings.”[3]

 

This means record US stocks has hardly been about earnings growth but of the aggressive bidding up of the equities.

More signs of the yield chasing frenzy.

In addition, as pointed out above by Blackstone Group’s Byron Wien[4], S&P 500’s net income has been on a decline since 2010. This decline has been accompanied by a slowing of earning per share growth (y-o-y).

Yet, the modest gains in the growth rate of the S&P’s EPS have mainly been bolstered by share buybacks. 

And as previously pointed out[5], a substantial portion of corporate share buybacks has been financed by bonds which remains a present dynamic[6]. 

In other words, the FED’s easy money policies, including the “UNTaper” have been prompting many publicly listed companies to shore up or ‘squeeze’ earnings growth via debt-financed corporate buybacks meant to raise prices of their underlying stocks.

Share buybacks has essentially substituted the capital or investment based expansion or the organic earnings growth paradigm. Said differently, publicly listed corporations have joined the herd in the feverish speculation on stocks rather than investing in the real economy.

This also means that the yield chasing mentality has infected the corporate board rooms, where corporate models appear to have been reconfigured to focus on the immediate attainment of higher share prices. 

And a recent research paper has underscored such changes. Stern School of Business John Asker, Harvard’s Joan Farre-Mensa and Stern School of Business Alexander Ljungqvist finds[7], (bold mine)

Listed firms invest substantially less and are less responsive to changes in investment opportunities compared to matched private firms, even during the recent financial crisis. These differences do not reflect observable economic differences between public and private firms (such as lifecycle differences) and instead appear to be driven by a propensity for public firms to suffer greater agency costs. Evidence showing that investment behavior diverges most strongly in industries in which stock prices are particularly sensitive to current earnings suggests public firms may suffer from managerial myopia.

So short-termism, mainly brought about by the Fed’s policies, has afflicted many of the publicly listed firm’s priorities. Many executive officers and shareowners have presently elected to use the unsustainable speculative financing model of boosting earnings that yields temporal benefits for them.

This essentially defies Ben Graham’s 1^st rule of margin of safety where companies should stick to what they know or ‘know your business’ and to avoid to making ““business profits” out of securities—that is, returns in excess of normal and dividend income” as I showed last week[8].

Yet all these will depend on the persistence of easy money regime, the suppression of the bond vigilantes and the sustainability of debt financed buyback model.

So while most publicly listed US companies have yet to immerse themselves into Ponzi financing, sustained easy money policies have been motivating them towards such direction.

A Dot.com Bubble Déjà vu? Google as Symptom?

The scrapping for yields has impelled many to jump on the IPO bandwagon despite poor track record of newly listed companies. 

According to the Wall Street Journal, 19 out of 28 or 68% of the technology issues which debuted this year has been unprofitable over the last fiscal year or during the past 12 months, which has been the highest percentage since 2007 and 2001. Yet punters wildly piled on them.

The same article notes of intensifying signs of mania “The excitement over companies’ potential rather than their present results is the latest sign in the stock markets of a rising tolerance for risk. The U.S. IPO market, often seen as a gauge of risk appetite because the stocks don’t have a track record, is on pace to produce the most deals since 2007, according to Dealogic”[9]

And Art Cashin UBS Financial Services director of floor operations at a recent CNBC interview expressed worries over a remake of the dotcom bubble, “The way people are treating technology companies, it's starting to feel a bit too much like 1999 and 2000”[10]

1999, 2000 and 2007 signifies as the zenith of the dotcom (1999-2000) bubble and the US housing bubble (2007)

Has Google been leading the way?

Google’s [GOOG] stock breached past the US$ 1,000 levels (particularly $1,011.41) with a breath-taking 13.8% gap up spike last Friday.

At market cap of over $335 billion, Google surpassed Microsoft [MSFT] and is now the third largest company after Apple [APPL] and Exxon Mobile [XOM][11].

Since Google is a member of the S&P 500[12], Friday’s quantum leap materially contributed to the new record of the major S&P bellwether (SPX). 

And as shown in the same chart, the S&P 400 mid cap and the small cap Russell 2000 flew to the firmament last week.

