U.S. Economy Grew at a 2% Rate in the Third Quarter

From The New York Time         By MICHAEL POWELL

Published: October 29, 2010

      The United States economy grew at an annual rate of 2 percent in the third quarter, the Commerce Department reported Friday, as it struggles to gain any momentum for a sustained recovery.     

     That estimate matched the consensus forecasts for the gross domestic product, and is a slight uptick from the second quarter.
     An economy growing at a sluggish, 2 percent, nearly all economists agree, cannot produce nearly the demand needed to bring down the nation’s painfully high 9.6 percent unemployment rate. And the trade gap remains wide, as imports outpaced exports.    
     These numbers are unlikely to provide much of a morale boost for President Obama and Democrats, who are just days away from crucial midterm elections. High unemployment and soaring foreclosure numbers in the Midwest and Western states already made this a particularly tough election season for Democrats. Friday’s numbers will probably produce little relief.
     “It’s the expected G.D.P. number, which is mostly bad news for the economy,” said Josh Bivens, an economist with the liberal leaning Economic Policy Institute. “The growth rate is just nowhere near enough to put downward pressure on unemployment.”
     Demand, seen as crucial to re-igniting the American economy, appeared flaccid in the third quarter, although there were, here and there, hints of increased consumer spending. Income growth adjusted for inflation and taxes slowed noticeably, rising 0.5 percent in the July-September period after increasing 4.4 percent in the second quarter. And at the other end, prices excluding food and energy increased 0.6 percent, compared with 0.8 percent in the second quarter.
     In recent weeks, the economy has presented two faces, which is reflected in the latest G.D.P. numbers. There have been fledgling signs of growth: home sales and chain store sales are up bit, a swelling stock market has raised consumer confidence a few notches, and jobless claims fell noticeably last week, albeit to a still high and painful level.
     At the same time, the steroidal effect of the stimulus spending is fading. City and state governments have shed tens of thousands of employees, and states face a sea of red ink as they look at next year’s budgets.
“Two percent growth is not great but it beats zero,” said Steve Blitz, chief economist with ITG investment research. “The consumer is still underemployed and over indebted, so the normal push won’t be there. But you’re at least seeing enough spending and growth by the consumer to keep the economy going at 2 percent or more.”
    Friday’s number is a Commerce Department estimate based on a reading of many sectors of the economy, and that the final number may be revised substantially higher or lower. In the second quarter, the surprise was to the downside: the initial G.D.P. report had placed the growth rate at 2.4 percent, and it subsequently wheeled down to an annual rate of 1.7 percent.
    The midterm elections on Tuesday further complicate the picture. As certainty edges aside uncertainty after votes are counted, American business might start spending a bit more, and banks might start lending. But few are willing to turn that wish into a forecast.
    Consumer spending, which accounts for 70 percent of the economic growth in the United States, remains the great unknown. Americans have shed some debt, which is good, but largely in an unsightly fashion, which is not so good. They have defaulted in record numbers on credit card debt and lost their homes to foreclosure. The Federal Reserve Bank of San Francisco issued a notably gloomy forecast recently. “The economic recovery is proceeding at a very slow pace and has lost momentum since the spring,” the bank noted. “No sector of the private economy stands ready to drive a robust recovery.”
    And David Rosenberg, economist for the Canadian investment firm Gluskin Sheff and Associates, does not put a lot of faith in consumers pulling the economy out of its ditch. “Make no mistake,” he said, “the primary trend remains on a downward slope as it pertains to discretionary spending.”
   Personal savings was estimated at 5.5 percent, compared with 5.9 percent in the second quarter.
The European economies have shown signs of stabilizing of late, with Germany as a potential driver of growth (its unemployment recently reached an 18-year low). And this could bode well for America’s export sector. But imports in the third quarter once again grew faster than exports Imports grew at an annual rate of 17.4 percent, compared with an 5 percent for exports.
    Government spending has slowed as the effects of the stimulus spending begin to wear off. That was reflected in the unemployment numbers for September. Companies added just 64,000 jobs last month, but over all, the economy lost 95,000 nonfarm jobs in September, the result of a 159,000 decline in government jobs. Local governments were particularly hard hit.
    “The problematic factor is that consumers remain fundamentally insolvent or worried about becoming so, and too many of the major banks are zombies uninterested in commercial or industrial lending,” said James K. Galbraith, an economics professor at the University of Texas.
    Still, each quarter that the economy does not lapse back into recession adds incrementally to consumer and business confidence, and perhaps eventually to growth. The great immediate test, economists say, is the fourth quarter of 2010. The hope, no more than that at this point, is that small signs of market strength might coalesce into something that looks like actual recovery.
    “As with money, there is a power of compounding the economy,” Mr. Blitz said. “The longer you go with 2 percent growth, you begin to push up against constraints, and the more the fear of unemployment ebbs, the more chance there is that people will begin to feel confident. It’s a very slow burn.”

