Value Investing using Economic Value Added (EVA)

Word Of Sears Holding's Demise Proves To Be Extremely Premature

Sears Holdings Corporation, the publicly traded (NASDAQ: SHLD) parent of Kmart and Sears, Roebuck   and Co., is the nation's fourth largest broad-line retailer with over $50 billion in annual revenues and approximately 3,800 full-line and specialty retail stores in the United States and Canada.

And it seems everyone knows that it is just a matter of time before SHLD folds up and hands famed value investor Eddie Lampert a humiliating defeat.  We've been waiting ever since for the company to liquidate.

Not just yet.  Today, SHLD released operating results for its most recent fiscal year.  The results? If you go by the traditional metrics that have only a tangential relationships to the drive for shareowner value, like same store sales, hot merchandise and increasing traffic, oh yeah, and really hip modern day "shopper experience", Sears failed again!

But what about profits and cash flow and the balance sheet in this once in a lifetime consumer recession and housing bust.  Remember Sears is the largest seller of home appliances in the nation.  No home sales.  No new refrigerators.  No new washing machines.  And it's be going on for three years. 

The critics have consistently called for Lampert to spend more money because JC Penney and WalMart and others were updating their stores, expensive remodeling and expanding right into the teeth of the worst consumer recession in a generation.  Fortune summed up the critics' arguments in an article in December 2007 this way:

Take the $1 billion in capital investment that Lampert refers to in his letter. Sure, this sounds like a lot of money, but it pales in comparison to what other retailers spend on store upkeep and expansion. Over the past 12 months, Sears spent 1.2 percent of its overall sales on capital expenditures. That compares with 7.1 percent for Target(Charts, Fortune 500), 4.4 percent for Wal-Mart(Charts, Fortune 500), and 2.2 percent for Costco(Charts, Fortune 500), according to Credit Intel, a credit research firm.

Analysts expect Sears to spend no more than $700 million on capital expenditures this year, a slight increase from the $513 million spent in 2006 -- paltry sums for a retailer with $30 billion in annual sales.

Plus, it's taken Sears nearly two years to get to that $1 billion mark. Consider that over the same period, Lampert has spent $3 billion buying back Sears' stock.

On the question of inventory, Lampert blamed Sears' bloated merchandise levels on a slowing economy that has caused consumers to delay purchases of items like appliances, tools and lawn and garden equipment, which account for a large chunk of Sears' sales.

Mr. Lampert's answer to his critics:  "Spending lots of money doesn't always lead to the results people expect."  And that in a nutshell is the EVA Company's mantra - growth is good for the analysts, for some employees, for some customers and good for the short-term stock price - but willy nilly spending does not necessarily lead to the creation of value.

The stock price has certainly suffered, but the question should always be whether the per share intrinsic value is less than or greater than the current stock price.  And then we must ask whether the company has the social technology, the DNA, to understand what to do in the face of the pressure to expand at any cost.  We think Sears with Lampert at the helm has that internal social technology.

The stock price of Sears Holdings (SHLD) rose about 780% from May 2003 through the end of April 2007, where the stock peaked at $195.  JC Penney went up 210%; Home Depot went up only 11%; Kohl's went up nearly 70%; Target up 56%; while WalMart actually declined -8% during that time.  (It was this under-performance by WalMart's stock that led the company to rethink its international and US expansion plans by implementing a capital efficiency plan that aimed to increase returns on capital spent and increase free cash flow.)  Of course, that summer was the beginning of the financial crisis and was the beginning of the end of the consumer led boom.

The retailers stocks have suffered since.  Sears and JC Penney have dropped -80% since then; Home Depot fell -47%; Kohl's and Target both fell more than -50%.  WalMart is flat since then, and if it wasn't for the under-performance of the market in the last month or so, WalMart would have increased since it initiated its EVA-like Capital Efficiency program.

Which brings us to Eddie Lampert's interesting, must read annual letter released this morning.

This following excerpt explains how and why a $50 billion retailer that most critics suggest is a "dead company walking" pays down debt, buys back stock and remains cash flow positive during the death of the American consumer.