Three of the 5 largest S&P companies are from the information technology. In addition, technology comprises the largest sectoral weighting at 17.7% on the S&P, followed closely by financials 16.5%, and from a distance, Healthcare 13.2%, consumer discretionary 12.3% and the others. 

Should the technology mania persist, this will be reflected on the relative strength of sector, as well as, through a bigger share of the same sector in the S&P 500’s sectoral weighting.

Surprise 3rd quarter revenue growth of 23% from advertising part of which came from the mobile platform and Wall Street “emotion” has been attributed to Google’s spectacular price spike.

This Yahoo article[13] says that part of adrenaline rush on Google’s share prices has been to due low exposure on stocks by institutional investors (bold mine)

Google is higher today because it reported strong numbers, but it's not a 10% better company today than it was 24 hours ago. Wall Street is in a manic phase at the moment. For all the terrific things about Google's third-quarter, the best thing about the report was that it came on a day when institutional investors are feeling like they have far too little exposure to stocks. The average hedge fund was up less than 10% through September and there weren't many people expecting this race to new highs on the S&P500 (^GSPC) on the heels of debt ceiling debacle.

In short, more signs of frantic yield chasing.

Google’s reported 3rd quarter earnings of $10.74 per share[14], which came ahead of consensus estimates of $10.34.

While I am a fan of Google’s products, I hardly see value in Google’s stocks. 

Yahoo data[15] shows that Google has a trailing PE (ttm or trailing twelve months intraday) at 27.52, forward PE (fye or fiscal year end: December 2014) at 19.42, Price/book (mrq or most recent quarter) 3.75 and enterprise multiple of enterprise/ebitda (ttm or trailing twelve months) at 16.14.

The above multiples exhibit how richly priced GOOG has been

The same applies to the general stock market

Based on the prospects of continued declining earnings growth rate and based on the trailing PE[16], as of Friday’s close, the Dow Industrials has a ratio of 17.24, from last year’s 14.47, the S&P 500 at 18.32 from 17.03 a year ago and the Nasdaq 100 at 20.88 from last year’s 15.24. 

Most shockingly, the small cap Russell 2000 has a PE ratio of 86.58 from 32.69 a year ago! The Russell PE ratio more than doubled this year. Wow.

While I have not encountered GOOG resorting to share buybacks yet, GOOG’s increasing recourse to debt to finance[17] her operations has hardly been an attraction.

What perhaps may justify GOOG’s current prices is the prospect of success from its upcoming products such as the driverless cars, Google Glass and the cloud based planning applications called the “Genie” targeted at the construction industry[18].

But this would be audacious speculation.

And overconfidence has become a dominant feature.

Aside from stock market bulls brazenly hectoring and scoffing at the bears, market participants have been conditioned to see stock markets as a one way street.

For instance, record stocks which brought about the biggest single-day decline in U.S. equity volatility since 2011 rewarded the bullish option traders who aggressively doubled down on bets that the bull market in stocks would survive the default deadline[19].

The consensus has been hardwired to see any stock market decline as opportunity to “double down”.

For the bulls, risks have vanished. The stock market’s only designated direction seems up, up and away.

Yet the bullish consensus seems oblivious to the reality of the deepening dependence the stock market (and even housing) has been to the Fed’s credit easing measures. They are ignoring the fact that corporate business models have been evolving towards speculation, rather than to productive investments. Expanding price multiples, declining net income and EPS growth rate, increasing dependence on buybacks and debt financing for speculation are symptoms of such transition.

Aside from corporations, the convictions of bullish market participants are being reinforced by evidences of more aggressive actions.

While I don’t expect the FED to take the proverbial punch bowl away, everything depends on the actions of the bond vigilantes. For now, the bond vigilantes have been in a retreat. The hiatus by the bond vigilantes provides room for the bulls to magnify on their advances. Question is for how long?

If QE 3.0 in September of 2012 pushed backed the bond vigilantes for only 3 months, will the euphoric effects of the UNtaper, Yellen as Fed Chairwoman, debt ceiling deal last longer?

