30 December 2012

Why Avoiding the Fiscal Cliff Might Actually Hurt the Market (and the Economy)

The fiscal cliff agreement is likely to make the market fall.

The quality of the discussion in Washington will define the quality of the budget deal we get. As of now, it doesn't seem as though the quality is particularly high.

What could easily happen is that a deal gets through Washington that is good for the economy short term but is bad long term. That is to say, the cuts in spending and the hikes in taxes will be minimal, like cosmetics when it is cosmetic surgery that's needed instead. This is good short term because it means that a fragile economy is not hurt by a contraction in consumption. This is bad long term because it means that the deficit will remain unresolved.

If, by contrast, we get a real deal that phases in significant spending cuts and tax hikes, the market will surge. And eventually, so will hiring and salaries.

As of now, that dialogue doesn't seem to be happening. Instead, it is as if the two parties are speaking two different languages and so far, no one has stepped forward to translate.

25 December 2012

The Miracle of Christmas

There is about a 1/365 chance that Jesus was born on 25 December. The Catholics ask you not to forget the mass in Christmas and the Protestants ask that you not forget the Christ. But Christmas never has been a purely Christian holiday, its origins a mash up of various and sundry holidays from Romans, Vikings, cults, and the good people of Coca Cola (who commissioned an artist to create an image of Santa in a bright, Coca Cola-red suit).  The holiday is rooted as deeply in Saturnalia excess of sex and feasting as it is in gift giving and piety.

It’s easy to be dismissive of the emphasis on rampant consumption in the guise of gift giving. There’s always someone who points out that this misses the point of the day but in fact that is as much a part of the holiday as nativity scenes. The holiday would not be so popular if it weren’t malleable, something that most anyone can shape into a day of their own design, even if it is a day for Chinese food and a movie.

For me, the real magic of Christmas is similar to the magic of Las Vegas. Who would think that such a popular tourist destination would spring up in the middle of the desert, and yet there it is. Who would think that Christmas should be considered a time of warmth and light just days after the year’s shortest day, the period of time when winter begins its most bleak weather? How absurd and absurdly wonderful is that?

The miracle of Christmas is simply and wonderfully this: we manage to create a time so very different from the time we’re in. Cold becomes warm. Dark becomes light. A time when nature yields so little becomes a time when people give so much. And for that, it doesn’t really matter whether your celebration tends towards the prurient or the puritan. That alone is enough to make it a “most wonderful time of the year.”

22 December 2012

Texting and Recession Hit Japan First. Coincidence?

Japan's lost decade was from about 1991 to 2000, a period of high unemployment and slow or even negative growth. In this regards, they were ahead of us. Our lost decade was from 2000 to 2009, a period when job creation rates that had averaged nearly 2 million a year dipped into negative territory. In this, they were ahead of us. They were also ahead of us on some technology.

In 2001, I was in Japan riding the subway, I couldn't help but notice that so many Japanese seemed to be averting their eyes, looking into their lap as if it were bad form to make eye contact with other commuters or even to look at them. "Very polite people," I thought. Then I did look at them more closely. I realized that they were playing with something. My first thought was that they had worry beads or the equivalent of Japanese rosary beads. I didn't understand it.

"What are they doing?" I asked my contact at the client's, a man from Canada who'd been in Japan for years.

"They are texting," he said.

"What's that?"

"They type messages to each other," he said.

"On their phones?"


"Why wouldn't they just call each other? How could that make sense to type out a message on a tiny keyboard with your thumbs rather than talk to someone?"

"I don't know," he said. "It's just something Japanese do."

Ahead of us on texting, a form of communication that seems to represent the triumph of the need to connect over the drive for efficiency. And ahead of us on a decade of slow or no economic growth. Maybe productivity simply doesn't matter as much as connection. And once we've got access to the latter, we expend less energy pursuing the former.

20 December 2012

Mayan Apocalypse Nothing. We've Already Had the Battle of Armageddon. Seriously

Given all the attention the Mayan Apocalypse is getting, it’s likely that most people have forgotten about the actual Battle of Armageddon.

The Ottoman Empire was ruled by Turkish sultans for hundreds of years. These Turks claimed the Caliphate, which essentially made them protectors of the holy lands of Islam. It was a position roughly akin to that of the pope during the Dark Ages. But during the First World War, the Turks aligned with the Germans. It would prove to be a huge mistake for the Arab world.

