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Disrupted Economy and Disruptive Technology

We have seen residential housing lose what little steam it had built up. Jobs numbers, due Friday, are likely to show moderation in the pace of new job creation. The debt ceiling continues to loom. Gas and food prices are straining corporate earnings and household budgets. Social media marches forward despite a rising chorus of bubble suspicion. The precariousness of jobs and budgets pushes Americans to seek deals on-line, socialize on line and use fewer resources. Sony and Nintendo are struggling and Zynga's on-line social games are generating real revenues. Twitter and Facebook are helping change patterns of public information and engagement. In this disrupted period social networks seem to be well aligned to emerging constraints and realities.

We have seen residential housing lose what little steam it had built up. Jobs numbers, due Friday, are likely to show moderation in the pace of new job creation. The debt ceiling continues to loom. Gas and food prices are straining corporate earnings and household budgets. Social media marches forward despite a rising chorus of bubble suspicion. The precariousness of jobs and budgets pushes Americans to seek deals on-line, socialize on line and use fewer resources. Sony and Nintendo are struggling and Zynga's on-line social games are generating real revenues. Twitter and Facebook are helping change patterns of public information and engagement. In this disrupted period social networks seem to be well aligned to emerging constraints and realities.

Across this short week we will get a flood of macroeconomic data and news. We will see productivity, Case Shiller Housing numbers, Chicago PMI, ISM reports, Consumer Confidence, payrolls and unemployment. It will be a whirlwind few days. It appears likely that the balance of this week's numbers will signal a slowing of growth. The continued impact of the Tsunami, an underwhelming developed world recovery, Euro Zone issues, US Budge issues, housing market trouble and rising commodity prices will be visible in many of the numbers to come. It is fair to say we are living in a disrupted economic environment.

From Tunisia and Egypt to your home town, new technologies are emerging with impact. Facebook and Twitter relay news- and waves of meaningless chatter- to millions in real time. Revenues in the social media space are driven by advertising and deal seeking. Thus, social media is neither magical, nor immune to economic dislocation. However, we continue to see flocks heading into virtual space to save time and money. We are using GroupOn, Living Social and other group discount services, to afford meals, services, indulgences. We are on E-Harmony finding matches without long drives and costly restaurant meals and drinks. Resumes are posted and scanned in LinkedIn as we look for work.

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Facebook, YouTube and Twitter offer free communication and entertainment as cable and cell phone bills weigh heavily on taxed budgets. Social media offers an inexpensive way to travel the world first class and save on purchase of increasingly expensive transportation and hard resources. No matter one's limited budget, we can deal shop, connect and foster image, in the social network, at little cost. Disruptive technologies are fighting for market shares and revenues in a rough economic context. So far, they are fighting very successfully. As we have seen before, disruptive technologies can sometimes thrive in disrupted economies.

Netflix, Hulu and YouTube offer TV and movies for low or no cost. This saves on cable bills, on demand rentals and trips out and about in an expensive world of hard assets. Smart phones and tablet PC's offer to replace home internet, TV, landline phones and traditional cellular voice minutes and text messages. Wi-Fi and 3G/4G service with cloud computing portend fewer and cheaper devices and services delivering more through social media. Clearly Microsoft glimpsed this in the Skype purchase. The angst of the developed world middle class and the tentative rise of the developing world middle class are disruptive to established businesses. New technologies are well suited to collect both groups as heavy users.

As we wait for Friday's job numbers. We see disruptive technologies outperforming in the present disrupted economy.

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