The French Disconnect

As I pointed out above, the UNtaper-debt ceiling deal has incited many markets to a melt-up mode which media rationalizes as “recovery”.

The French stock market, which is also at record highs, serves as an example.

The CAC 40 has been rising since the last quarter of 2011. Yet during 2012-2013, as the CAC rose, the French economy vacillated in and out of negative growth rates or recessions. While economic growth statistics reveal of a recent recovery, sustainability of the recovery is unclear.

French industrial production was down 1.6% in August[20], Unemployment rate is at the highest level since 1998 at 10.9% at the second quarter[21]. August loans to the private sector have been trending downwards since May[22]. Fitch downgraded France last July[23]. [note to the aficionados of credit rating agencies, French downgrade coincided with higher stocks]

Yet the CAC continues to trek to new highs. What gives?

Notes on the Debt Ceiling Deal

Furloughed Federal employees will receive a back pay[24]. This means government shutdown for furloughed employees extrapolates to a paid vacation.

The bi-partisan horse trading resulted to insertions of various goodies (Pork) for politicians. This includes $174,000 death benefit for Sen. Frank Lautenberg’s widow[25]

The US treasury will be authorized to suspend the debt ceiling as I earlier posted[26]. A limitless borrowing window will be extended until February 7, 2014[27].

This marks the second time when the debt ceiling has been unilaterally suspended. The first occurred this year from February 4, 2013 to May 18, 2013[28].

What seems as an increasing frequency of the suspension of the debt ceiling (twice this year) may presage a permanent one.

A day past the US debt ceiling deal, US debt soared by a record $328 billion. This has shattered the previous high of $238 billion set two years ago as the US government reportedly replenished its stock of “extraordinary measures” used to keep debt from going past he mandated level[29]. This brings US debt to $17.075 trillion Thursday.

Two days after, US debt further expanded by $7 billion to $17,082,571,268,248.24[30].

Debt levels growing at a rate far faster than the rate of economic growth is simply unsustainable.

Since 2008, US Federal has grown past $ 7 trillion whereas the economy grew by nearly $1 trillion[31].

There is always a consequence to every action, so will the above.

Yet this is what equity market praises.

---

[1] Friedrich Nietzsche CHAPTER IV: APOPHTHEGMS AND INTERLUDES Beyond Good and Evil, p 107 planetpdf.com

[2] Bloomberg.com S&P 500 Surges to Record on Fed Bets After Debt Deal, October 18, 2013

[3] Zero Hedge Goldman: Entire S&P Move Higher Is Due To Multiple Expansion; Shiller P/E Says 30% Overvalued So... Buy

[4] Business Insider Net Income is Actually Declining even as Earnings Rise, Wall Street's Brightest Minds Reveal THE MOST IMPORTANT CHARTS IN THE WORLD, October 9, 2013

[5] See Phisix: Rising Systemic Debt Erodes the Margin of Safety October 14, 2013

[6] Reuters.com Bond-backed stock buybacks remain in vogue September 6, 2013

[7] John Asker, Joan Farre-Mensa and Alexander Ljungqvist Corporate Investment and Stock Market Listing: A Puzzle? April 22, 2013 Social Science Research Network

[8] See Phisix: Rising Systemic Debt Erodes the Margin of Safety October 14, 2013

[9] The Wall Street Journal Market Pulse In Latest IPOs, Profits Aren’t the Point October 11, 2013

[10] CNBC.com Cashin: Tech valuations remind me of dot-com bubble October 17, 2013

[11] FoxNews.com Boom: Google Zooms 13% to a Record High; Market Cap Tops $335B October 18, 2013

[12] S&P Dow Jones McGraw Hill Financial S&P 500 Indices Fact Sheet

[13] Jeffe Macke Is Google Worth $1,000 a Share? Yahoo.com October 18, 2013

[14] Google Investor Relations Google Inc. Announces Third Quarter 2013 Results

[15] Yahoo Finance, Google Inc. (GOOG) Key Statistics

[16] The Wall Street Journal Market Data Center US Stocks

[17] 4-traders.com Google Inc (GOOG)

[18] Businessinsider.com Google's Secret Project 'Genie' Could Transform The Construction Industry October 18, 2013