In late September of 1918, the British General Allenby led an odd coalition of troops against the Turks at Megiddo. His troops included soldiers from around the world, as befits the last, decisive battle of this First World War.  The mix of Indians, Australians, American Jews and Brits would have itself been remarkable. Allenby had already conquered Jerusalem, the first head of a Christian army to take the city in 700 years. That, too, was notable in its own right.  Also, in a conflict between two great religions, it seemed curiously appropriate that Allenby was a descendant of Oliver Cromwell’s, the man who led a successful revolt against a king to return Britain to religious purity.  And as if all that was not epic enough, Lawrence of Arabia rode with him into battle.

Allenby may have been the last general to use a mix of cavalry and airplanes in battle. It worked. He routed the Turks and the consequences were sweeping.

The British had come to realize that the Middle East had oil and after the end of the war they divided the region with the French.  The British added Iraq and Palestine to their sphere of influence that already included Saudi Arabia and Egypt. They expressed their support for the Zionist movement, setting in motion the return of Jews to Israel. The caliphate collapsed, taking with it Islam’s dominant authority and leaving in its place conflict over the true definition of, and authority over, Islam ever since.

Thus, one of the last battles of World War One became one of its most defining. Contemporaries and historians refer to Allenby’s battle against the Turks as the Battle of Megiddo. We more often refer to Megiddo, however, by a name that had taken on apocalyptic tones even before Allenby’s time: we call it by its more ancient name of Armageddon.

So the Mayan Apocalypse will be no big deal. Apparently, we're already living in post-Apocalyptic times.

19 December 2012

Tim Minchin Rejects the Notion of Goals

“I personally believe in not setting goals. You don’t get opportunities if you think you know what you’re meant to be doing.”
“I’m incredibly squeamish about ‘I’ve always wanted this …’ ‘this is my dream!’ ‘I’ve always wanted X.’ and all that sort of stuff.  I hate that sort of non-specific language. It doesn’t mean anything to me. I don’t get what you’re saying. You have a dream that doesn’t seem to be influenced by any other factors but your fantasy of it. Probably more of us have the sort of life where happily, lots of opportunities come your way and you need to be ready to receive them by having your eyes not on the prize but on everything around you. I guess if I had to impart wisdom to my children – something I hope I never have to do -  I would just say to work incredibly hard at whatever you’re doing and then people will respect you and they’ll ask you to do something else.”
-         -  Tim Minchin

18 December 2012

Protection from an Oppressive Government

It takes little time before defenders of the 2nd amendment argue that they need arms to defend themselves from an oppressive government.  Our founding fathers, obviously, had to take up arms against the British. There are at least two points worth making about this. One, the revolution was an effort of a people, not a person. It was a well-regulated militia, not an unregulated, lone assassin who fought the British. Two, there was no mechanism for Americans to vote for the right to vote; overthrowing a distant empire is very different than taking up arms against your neighbors because you are unhappy with the most recent election.

There are more problems with the argument than this, of course. Obviously the definition of oppressive is left to the one with the arms. A man abusing his wife and children would of course find a policeman intervening on their behalf oppressive. So obviously he'd need to be equipped at least as well as the National Guard, much less the social worker or police who might show up at his door.

Besides, the US is a nuclear power. If one is intent on being armed well enough to resist this government, there would be dozens of Irans within our borders, groups intent on acquiring the technology to resist the greatest military power known to history. It's hard to imagine stronger refutation of an argument than realization that following its logic takes one to conditions ripe for a Mayan apocalypse.

We already regulate arms. We don't let individuals have sufficient firepower to threaten the Pentagon. There's no reason to let individuals have firepower enough to hold off a local SWAT team. 

17 December 2012

Inventing Santa Claus (who magically appears the week before year end inventory)

In the words of children everywhere, what did Santa brings us? Mass consumption and sales enough to empty shelves just before year end inventory.

One of the more curious social inventions was Santa Claus. Santa did not just make children happy. He made store owners happy. Santa as we know him - the gift-giving saint who holds court in department stores - did not exist before factories began to produce more products than could be sold via old habits of consumption. Like the display windows, Santa was part of an attempt to create a fairy tale land where consumers were convinced that shopping was a kind of magic. He also helped to clear out products just before it was time to perform year-end inventory. He did not just give gifts to children. He was a gift to the stores.

Santa began to appear in department stores in the late 19th century, just as American factories began to produce goods at a greater rate than anyone had dared to imagine even a generation earlier.