Yes, You’re Smart, but Can You Make Money?

Published: October 23, 2010      From The New York Times

      This interview with Kenneth Feld, chairman and C.E.O. of Feld Entertainment, was conducted and condensed by Adam Bryant. Feld Entertainment’s operations include Ringling Brothers and Barnum & Bailey circus and Disney on Ice.
Q. How did you get started in your family’s business?
A. In the summers I always worked with my father, and I think my motivation for getting in the business was to work with my dad, because we had an extraordinary relationship. I was fortunate that he was in a business that I loved and had a passion for.
    He acquired Ringling Brothers in November 1967. I was in college, so my summer jobs for the summer of ’68 and the summer of ’69 were going all over the world, primarily Eastern Europe, hiring circus talent.
That was an extraordinary education because, at the time, there were still communist countries, and I spent most of three months in Bulgaria, Hungary, Romania, Poland, East Germany. I would deal with the ministries in those countries because the circus was sort of their art form for the masses. So that was my first exposure to something pretty exotic and unusual.
Q. Can you talk about what you learned from your father?
A. It’s been an interesting road. In 1971 we sold the circus to Mattel. So we operated and worked for Mattel for about 11 years. And then in 1982, my father and I repurchased the circus from Mattel and it became a privately owned business. And it’s been that way ever since. He passed away in ’84, and I was 34 years old and all of a sudden I have this whole company. We had been extremely close. I always say he taught me everything I know and then everyone else taught me everything I didn’t know. What I mean by that is I sort of learned on the job at dinner.
    We’d be traveling four or five days a week, and he would rehash the whole day over a three-hour dinner. And he would smoke two or three cigars and have a Cognac and literally go sentence by sentence about what happened in the day, and what did I think, and here’s why he did what he did. And he would always listen to me, and that was a learning experience.
So when he died, because I had no outside experience, it took me a while to figure out who I was, and that I couldn’t think, “Oh, this is what my father would have done.” I had to take a different path and also create a stronger management team. And I knew what I knew and what my skills were, and I had to bring people in who had skill sets that I didn’t have.
Q. And what were those?
A. My strengths are really in the creative side, coming up with big ideas, knowing how to get them done. But the day-to-day and the administration are something that I wasn’t good at, because I didn’t have the interest. I started restructuring the company around ’94, and I found out that you never stop. And I now have an outside president and chief operating officer who take care of all of the day-to-day, and we have constant communications and meetings. But I don’t get involved in the detail the way I used to.
   As a result of that, I’ve been able to become a lot more objective in looking at the business — what’s happening today, but more importantly, what do I think is going to happen next year and in the next five years.
Q. What else did you learn from your father about leadership and management?
A. I learned, more than anything, to listen. From the time I was a kid he would ask me a question and he would listen to my opinion. I’ve always tried to listen to everyone who works in the company. I think that’s more important than talking.
Q. What else?
A. Another big thing was: make decisions. He said: “You’re a smart guy. You’ll be right 90 percent of the time. But if you don’t make the decision, no one will ever know.”
Q. And now your children work for you.
A. Yes, I have three daughters and they’re all in the business. My role has changed a lot since they’ve come in. It’s shifted from doing to more of a mentor role. So it’s listening. I can offer the experience, but instead of saying, “Why don’t you do this?” I tend to frame advice in the form of questions because it then stimulates thinking, versus, “This is what I want,” because people are going to do what the boss wants. So I’ll throw out three or four alternatives and then let them think about it.
Q. Anything different about the way you work with them, compared with how your father worked with you?
A. Before they joined the company, they had to work elsewhere for two years. I worked for Feld Entertainment my whole career, so the perspective that I had was what I learned inside the company. They’ve all worked different places, so they were able to bring to the company something, a real contribution because they were good at what they did.
    Also, for their own self-confidence, they knew they could go out and make a living and survive and they didn’t need the company. It’s also helped them with the other associates. There’s a different level of respect.
And I made them write papers to tell me: “Why do you want to come into the company? What do you think you can contribute? Where are your strengths and what is your passion — and it can’t be about a paycheck.” And they all had very, very different ideas of what they wanted to do.