[19] Bloomberg.com VIX 21% Tumble Means Shorts on Volatility Double Money October 17, 2013

[20] Tradingeconomics.com FRANCE INDUSTRIAL PRODUCTION

[21] Tradingeconomics.com FRANCE UNEMPLOYMENT RATE

[22] Tradingeconomics.com FRANCE LOANS TO PRIVATE SECTOR

[23] Bloomberg.com France Loses Top Credit Rating as Fitch Cites Lack of Growth July 13, 2013

[24] Fox News.com Senate budget deal provides back pay for furloughed federal workers October 16, 2013

[25] Abcnews.com $174,000 to a Senator’s Widow and Other Surprises in the Fiscal Compromise Bill October 16, 2013

[26] See Quote of the Day: There is now No Limit in government borrowing October 18, 2013

[27] US Congress H.R.2775 - Continuing Appropriations Act, 2014

[28] The Foundry Debt Ceiling with $300 Billion in New Debt, Heritage Foundation, May 19, 2003

[29] Washington post U.S. debt jumps a record $328 billion — tops $17 trillion for first time October 18, 2013

[30] Brilling.com U.S. NATIONAL DEBT CLOCK

[31] Lance Roberts The Long Game Of Hiking The Debt Ceiling STA Wealth October 11, 2013

War on Internet: Google Reports Increasing Government Requests for Censorship

Governments of western economies has been breathing down the neck of Google to censor ‘political’ content on Google’s cyberspace.

From TGDaily.com

Google's released data on the governments aiming to censor internet content, and says it's seen a worrying rise in the number of such requests from Western democracies.

In the second half of last year, for example, Spanish regulators asked for the removal of 270 search results that linked to blogs and newspaper articles referencing individuals and public figures, including mayors and public prosecutors.

One example that's more entertaining than chilling came from the Canadian authorities. They called for the removal of a YouTube video showing a man urinating on his passport and flushing it down the toilet. Google let the video stand.

"When we started releasing this data in 2010, we also added annotations with some of the more interesting stories behind the numbers. We noticed that government agencies from different countries would sometimes ask us to remove political content that our users had posted on our services. We hoped this was an aberration. But now we know it’s not," says senior policy analyst Dorothy Chou…

Google also received a number of requests from US law enforcement agencies. One concerned a blog post alleged to defame a law enforcement official in a personal capacity; another a series of 1,400 YouTube videos that were claimed to constitute harassment.

Google has so far ‘refused to comply’ with these requests and thus deserves a pat on the back.

Google earlier announced that they will warn users of state sponsored privacy intrusions.

My guess is that governments will continue to pressure Google, but perhaps more through indirect channels (taxes, licenses, anti-trust etc..) to get their wishes done.

Will Google eventually cave in?

War on Internet: Google will warn Users of State Sponsored Attacks

Hail Google. Google will warn their users of state sponsored privacy intrusions.

From Foreign Policies the Cable

UPDATE: A senior Senate aide confirmed that this evening he received a warning on his Gmail account that Google suspected he had been the target of a state-sponsored cyber attack.

Web giant Google is about to announce a new warning informing Gmail users when a specific type of attacker is trying to hijack their accounts -- governments and their proxies.

Later today, the company will announce a new warning system that will alert Gmail users when Google believes their accounts are being targeted by state-sponsored attacks. The new system isn't a response to a specific event or directed at any one country, but is part and parcel of Google's recent set of policy changes meant to allow users to protect themselves from malicious activity brought on by state actors. It also has the effect of making it more difficult for authoritarian regimes to target political and social activists by hacking their private communications.

"We are constantly on the lookout for malicious activity on our systems, in particular attempts by third parties to log into users' accounts unauthorized. When we have specific intelligence-either directly from users or from our own monitoring efforts-we show clear warning signs and put in place extra roadblocks to thwart these bad actors," reads a note to users by Eric Grosse, Google's vice president for security engineering, to be posted later today on Google's Online Security blog, obtained in advance by The Cable. "Today, we're taking that a step further for a subset of our users, who we believe may be the target of state-sponsored attacks."