This past year was a very difficult year for the world economies and for retail in the United States, and 2009 needs to be the year of restoring confidence and trust in our financial system. We have witnessed the weeding out process that inevitably accompanies difficult economic times, with retail companies like Circuit City, Mervyn’s, Linens ’n Things, and Fortunoff not just filing for bankruptcy, but undertaking complete liquidation. Other retail companies, many of whom are highly regarded, have seen their plans and expectations thwarted by events ranging from consumer distress and the tightening of credit markets to rating agency concerns, all of which have upset normal expectations about how a retail business should be run.

As discussed at the 2008 Annual Shareholder Meeting, there has been significant expansion over the past five years in big box retail square footage and significant capital expenditures by our competitors, primarily for opening new stores, but also to refresh and expand their existing store base and infrastructure. At Sears Holdings, our investment principle is guided by the belief that capital invested in any area of our business deserves a reasonable return on that investment. If that return is not forthcoming, significant investments in the business will destroy value rather than create value for shareholders.

Over the past several months, many of our competitors have announced dramatic reductions in their capital expenditure budgets for 2009 and beyond. Perhaps they too are recognizing that unbridled expansion and investment rarely yield the types of returns forecasted by analysts and industry experts.(My emphasis) The dramatic increases in capital investment in the retail industry that took place in recent years are being reversed, and investment levels are being reevaluated. I think that ultimately this is a healthy dynamic for the entire industry. Retail is not immune from the economics of overexpansion experienced in other industries. At Sears Holdings, we will continue to evaluate opportunities based upon our expectations for returns and continue to experiment with a variety of options where the returns could justify higher levels of investment.

We couldn't agree with you more Mr. Lampert.  You were once named by some rag as the "worst" CEO in America.  On the contrary, we suspect you are one of the best Value-Aligned CEOs in the world. Thanks.

Disclosure: Berk Advisory and/or its clients own or have owned SHLD in the recent past.

Can (These) People Allocate $787 Billion Effectively?

I know it doesn't seem like it touches us, but check out how big the "stimulus/spending bill that Congress just passed and the President signed into law is.

 

How and why do we give these very very ordinary people the power over allocating so much of our resources? Ever really think about how the decision to spend all this money should be made?

I have a feeling the best answer is not the government. Forget about the ideological arguments for a moment - there seems to be no way that humans or simple organizations of humans can spend this money effectively and optimally. How do we know that we will get a high social return on this money? We don't - we hope, but it seems to be a high probability that we will not get our money's worth. 

   

 

This from today's CARPE DIEM from Dr. Mark Perry: 

How Big is $787 Billion? What Would It Buy?

The latest estimates for the stimulus package are about $787 billion, a number so mind-numbing large it's hard to even imagine a number of that size.

Yesterday's "The Gartman Letter" puts it in perspective for us:

$787 billion would buy 4.6 million homes here in the US at the most recent median price of $170,300 for January 2008.

$787 billion would send a check for $2,623 to every man, woman and child in the US.

$787 billion would fund 7.7 million four year scholarships to the average private university in the US at current tuition rates.

$787 billion would fund 30 million full four year scholarships to the nation’s public universities.

$787 billion would buy 27.7 million cars at the average price of an automobile sold last year in the US.

$787 billion would fund four full months of a tax holiday in the US.

Democrats Gunning For The 401(k): Stocks Are Risky Because They Went Down?

This morning Chairman Bernanke is testifying before the Senate Banking Committee chaired by none other than Chris Dodd - the man who thinks it is OK to slip compensation limits into a 1000 page bill in the middle of the night. But that is another post.  (See my colleague Marc Hodak's comments here and here)

Today, right after Senator Dodd's five-minute questioning of the chairman, he asked whether or not they were lucky that Social Security was not privatized.  I assume he meant that our Social Security would have been cut in half just like the 401(k)s that were 100% invested in stocks on average would have been cut in half since the peak.   There is no other issue that demonstrates the ignorance of Congress related to the markets than this one.

Most people with 401(k)s are in their savings accumulation phase of their life cycles.  They are putting away money every week or every month and their employers are sometimes matching that number tax-free.  Too many people including Congress think that having enough money at retirement means having some lump-sum principal amount.  But it doesn't.  Retirement is about Income; Having enough income In retirement to live in dignity and to overcome the most pernicious obstacle - inflation.

On the contrary,If Christopher Dodd had a sensible bone in his body, or an ounce of common sense, instead of deriding the stock market investments In 401(k) plans at this moment in time he should embrace them. 