   They report to the president and chief operating officer. He negotiates their salary. They will talk to me about creative decisions and we co-produce a lot of the shows together. It’s almost like I’m used as an encyclopedia, which is great because I have 40 years of experience.
Q. Running a circus must be pretty complicated.
A. It is the most complex entity on the planet. Each show may have people from 14 different cultures. We’re their employer but we’re also the landlord. We know the best and worst about everyone because they’re living on our milelong train. I think that understanding people allows you to understand everything, because you can always learn process. The only way you learn about people is to spend time with them and you have to show everyone respect.
    Here’s an example: Every year when we do a new show, we bring down to Florida 130 performers who never, for the most part, knew each other beforehand. About 10 days into our rehearsal period, we have Act Night, where everybody performs their act uncut, untouched by us, for every other performer.
That is the true test of respect. No matter what anyone thought of a person, if they’re doing an act that is so unbelievable and death-defying, the respect level goes way up. You have earned the respect strictly by what you have done — it’s very pure. It is an absolute lesson in earning respect. Respect does not come from a title. It comes from what you do, and how you do it, and how you work with people, and I think that’s a difficult thing for people to understand.
    I may say, “You’re hired in such and such a position and you have this title,” but that means nothing. You can be the smartest person in the world and it means nothing if you don’t earn the respect of the people you have to interact with. I’ve tried to teach that to people — that if you come in and act like you know everything, it doesn’t matter how smart you are, people aren’t going to hear your good ideas.
Q. How do you hire for a position at the corporate office, a direct report?
A. I’ll give you the example of when I hired Mike Shannon, who’s president and chief operating officer. I had been looking for probably 10 months and I walked into the search firm’s office and the guy was sitting there. He was in transition from one position and they said, “Oh, why don’t you talk to this guy?”
So I sat down and talked to him. He said to me, “I don’t know anything about putting on a circus.” I said, “I wouldn’t expect that you would.”
    He said: “I don’t know anything about the entertainment business. I’ve never been in the entertainment business before. What I can tell you is, I love people. I love to mentor people. I love to get the most out of people and I’ll never lie to you. You’ll get the good, the bad, and the ugly.” And about a week later, I hired him and that was it.
   There’s a trust I have with him that is the same kind of trust that I had with my father and that I have with my daughters, and I think that’s the hardest thing to find — people you can absolutely trust. I don’t need people to give me good news. I mean they’re waiting in line to give you good news. I want people who can deliver the unvarnished truth to me so that I can make proper decisions. There’s no good way to deliver bad news, that’s for sure, so you just want somebody that’s straight out — “Here’s what this situation is.”
Q. What about other people where it’s more of a traditional interview?
A. For executives, as opposed to directors and creative people, I’ll read their résumé, and then I’ll say to them: “You’re really smart, but do you know how to make money? Tell me some things about how you made money.” And then they have to really think because the party line doesn’t work. It gets beyond just the typical corporate stuff. That’s really a key thing because you want people to really think like that. It’s hard to find today.
Q. Do some people have trouble answering?
A. Let me tell you, nothing kills an interview like that. So they have to stop and think. “What do you mean?” And I’ll say: “Like when you were a kid growing up, did you have a lemonade stand? What have you done?” And then I try to take them through their career, because I need them to understand that if they’re going to come to work for our company, it’s great that you have all this knowledge, but how can you translate that into something that is absolutely going to make money for us? Can they think unconventionally? Can they think outside the box?
Q. What quality are you testing for with this question of, “Tell me how you’ve made money.”?
A. It’s a drive I’m looking for. I don’t need to hire college professors in my business. We’re grinding it out and I need to know that the people that we have involved in the business are focused on sales, on the bottom line.
    How do you make money? How do you take this crazy idea that somebody has and how can you monetize it? And if you’ve done that before in a couple of situations, then there’s a good chance you’re going to be very successful in our company because we’re demanding. We’re out there day in and day out.
Q. If you could ask somebody only two or three questions to know whether you might hire them, what would they be?
A. It depends, obviously, on the position. But one is: “What is your style of working with people who report to you? How do you work with them? What do you do on a daily basis?” That’s important because you can put the wrong person in a job, and you can take a great department and just decimate it in no time with the wrong person.