When Google's internal systems monitoring suspicious internet activity, such as suspicious log-in attempts, conclude that such activities include the involvement of states or state-backed initiatives, the user will now receive the specialized, more prominent warning pictured above. The warning doesn't necessarily mean that a user's account has been hijacked, but is meant to alert users that Google believes a state sponsored attack has been attempted so they can increase their security vigilance.

Google wants to be clear they are not singling out any one government for criticism and that the effort is about giving users transparency about what is going on with their accounts, not about highlighting the malicious actions of foreign states.

Read the rest here

Google Launches the Google Drive

The information age will bring about a deluge of innovative consumer friendly applications in the thrust to competitively serve the consumers.

Yesterday, technology giant Google launched the Google Drive which aims to integrate much of Google’s applications and MORE.

From the Google Official Blog, (hat tip Kurzweilai.net)

Today, we’re introducing Google Drive—a place where you can create, share, collaborate, and keep all of your stuff. Whether you’re working with a friend on a joint research project, planning a wedding with your fiancé or tracking a budget with roommates, you can do it in Drive. You can upload and access all of your files, including videos, photos, Google Docs, PDFs and beyond.

With Google Drive, you can:

• Create and collaborate. Google Docs is built right into Google Drive, so you can work with others in real time on documents, spreadsheets and presentations. Once you choose to share content with others, you can add and reply to comments on anything (PDF, image, video file, etc.) and receive notifications when other people comment on shared items.
• Store everything safely and access it anywhere (especially while on the go). All your stuff is just... there. You can access your stuff from anywhere—on the web, in your home, at the office, while running errands and from all of your devices. You can install Drive on your Mac or PC and can download the Drive app to your Android phone or tablet. We’re also working hard on a Drive app for your iOS devices. And regardless of platform, blind users can access Drive with a screen reader.
• Search everything. Search by keyword and filter by file type, owner and more. Drive can even recognize text in scanned documents using Optical Character Recognition (OCR) technology. Let’s say you upload a scanned image of an old newspaper clipping. You can search for a word from the text of the actual article. We also use image recognition so that if you drag and drop photos from your Grand Canyon trip into Drive, you can later search for [grand canyon] and photos of its gorges should pop up. This technology is still in its early stages, and we expect it to get better over time.

You can get started with 5GB of storage for free—that’s enough to store the high-res photos of your trip to the Mt. Everest, scanned copies of your grandparents’ love letters or a career’s worth of business proposals, and still have space for the novel you’re working on. You can choose to upgrade to 25GB for $2.49/month, 100GB for $4.99/month or even 1TB for $49.99/month. When you upgrade to a paid account, your Gmail account storage will also expand to 25GB.

Drive is built to work seamlessly with your overall Google experience. You can attach photos from Drive to posts in Google+, and soon you’ll be able to attach stuff from Drive directly to emails in Gmail. Drive is also an open platform, so we’re working with many third-party developers so you can do things like send faxes, edit videos and create website mockups directly from Drive. To install these apps, visit the Chrome Web Store—and look out for even more useful apps in the future.

This is just the beginning for Google Drive; there’s a lot more to come.

Since alot of my work has been based on the Google platform, I applied for the free option and await for their notice of access.

And yes, as a fan of technology, although I hardly know how to use the many conventional sophisticated gadgets, I expect much more consumer friendly services to come not only from Google from the rest of the industry.

The Battle For The World's Most Valuable Technology Company

The following chart from New York Times details on the rivalry of Apple and Microsoft in terms of market cap.

Apple recently grabbed the top spot as the "world’s most valuable technology company"...

Interesting comment by the New York Times:

"The rapidly rising value attached to Apple by investors also heralds an important cultural shift: Consumer tastes have overtaken the needs of business as the leading force shaping technology."