After all, Warren Buffett has told us that this is the second great buying opportunity for his personal account in his lifetime.  But Senator Dodd and others (see below) want to deny retirees of the incredibly low prices of the great American companies today.  The risky thing is for retirees and for savers to be out of the stock market now.  Not to be out of the stock market, especially at a time when we are near generational lows.

No wonder in the short term the stock marketBelieves that America will never recover.We've got congressional leadersThey're telling American retireesBut the stock market is too riskyFor them to invest inAt exactlyThe right timeTo invest in the stock market. Don't listen!  Look at the story the Bloomberg story below - the Democrats seem to be gunning for your 401(k).  What's going to replace them? Social Security accounts in which Americans will get fixed payments that will not compemsate for the ever present rise in the cost of living? Hold on to your wallets and your savings folks.  Here come government run savings acounts, see below.

Feb. 24 (Bloomberg) -- House Education and Labor Committee Chairman George Millersaid 401(k) retirement plans do not provide sufficient retirement security for many Americans and must be revamped.

Miller, a California Democrat, recommended better disclosure of 401(k) fees and more objective marketing of retirement products to investors at a Washington hearing today on the effectiveness of existing retirement savings plans.

Investors had $2.7 trillion in 401(k) accounts as of Sept. 30, according to the Washington-based Investment Company Institute, which represents mutual funds. The Congressional Budget Office estimated that workers lost $2 trillion over a span of 15 months from declining stock markets at an October hearing of the House Education and Labor Committee.

“For too many Americans, 401(k) plans have become little more than a high-stakes crap shoot,” said Miller. “We are realizing that Wall Street’s guarantees of predictable benefits and peace of mind throughout retirement was nothing more than a hallow promise.”

Miller questioned at the October hearing whether the U.S. had gotten its money’s worth from the estimated $80 billion in tax subsidies the retirement accounts receive each year. At the hearing, Teresa Ghilarducci, a professor at the New School for Social Research in New York, proposed replacing 401(k) plans with government-run retirement savings accounts. (My emphasis - here is the plan now hawked by the Democrats they want to limit your prosperity in retirement too by managing your 401(K) and giving you a 3% fixed payment return)

‘Preserve and Strengthen’

Today, Miller said “we must preserve and strengthen 401(k)s.” About 55 million private-sector employees have defined-contribution retirement plans, in which workers are responsible for managing their own funds, according to the Center for Retirement Research in Boston. The 401(k) plans, which generally are tax-deferred savings accounts, are one of the most common retirement plans.

John Bogle, founder of fund manager Vanguard Group, echoed Miller, saying, “the 401(k) plan is an idea whose time is come” yet “our existing defined contribution system is failing investors” because of high fees, low levels of saving, excess flexibility that permits cashing out and too much borrowing and inappropriate asset allocation. Bogle recommended a single defined contribution structure using low-cost annuities, among other options. (Bogle is right the current system rips off investors, we at Berk Advisory have a solution - low cost, separately managed accounts without layers and layers of fees and commissions.- DB)

Retirement savings are too exposed to market risk, according to Dean Baker, co-director of the Center for Economic and Policy Researchin Washington and another witness at today’s hearing. Baker proposed a government-run pension system providing a modest guaranteed rate of return, according to a statement released last night.

Employees must work longer to extend retirement savings and social security could be stabilized and supplemented by target- date funds, said Alicia Munell, director of the Center for Retirement Research at Boston College, in prepared remarks. Target-date funds shift moneyinto more conservative investments as an investor approaches retirement.

Upper Middle Income Americans' Support for Prez Rapidly Declining

It was predictable.  The same independents who got caught up in the class warfare message of the Democrats.  Who felt guilty about their millionaire next door status.  Who were looking forward to a very nice retirement in dignity. These are same people who are dropping away like flies from support of the new president after just 30 days or so on the job.

At Berk Advisory we manage our friends, neighbors and family's wealth in the stock market.  As many of you know, I do not like government much, especially the kind that intrudes from on top of Capitol Hill.  I am an unabashed capitalist, who does not believe that free markets by themselves solve everything or even many things for that matter.  And that is because I believe that the progress of humans over the last 200 years or so has underperformed the evolutionary processes embedded in our brains.  Human beings are not perfectly rational as classical economists and too many small thinking Republicans believe.