10 Big Benefits Of A Busy Business Blog (And How To take Advantage)

By Matt Jackson

About blogs, what can be said that hasn’t been said before? In all truth, very little, but there's still a lack of businesses willing to take up the “challenge” of running their own blog. Those that have done so often report their findings and invariably they have positive reviews of both the blogging process and the results of their business blog. In a bid to hammer the point home we’ve compiled a list of ten advantages of establishing and maintaining a business blog.

It's important to note the word “busy” in the title of this article. It isn’t there simply because it begins with a B and lends itself perfectly to the alliteration in the title. It’s meant to outline the fact that a blog is at its finest when it's regularly filled with quality content. A blog with no content is just a template.

1 - Quick And Easy

Two words that every business owner and manager loves. A blog is simple to set up even for the technologically challenged. There are a number of free blogging services, and while these aren’t ideal for a business blog they offer a way to start. Setting up a blog isn't like setting up a Web site. In the worst case scenario you'll have to install a software application on your Web site and tinker with a few settings.

2 - Inexpensive Setup

The only word more popular than quick and easy is inexpensive. To integrate a blog into the page of your site costs little, especially since someone within your organization can usually do it. Even outsourcing the task will cost only a couple hundred dollars. A blog could become one of the most powerful marketing weapons you have in your arsenal and the money you spend might just pay a salesperson for one day’s work.

3 - Provides Easy Access To Company News

A business blog can be written in one of numerous styles, or a combination of these. One huge benefit is the ability to inform your customers of any changes, new products, latest offers and much more. This, in turn, can lead to direct sales. People love to frequent blogs and pass their time reading the same ones on a regular basis. Captivate your audience with compelling content and you'll receive a growing list of market leads. Remember that individual blog readers generally prefer a personable style but if your operation is a business-to-business one then you'll need to vary your style accordingly.

Typically, companies have used newsletter and e-newsletters to offer this kind of regular contact with their customers and potential customers. Using a blog is easier and it can be updated more regularly than when offering a weekly or monthly newsletter.

4 - Search Engine Friendly

Search engine optimization is a particularly beneficial form of online marketing. It can be used to gain search engine traffic for given keywords or search terms. Your blog offers the opportunity to promote your Web site for hundreds or even thousands of different keywords. Search engines particularly like promoting blogs because they offer a large amount of content that is updated and added to on a regular basis.