This reminds us that consumers ALWAYS play the lead role in determining how resources are allocated. And businesses only compete to satisfy consumer needs or tastes, through innovation or adaption of more efficient processes. Profits and higher market cap are consequences of the success of such pursuit. According to Ludwig von Mises,

``The economic foundation of this bourgeois system is the market economy in which the consumer is sovereign. The consumer, i.e., everybody, determines by his buying or abstention from buying what should be produced, in what quantity and of what quality. The businessmen are forced by the instrumentality of profit and loss to obey the orders of the consumers, Only those enterprises can flourish that supply in the best possible and cheapest way those commodities and services which the buyers are most anxious to acquire. Those who fail to satisfy the public suffer losses and are finally forced to go out of business."

Go to the New York Times site here to see the company milestones accompanying the chart.

However, maybe the rivalry shouldn't be limited to Apple-Microsoft. Perhaps newcomer Google should be part of it.

Google's market cap is currently at $156 billion according to yahoo finance, (chart from bigcharts.com) more than 30% off from Apple's $233.7 billion.

But again, the rewards will depend on who among these companies will satisfy the consumers most.

Where Yahoo Beats Google

This from Randall Stross (New York Times)

``Google has an outsize image as the deft master of information. Its superior technology seems to pitilessly grind up its rivals. But Google’s domination in search has proved hard for it to match in some information domains. When serving financial news and information, for example, Yahoo draws 17.5 times the traffic of Google, according to comScore Media Metrix.

``Yahoo Finance, which has occupied the top spot in the category for 19 consecutive months, drew 21.7 million unique United States visitors in July; Google Finance drew only 1.2 million unique visitors, placing it 17th in comScore’s rankings for the category, one slot above a site called FreePressRelease.com."

Ahead of the Curve: Web Search Trends

Looking for ways to get ahead of the curve?

Google offers an innovative method to predict market or economic trends: by search “query data”.

From Google

The above shows of a tight correlation between sales of Ford vehicles and the google search trends for Ford.

This from Hal Varian, Chief Economist and Hyunyoung Choi, Decision Support Engineering Analyst of Google (bold highlight mine),

``The answer depends on what you mean by "predict." Google Trends and Google Insights for Search provide a real time report on query volume, while economic data is typically released several days after the close of the month. Given this time lag, it is not implausible that Google queries in a category like "Automotive/Vehicle Shopping" during the first few weeks of March may help predict what actual March automotive sales will be like when the official data is released halfway through April.

``That famous economist Yogi Berra once said "It's tough to make predictions, especially about the future." This inspired our approach: let us lower the bar and just try to predict the present.

``Our work to date is summarized in a paper called Predicting the Present with Google Trends. We find that Google Trends data can help improve forecasts of the current level of activity for a number of different economic time series, including automobile sales, home sales, retail sales, and travel behavior.

``Even predicting the present is useful, since it may help identify "turning points" in economic time series. If people start doing significantly more searches for "Real Estate Agents" in a certain location, it is tempting to think that house sales might increase in that area in the near future.”

In other words, trends from web search data could function as "lead" indicator for possible “turning points” of economic or market activities.

I tried to confirm this theory by comparing the trend of stock market searches with the performance of global stock markets.

And got a pleasant surprise…

Of the last 6 spikes in Google trend’s search for stock market…

largely coincided with stock market bottoms or “inflection points” with stunning near precision (except during the meltdown in October).

Arrows from stockcharts.com reflected on the spikes seen in the Google search trend chart above.

Google trend’s activities somehow appear to mirror the VIX or Fear Index, where such correlation (a peak in searches and a stock market bottom) could have been due to people’s greater appetite for more information possibly out of fear or angst (especially during the latest panic).

Yet I think it won’t be long where markets could spawn out of Google’s trends something in the line of prediction markets or in derivatives.

Finally this reminds us of Jean Baptiste Say’s quote in A Treatise on Political Economy.

``the advantage enjoyed by everyone who, from distinct and accurate observation, can establish the existence of these general facts, demonstrate their connection and deduce their consequences. They as certainly proceed from the nature of things as the laws of the material world. We do not imagine them; they are results disclosed to us by judicious observation and analysis.....

Looks like a handy tool. Thanks for the tip Google.