Humans, when dealing with economic decisions, have a long legacy of ingrained biases that have been chronicled over and over again by modern decision theorists, economists and psychologists alike.  No need to go into this now, but suffice it say that I am never certain about anything when it comes to the economy or the stock market. 

The system is way too complex for one man or a small group of men and woman to predictably plan.  That's why Socialism does not work.  And that's why President Obama's dream of "trickle up" economics will not work.  Income (and even more so wealth) inequality is a necessary condition of  a healthy capitalistic system.  Growth is the engine the helps humans self organize and create really terrific things.  People on the bottom need to believe that they can make it to the top through many and increasing virtuous paths. 

The moment the wealth distribution shrinks and too many citizens are clustered around the middle, incentives to grow are diminished.  None other than a Chinese Communist leader Deng unleashed capitalism on the Chinese by saying "It is glorious to get rich".  So far our President has explained just the opposite: It's glorious to be "middle-class".  And in unprecedented speed their revolutionary change message has hastened the collapse of the upper middle class like no other policy we have seen.

Just today, Nancy Pelosi is going to push cram down legislation through Congress.  What's that?  Oh nothing except letting individual bankruptcy judges create his or her own policy concerning the breaking of mortgage contracts by imposing their will on the mortgage holder!  And in the process, put undo pressure on existing asset backed securities like car loans and credit card loans.

Until the President reigns this in - no-one will want to transact in the stock market or the economy.  Will the real leaders step up please.  Those that you convinced to hate Bush - the ones that would have voted for McCain - well they are getting fed up fast.  Do you think that when they are out of work they can organize too?

This comes from the Gallup organization today:

The only other substantial change seen in approval of Obama among demographic subgroups is an 11-point drop among upper-middle-income Americans (those making from $5,000 to $7,499 per month), from 69% approval in Obama's first week as president to 58% in his fourth. This could reflect variations by household income in Americans' reactions to the economic stimulus bill (Gallup's Feb. 10 survey on the stimulus bill found the least support for it by income among this group). Nevertheless, overall, support for Obama remains quite high among all income groups.

$20 trillion of lost wealth in the housing market and stock market is enough to get anybody spooked.  But the young and inexperienced double talker from Chicagoland promised hope and change.  He promised that he would put away "the childish things" like partisan bickering and he would of course be pragmatic and listen and take the best ideas.

Bullshit! There has been not one PRO GROWTH policy initiated by this President and he persists on his path of redistribution regardless of the economic crisis he likes to remind us he inherited. He talked about tax cuts for small businesses and cutting the corporate tax rate - not in that bill beause Queen Nancy wasn't on board.

There's a reason that Gold is at $1000 per ounce.  There's a reason investors are fleeing into governement treasuries.  There is a reason that the stock market tanks after another policy is revealed (concealed) or changed.  We do not know what these revolutionaries are going to do from day to day.

Who's in charge if Senator Dodd can "slip" a paycap on the major finanical institutions that guarantees the best and the brightest will not be around to help fix this mess! 

The stock market is down some -30% and bank stocks down -65% since President Obama was elected.  We got a rally when his picks to his cabinet became known, but then inauguration ruined that as uncertainty and obfuscation became the change we got. 

Oh yeh - a tax cut is not a tax cut unless the entity pays taxes - everything else is just a stimulus check.

A Letter From 6 Million Bosses Regarding the Spending Bill

I do not know exactly who I should attribute this too, but my brother just sent this to me via email which was forwarded from one of his business colleagues who did not write the letter but felt he could have.  My brother owns a bunch of fondue restaurants in the Washington D.C. area called The Melting Pot.  He is also partners with a few other owners in Long Island and Philadelphia.  We are extremely proud of him and my sister in law, who does at least half of all the work and worrying.

He has been at this for more than 15 years and only recently has he been able to enjoy the fruits of his equity capital. 

He is really mad about this anti small business bill about to be signed by the President.  He and his partners share the feelings of the guy or gal who wrote the following.

Dear Employee,

There have been some rumblings around the office about the future of this company, and more specifically, your job. As you know, the economy has changed for the worse and presents many challenges.

The economy doesn't pose a threat to your job. What does threaten your job however, is the changing political landscape in this country.

However, let me tell you some little tidbits of fact which might help you decide what is in your best interests. First, while it is easy to spew rhetoric that casts employers gainst employees, you have to understand that for every businessowner there is a back story. This back story is often neglected and
overshadowed by what you see and hear. Sure, you see me park my Mercedes outside. You've seen my big home at last year's Christmas party. I'm sure; all these flashy ico ns of luxury conjure up some idealized thoughts about my life.