5 - Appear Accessible

It doesn’t matter whether you are not, but you and your company will appear to be more accessible especially if you allow freedom for all your visitors to post comments. Accessibility is often a stumbling block for many potential customers that still prefer to deal with companies offline. A blog makes you more approachable and so alleviates this concern.

6 - Appear Authoritative

The appearance of authority is also important to online businesses. Customers will be much more likely to use your service or purchase your goods if they see you as an authority on a particular subject. Give your views on the latest events in your industry, offer reviews of related items and comparisons of several items. Do anything, within reason, that makes you look like an authority on your topic area.

7 - Brand Awareness

The more a customer hears the name of your company the greater the chance of remembering it. It takes, on average, around seven items of direct communication between you and your customers to make a sale. A blog with hundreds of posts gives you the opportunity to mention your company name and ensure that your readers think of you next time they're looking for a particular product or service.

8 - Relationship Building

Another difficult aspect of building a relationship with your customers online is building a rapport with them. A blog enables you to speak more freely and in a more informal and personable style than your Web site does, and your readers will soon feel like they know you. The more they know, like and trust you the more likely they are to visit your main site, click your links and purchase your product.

9 - Gain An Insight Into Your Customers

A business blog enables you to gain insight into your customers. It does this in several ways. Predominantly, by allowing your customers to leave comments on your posts, you get a sense of how they react to what you say. You can also track which posts are being read more often and which generate a greater number of clicks, emails, and much more. As far as market and customer research goes this is important information.

10 - Reduce Calls And Emails

You can use a blog to pre-empt questions that customers might have. By sending readers to your blog you can gain all of the above benefits and you may reduce the amount of niggling questions that you get asked by customers. Of course, you might also receive a lot more orders by email, but nobody wants to reduce those emails.

Maintaining A Successful Business Blog

While there are free blogging services available they generally offer ad-supported blogs with a restricted amount of templates and options. To truly take advantage with a business blog your best bet is to use a commercial application or pay for a commercial service. These enable you to integrate the blog into your own domain incorporating your own design. This ensures that you offer the full benefit to site visitors while making it easier to point blog visitors toward the appropriate pages of your site.

Regular content is imperative to the success of any blog. This content needs to be informative, accurate, and written in a way that will appeal to your visitors. Every blog demands different content and by producing the right content on a regular basis it will pay dividends.

In some posts you should try to find an opportunity to link to at least one page on your main Web site. Try not to get carried away by placing too many links or linking from all your posts but if you mention a particular product, link the name of that product to the corresponding page on your site. Alternatively include a paragraph at the bottom of the page that includes a link to a related resource (on your own page, or an affiliate link). If you're using a blog to make money through affiliate links then you should be careful to only use affiliate links in a relatively small proportion of your posts.

About The Author

Matt Jackson is a blog writer, Web site content copywriter, and a big fan of alliteration in article titles. Through his Web site, WebWiseWords, he offers a full blog writing and posting service for businesses of any size and industry.

Web link: http://www.webreference.com/authoring/bus_blog/

Keeping Our Distance, the Facebook Way

By DAMON DARLIN

Published: October 9, 2010

Web link: http://www.nytimes.com/2010/10/10/technology/10every.html?ref=todayspaper

FACEBOOK is the best distancing tool since the creation of the Christmas card.

Sending holiday greeting cards began in the 1850s in England and spread quickly as a way to stay in touch with far-flung friends and relatives. The cards, whether religious or not in theme, went to people you rarely wrote to and even more rarely spoke to, but for whom you still had a measure of affection — or curiosity. You wanted to know what was going on in their lives, and one exchange a year did the trick.

The cards kept the people in your social network at a distance, while maintaining ties to them. I recall my parents sending and receiving Christmas cards. I did it for a year after I married, but I stopped because it was just too much work.

Facebook, which tries to replicate our real-world relationships online, now helps me maintain those connections. But it does cards one better. It preserves the weak ties in my social network without creating obligations.