Interesting Trivia on Google

Here is an interesting article from my default search engine Google as excerpted from Askmen.com…

“5 Things You Didn't Know: Google

There is no other company more synonymous with the internet than Google. As the mother of all search engines (a legitimate title considering Google surpassed Yahoo! as the most visited website in the U.S. in 2008), Google has come a long way since its early beginnings. It is also ranked as the No. 1 company to work for, according to Fortune magazine. Its popularity has become so widespread that most think Google was born along with the internet. To others, however, Google is the pinnacle of all internet companies -- a multifaceted search engine extraordinaire.

Why such intrigue? Well, here are a just a few things you didn’t know about Google.

1- Google spends $72 million a year on employee meals

Seventy-two million dollars a year -- that works out to about $7,530 per Googler (a term Google uses to identify employees). While the exact details vary depending on location (the Google empire spans the globe), employees at Google's California headquarters, aptly entitled the Googleplex, are welcome to at least two free meals a day from 11 different gourmet cafeterias. As if that weren’t enough, another thing you didn’t know about Google is that in addition to the cafeterias, Google offers numerous snack bars that are chock-full of healthy morsels to munch on.

And that's certainly not all. Is your car in a bit of a rut? Not to worry; Google offers on-site car washes and oil changes. The list of perks for working at Google is never-ending, making it no surprise that it's considered the No. 1 place to work, offering: on-site haircuts, full athletic facilities, massage therapists, language classes, drop-off dry cleaning, day cares, and on-site doctors, just to name a few. Oh, and if your dog is stuck at home and feeling a little lonely, just bring him to work -- Google doesn't mind.

2- Google was originally called BackRub

Like many other booming internet companies, Google has an interesting upbringing, one that is marked by a lowly beginning. Google began as a research project in January 1996 by cofounder Larry Page, a 24-year-old Ph.D. student at Standford University. Page was soon joined by 23-year-old Sergey Brin, another Ph.D. student, forming a duo that seemed destined for failure. According to Google's own corporate information, Brin and Page argued about every single topic they discussed. This incessant arguing, however, may have been what spurred the duo to rethink web-searching and develop a novel strategy that ranked websites according to the number of backlinks (i.e., according to the number of web pages that linked back to a web page being searched), and not based on the number of times a specific search term appeared on a given web page, as was the norm.

Because of this unique strategy, another thing you didn't know about Google is that Page and Brin nicknamed the search engine BackRub. Thankfully, in 1998, Brin and Page dropped the sexually suggestive nickname, and came up with “Google,” a term originating from a common misspelling of the word "googol," which refers to 10¹⁰⁰.

The word “google” has become so common, it was entered into numerous dictionaries in 2006, referring to the act of using the Google search engine to retrieve information via the internet.

3- Google loses $110 million a year through "I'm Feeling Lucky"

There's not much to see on Google's main search page, and perhaps simplicity is one of the keys to Google's success. When searching Google, you are given two options: “Google Search” or “I'm Feeling Lucky.” By clicking the former, you are given that familiar list of search results; by clicking the latter, however, you are automatically redirected to the first search result, bypassing the search engine’s results page.

Besides the fun factor, the idea behind the “I'm Feeling Lucky” feature is to provide the user with instant connection to the precise page they are searching for, thus saving them time that would normally be spent perusing endless search results. Sounds harmless enough, right? Not so fast. Because “I'm Feeling Lucky” bypasses all advertising, it is estimated that Google loses about $110 million per year in advertising-generated revenue. So why in the world would any Fortune 500 company not patch such a gaping leak? "It's possible to become too dry, too corporate, too much about making money. I think what's delightful about 'I'm Feeling Lucky' is that it reminds you there are real people here," Google Executive Marissa Mayer told Valleywag, an online tech-blog.

4- Google has a sense of humor

Google also offers full language support for Pig Latin, Klingon and even Elmer Fudd. Anyone else still feeling lucky? Try typing, “French military victories” and clicking “I'm Feeling Lucky.” Behold the result.

Some might remember the “miserable failure” fiasco when one typed those words and clicked “I'm Feeling Lucky,” and they were instantly connected to a biography of President George W. Bush on the White House website. Now, before you jump to conclusions, this trick -- which no longer works -- was carried out by members of the online community through the art of “Google bombing.” Google bombing works because of Google's backlink search strategy.”

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