However, what you don't see is the back story. I started this company 28 years ago. At that time, I lived in a 300 square foot studio apartment for 3 years. My entire living apartment was converted into an office so I could put forth 100% effort into building a company, which by the way, would eventually employ you.  My diet consisted of Ramen Pride noodles because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn't have time to date. 20 Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business -- hard work, discipline, and sacrifice.

Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived i n expensive homes and wore fancy designer clothes. Instead of hitting the Nordstrom's for the latest hot fashion item, I was trolling through the Goodwill store extracting any clothing item that didn't look like it was birthed in the 70's.

My friends refinanced their mortgages and lived a life of luxury. I, however, did not. I put my time, my money, and my life into a business with a vision that eventually, some day, I too, will be able to afford these luxurie s my friends supposedly had. 

So, while you physically arrive at the office at 9am, mentally check in at about noon, and then leave at 5pm, I don't. There is no "off" button for me. When you leave the office, you are done and you have a weekend all to yourself. I unfortunately do not have the freedom.

I eat, and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a 1 year old special-needs child. You, of course, only see the fruits of that garden -- the nice house, the Mercedes, the vacations... You never realize the back story and the sacrifices I've made.

Now, the economy is falling apart and I, the guy that made all the right decisions and saved his money, have to bail-out all the people who didn't. The people that overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for.

Yes, business ownership has its benefits but the price I've paid is steep and not without wounds.

Unfortunately, the cost of running this business, and employing you, is starting to eclipse the threshold of marginal benefit and let me tell you why:

I am being taxed to death and the government thinks I don't pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payrol l taxes. Workers compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man to manage all these taxes and then guess what? I have to pay taxes for employing him.  Government mandates an d regulations and all the accounting that goes with it, now occupy most of my time. On Oct 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes. You know what my "stimulus" check was? Zero. Nada. Zilch.

The question I have is this: Who is stimulating the economy? Me, the guy who has provided 14 people good paying jobs and serves over 2,200,000 people per year with a flourishing business? Or, the single mother sitting at home pregnant with her fourth child waiting for her next welfare check? Obviously, government feels the latter is the economic stimulus of this country.

The fact is, if I deducted (Read: Stole) 50% of your paycheck you'd quit and you wouldn't work here. I mea n, why should you? That's nuts. Who wants to get rewarded only 50% of their hard wo rk? Well, I agree which is why your job is in jeopardy.

 Here is what many of you don't understand ... to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn't need to pay taxes, guess what? Instead of depositing that $288,000 into the  Washington black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.

When you have a comatose man on the verge of death, you don't defibrillate and shock his thumb thinking that will bring him back to life, do you? Or, do you defibrillate his heart? Business is at the heart of America and always has been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers in Washington believe the poor of  Americaare the essential drivers of the American economic engine. Nothing could be further from the truth and this is the type of change you can keep.

So where am I going with all this?   It's quite simple. If any new taxes are levied on me, or my company, my reaction will be swift and simple. I fire you. I fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV, and your child's future. Frankly, it isn't my problem any more.

Then, I will close this company down, move to another country, and retire. You see, I'm done. I'm done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed, and with it, will be my citizenship.

If you lose your job, it won't be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steam rolled the constitution, and will have changed its landscape forever. If that happens, you can find me sitting on a beach, retired, and with no employees to worry about ....

Signed,

Your Boss

I won't move to another country or renounce my citizenship, and I will not give up my career or my business without a fight - but everything else in the letter rings true.  Now multiply the effects described above by 25 million small businesses or at least by the 6 million with employees - there are only 17,000 large businesses in the US according to the SBA.

That's why no Republicans voted for the spending/welfare expansion bill in Congress today.  Our President is sadly mistaken.  Economies are not built from the ground up nor are they driven from the top down.

Businesses are created from the ground up, then they drive economies - the government should do nothing more than facilitate that opportunity, not try to produce "desired" outcomes.

BERK

 

Obama Lied, Western Capitalism Died!

When President Obama was campaigning, he insisted he had a plan to strengthen the financial system and help homeowners facing foreclosure. He won the election because he lied. 

"Obama lied, western capitalism died!" Somehow I don't think that will be the Young Republicans banner cry.    

