Meat and Tech

I noted another counterintuitive news story today, or more accurately, three of them. Two of these stories were about meat recalls, and the other was about investment in technology sector stocks. Now, I realize that these may not actually have anything to do with each other, but I found the juxtaposition of the stories to be an interesting comment on our current business climate.

First, the meat recall stories. These are scary to anyone who eats meat, and particularly to anyone who eats hamburger patties commercially available in the US. The first of these is about the Tops, Inc. recall, which has now bankrupted the company and resulted in the shutdown of their only meat packing plant. You can read the Associated Press story about it if you like. The recall affected mostly the sort of ready-made hamburger patties you buy in bulk frozen, and has now grown to include more than 21.7 million pounds of meat. The bankruptcy and shutdown will cost 87 people their jobs, and the contaminated product involved has already made 32 people sick; meanwhile, the FDA is still not sure what caused the problem in the first place.

The other meat recall was from the Sam’s Club warehouse store chain, and involves ground beef patties made for them by Cargill, Inc. So far, this outbreak has only made 4 people ill, and the situation is unlikely to get any worse, because Sam’s Club has pulled all of the affected product off the shelves and recalled any that was purchased. You can read the story, also from the AP if you want. It doesn’t really compare to the Tops recall, which is the second largest beef recall in US history, but coming as it does during the same time period, it has made a lot of people who either eat ground beef patties or invest in companies that made and/or sell them a bit nervous.

By contrast, the story about people who invest in technology stocks was remarkably upbeat. That story deals with current trends in mutual funds and other large investors, but it talks about how the technological innovations made by Google, Apple, Cisco, and other high-tech companies have created a lot of investor confidence. Despite ongoing problems in the stock market and worries about negative economic indicators, particularly lack of investor confidence generated by the ongoing mortgage lending crisis, technology investors are confident that these companies will continue to invent and innovate their way out of trouble, not matter what happens to the nation’s economy in general.

Given that meat-packing companies have been around for a century or more, and that people will always need to eat, you would think that investing in companies that package meat would be fairly safe, wouldn’t you? Especially in a time when so many people are living on high-protein, low-carbohydrate diets in which large amounts of lean red meat are more popular than ever. By the same token, technology companies have always been risky investments, both because there is no way to predict where the next ingenious invention will come from, and also because there is no way to predict which ingenious invention will become the next hot-selling product and which one will bankrupt the company that insists on taking it to market. We are living in the age of both the Atkins Diet and the dot-com crash, and you would think these things would affect investor confidence. Yet, they don’t seem to be.

It just goes to show that things are not always as simple as they might appear…