A problem I have with holiday cards is that receiving one creates an obligation to send one back. If you don’t, you can expect to be dropped from the friend’s mailing list. You have to send a card next year to re-establish the ties, fully expecting not to get a card in return because of the earlier faux pas. (I do still get four cards each December from non-obligation-seeking friends — and enjoy each one.)

There is no exact way to measure the decline of holiday cards. But the overall drop in the amount of December mail might serve as an approximate indicator. The United States Postal Service reports that the December volume of first-class mail — no catalogs, packages or junk mail — fell 18 percent from a peak in 2002.

Facebook, meanwhile, has grown to 500 million users worldwide and continues to find new users. And Facebook says it finds it hard to think that anyone would want to use their service to keep people away. And yet, last week, it introduced a new service that allows people to divvy up their friends into cliques, a tacit acknowledgment that we hold most of our Facebook friends at a distance.

But it is the lack of obligations that makes Facebook better than other forms of communication. It’s socially efficient and even appears to make staying in touch a whole lot less work. You can read about friends taking their children to soccer games, but your lack of response doesn’t mean that you will stop hearing about their birthday parties, swim lessons, prom nights and graduations.

You can even hide a friend’s messages and they are none the wiser. Facebook also lets people create hierarchies of friends so that information can be shared selectively. No one but you sees the cliques you assign people to. It shouldn’t be too surprising that Facebook has this effect. After all, technology has a grand tradition of distancing people from one another for the sake of efficiency.

The automated gas pump ensures that you no longer interact with a station attendant unless you have a hankering for a slushie and a Slim Jim. The bank A.T.M. has stopped us from exchanging pleasantries with the teller as we collect our $20 bills. And supermarkets are constantly experimenting with self-checkout technology that will remove the line-slowing interaction with a human clerk from the process.

Talking on the phone replaced face-to-face meetings. Now texting is taking the place of many phone conversations. But those calls may not be missed any more than we now miss talking to bank tellers, as they often require small talk and can be awkward to break off. For the recipients, they are an interruption.
(Of course, Apple is advertising face-to-face video phone calls with the same kind of emotion that AT&T used in its old “reach out and touch someone” campaigns. But I suspect that calls are a lost cause.)
Despite its ability to conveniently hold friends at a distance, Facebook can also bestow benefits to those users who make a little effort to keep track of what their friends are saying there. Cameron Marlow, a research scientist who has been described as Facebook’s in-house sociologist, says it relates to social capital: Your friends on Facebook have resources — a guest room or a job, for instance. You may want to know that information, but finding it depends in no small amount on serendipity and your ability to pay attention to their posts. But you also have to be willing to ask for those resources.

Mr. Marlow says that more in-bound communication increases one’s social capital. “The more they have communication with me, the lower the cost of me reaching out to them,” he said.

And a little reciprocity increases the amount of information we receive. The new feature, Facebook groups, allows like-minded friends to more easily share information.

EVEN people who aren’t very sociable on Facebook can benefit from the knowledge they gain about their friends. “You look them up; you see what they do,” Mr. Marlow says. “Six months later you could reach out. There is no social norm against reaching out.”

There was a day, he said, when “birthday or Christmas cards were the only way to reach out and say I care about you,” said Mr. Marlow. But now, whether you hold friends close or not, you gain timely and useful information as it trickles out, and not in a once-a-year data dump.

A version of this article appeared in print on October 10, 2010, on page BU5 of the New York edition.

Options Offer Clues to Earnings and Beyond---THE WALL STREET JOURNAL

Trading Points to a Calm Reporting Season but Curmudgeonly Holidays; Not a Quarter 'To Be Sitting on Your Hands'

By BRENDAN CONWAY OCTOBER 1, 2010

The options market has a few signals for investors as the fourth quarter gets under way. Chief among them: Don't worry too much about corporate earnings, but keep your eye on the holiday season and thereafter.