If he didn't lie then what the heck is he waiting for?  November, December, January and now half of February and no plan. 

It’s clear he had no plan at all.  Rather, three weeks in office, his Treasury Secretary lays out a “plan” that says “we are still planning on planning.”  500 points on the Dow later and another week where the same loans that were paying last week are paying this week, but will have to be marked down again because of ridiculous accounting rules.  The more assets are marked down the more capital the regulators say the banks will need and with all the process without progress out of the new administration the less willing private capital will be willing to come in.

But this too shall end and when it does we will own a diversified portfolio of great American EVA companies at prices we will not see again in our lifetimes.

 

I don't know when it will be OK, but I know it will be OK.  The chart above shows it has since at least 1884 - a lot of stuff some worse than this happened between now and then.

BERK

From Liberation to Obligation: Girl Power on the Rise in Recession

We have noted here before that this economic downturn is hitting men much worse than women in terms of job losses.  And while it seems easy to explain why (see link below), we are now just beginning to discuss the effects on American society, where women control reproduction and more and more of the production. 

I have wondered if women need men at all in a secular society after birth control was developed, especially the pill.  Evolutionary psychology would lead us to the conclusion that women choose men based on trust that he'll stick around and that he will provide food, security and shelter.  (One of the reasons cited for a women's need for bonding before and after sex, while men just let it rip) 

With a lot of unemployed men - which part of those evolutionary obligations are necessary?   We have discussed before that smaller households lead to statistics that show policy makers that household incomes are falling - so they cry that something must be done about that.  But as we point out here people earn money not households.  Therefore, median incomes per earner have not been stagnant, they have been rising either in line or faster than GDP growth.  The middle class is not disappearing - it's becoming girl dominated!

Lionel Tiger an anthropology teacher at Rutgers weighs in this morning with an Op-Edin the Wall Street Journal.  

And Dr Mark Perry at the Carpe Diem blog shows more evidence as to why women remain employed while the men are getting laid off - it's the education stupid!

Follow this link to his blog Girl Power: Employment and Higher Education

          From Liberation to Obligation

The economic downturn will place a heavier burden on women.

In a serious economic recession, the environment is often suffused with danger. Unlike in a war, however, when you peer across the ridge or down the road, there is no clear-cut enemy.

But there are clear casualties in downturns, including the current one -- including that male employment is more vulnerable than female employment. According to the Bureau of Labor Statistics, an extraordinary 82% of current job losers are men. Because for various reasons these jobs were more lucrative than women's jobs to start with, the end point is not only sharp changes in income but new requirements for how families can live.

The impact of these uneven job losses will be felt along lines which have been apparent for quite some time to some of us concerned with basic biology. Ever since females gained control of reproduction, mainly with The Pill, there has been a cascade of subtle but extensive shifts in sociosexual experience. Now, in both a real and symbolic sense, women are acquiring control of production too.

But they are also being more controlled by it. Like men in the past, they no longer have a sassy choice between job or family. Bread before self-expression and "fulfilling potential."

First find a job. Maybe then, find yourself.

More and more women are having children without husbands. Within the family system, men are more likely to become outlaws than in-laws. They leave the family system, or don't join it in the first place. This is decisively more likely when they have no work.

Who wants an out-of-work man? They are unlikely to be considered plausible candidates as mates by sensible women -- which is virtually all women in this context -- who understand the essential economic envelope of romance.

That traditional diamond ring is after all a wholly useless but flagrantly symbolic promise by prehubby of care and resources to come. The rule of thumb and the third finger left hand is that the ring is supposed to cost at least two months of after-tax income. What if there's no such income now or in the foreseeable future?

But breakfast has to be made, children lulled to sleep, granny taken to her dentist. What is happening in the cold turbulence of the economy is affecting and will affect more deeply the warm intimate parts of life. In short, there will be more pressure than ever on women.

Overall, women will never neglect their families. If women have to, they will tie themselves into knots to do what's necessary. They will have to find ways to earn money while their men -- if they have them -- sally forth to job lines and soon breadlines.

Irritated slogans about equal opportunity will fade, replaced by dour acceptance of equal obligation. Or if the current data are predictive for women, unequal obligation.

Mr. Tiger teaches anthropology at Rutgers and is the author of "The Decline of Males" (St. Martin's, 2000).

BERK