By watching options prices, investors can glean bits of information about stock-market volatility and individual stocks' outlook. One important signal comes from the so-called fear gauge, the CBOE Market Volatility Index. The measure, also called the VIX, tracks prices investors are willing to pay for Standard & Poor's 500-share index options, commonly used to guard against drops in stocks.

The VIX has been at relatively muted levels in recent weeks, showing that investors are confident as they look to October. How much of this reflects a bullish stock market's afterglow is up for debate, but investors are kicking off the new quarter with little trepidation.

"Heading into earnings, the demand for protection has fallen for most sectors," Credit Suisse equity derivatives strategist Terry Wilson said, noting that investors aren't rushing for a shield the way they were at midyear.

To be sure, investors feel better about some sectors than others. One way of judging is to compare bullish calls and bearish puts for differences in "implied volatility," which is the market's best guess whether a stock will stage big swings.

A few months out, this approach shows that investors are quite bullish about basic-materials stocks, according to a Credit Suisse analysis of options on several SPDR exchange-traded funds. That won't come as much of a surprise to investors watching the current enthusiasm for commodities, especially gold, silver and copper.

Neither will it surprise that investors seem quite guarded on health-care stocks, which continue to be plagued with political and regulatory uncertainty.

The mood in consumer-discretionary stocks, however, suggests an upbeat view through earnings season followed by the onset of worry right around the holiday season.

Investors have been heartened with strong earnings reports from the likes of athletic-apparel titan Nike Inc. and home-goods retailer Bed Bath & Beyond Inc. Their outlook for earnings season is calm judging by their low appetite for protection.

But, looking further out, three-month protective options on the Consumer Discretionary Select Sector SPDR Fund currently show the most bearish options "skew" among 10 major sector funds.

That negative judgment on the health of the U.S. consumer contrasts with the handful of recent bullish signals from holiday-season bellwethers. Toys "R" Us said this week that it will hire more workers for this year's seasonal rush. Earlier came news that discount airlines are pricing some markets significantly higher ahead of what they see as robust demand over Thanksgiving and Christmas.

Three months out, the only sector to show notably bullish sentiment is financial stocks. But this may simply reflect those shares' relative underperformance in the current stock-market rally.

The picture darkens across the market as investors look to January. Among the gauges that strategists watch are futures on the VIX, which can give a window into sophisticated investors' expectations a few months out. The January VIX future contract trades close to 31, well above the index's current level around 24. The wide spread is a sign that investors aren't fully buying into the current rally.

For several weeks, MKM Partners derivatives strategist Jim Strugger has been predicting a stronger market until investors grow too complacent late in the year. He expects more weeks of good news for stocks, with the VIX moving to the very calm 15 to 18 range before any trouble.

In the meantime, quiet in the options market provides earnings-season opportunities. Optimistic investors can use relatively inexpensive bullish options ahead of reports they think will surprise positively. Bears can snap up protection on the cheap.

Goldman Sachs derivatives strategists John Marshall and Maria Grant told clients this week that both Google Inc. and Apple Inc. options seem inexpensive a few weeks ahead of their earnings reports.

In the case of Google, the Internet search titan's options show that even investors who are agnostic on the company's earnings have a shot at profits.

Here is how a Google strategy works in an options "straddle": In this move, investors aim to profit from volatile moves in a stock. They buy a protective put and a bullish call at the same "strike" price, setting up for the stock to move in either direction.

Over the past eight quarters, Google's stock has moved a median 5.6%, the Goldman strategists found.

At Thursday's prices, the straddle cost 5.4% of Google's share price. Thus, investors willing to bet on an average-or-higher swing on earnings don't even need to make a judgment whether tougher times are ahead.

"This is not a quarter where you want to be sitting on your hands and hoping for the best," MKM Partners' Mr. Strugger said. "Implied volatility is at a low enough place to look at any number of strategies."

Write to Brendan Conway at brendan.conway@dowjones.com