Christmas gift giving helped to stimulate sales after the American Civil War. In 1867, “Macy’s department store remain[ed] open until midnight Christmas Eve, set[ting] a one-day record of $6,000 in receipts."[1] Around 1870, Christmas made “December retail sales more than twice those of any other month.”[2] The fact that stores could sell so many products merely one week before year-end inventories was kind of magical.
In that same year, 1870, 
“The United States had the largest economy in the world, and its best years still lay ahead. … This American system of manufacture had created, for better or worse, a new world of insatiable consumerism, much decried by critics who feared for the souls and manners of common people. The world had long learned to live with the lavishness and indulgences of the rich and genteel; but now, for the first time in history, even ordinary folks could aspire to ownership of those hard goods—watches, clocks, bicycles, telephones, radios, domestic machines, above all the automobile—that were seen in traditional societies as the appropriate privilege of the few. All of this was facilitated in turn by innovations in marketing: installment buying, consumer credit, catalogue sales of big as well as small items; rights of return and exchange. These were not unknown in Europe, which pioneered in some of these areas. It was the synergy that made America so productive. Mass consumption made mass production feasible and profitable; and vice versa.”[3]

[1] Beniger, The Control Revolution, 260.
[2] Beniger, The Control Revolution,
[3] David S. Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Some So Poor (New York: Norton, 1999). 307.

13 December 2012

Bernanke Offers a Solution to the Fiscal Cliff (or, the real lesson from Spain and Greece)

Federal Reserve Chairman Ben Bernanke offered a simple solution to the deficit problem: wait until unemployment drops to 6.5% before enacting measures to raise taxes and cut spending.

Bernanke actually announced that his monetary policy would continue to stimulate recovery until unemployment drops to 6.5% or inflation rises to 2.5%. There is no reason that similar guidelines could not be used for fiscal policy as well, though.

Analysts are forecasting how many jobs will be lost if automatic tax hikes and spending cuts are triggered in January. It could cost as many jobs as we've gained since the bottom of the Great Recession. This is not because deficit reduction will always cost us jobs. This is because deficit reduction will cost us jobs when unemployment is still high. Using a guideline like Bernanke's for fiscal policy would change that.

The real lesson from Greece and Spain is simple: if you spend like drunken sailors on shore leave during good times and then sober up to begin cutting spending when times are hard, you'll first create a bubble and then a collapse. This is the worst possible combination.

Job losses from some combination of tax hikes and spending cuts are inevitable. What is not inevitable is that these job losses will matter terribly much. If unemployment is at 4.5% and we're creating 200,000 jobs a month, the job losses from deficit reduction will neither be hard to offset nor particularly hard on the economy. Timed properly, the tax hikes and spending cuts might actually shed jobs at about the rate that the economy is creating them. That's possible. Deficit reduction now when unemployment is at 7.7% and we're creating about 150,000 jobs a month could, by contrast, easily tip us into recession and cause unnecessary hardship.

We needn't force a trade off between deficit reduction and another recession if we simply wait. There is no reason that fiscal policy could not follow the same guidelines that Bernanke just laid out for monetary policy.

But there is a deeper problem. We live in a time of incredible potential and great risks and yet our epitaph will be that in face of all that we were re-hashing arguments from Economics 101 and second grade arithmetic. This fact is more worrisome than any short term deficit or recession. It's as if you still have to tell your teenager to brush his teeth. Ridiculous.

12 December 2012

Multitasking in Meetings a Century Before Laptops (Love Letters and Other Distractions)

I have this tendency to think that multitasking with emails and such during meetings only became rampant with the introduction of laptops. Before, I thought, one could at best daydream. I was wrong.  Reading a book of British history, I ran across this account of the British government during World War I – hardly an affair one could safely ignore. And yet they did, starting with the Prime Minister.

… as the cabinet talks went on, covering munitions, strategy in the Mediterranean and the possibility of prohibition, the prime minister was distracted, as he often was. He was writing to the twenty-eight-year-old woman with whom he had been deeply in love for three years. He wrote to her most days, and sometimes several times a day, letters crammed with gossip and, though from a sixty-three-year-old man, as wildly passionate as any from a brimming youth. Meanwhile, as [Prime Minister] Asquith was scribbling with only one ear on the cabinet debate, a few feet away another minister was also writing. Edwin Montagu had long been one of Asquith’s most trusted supporters and now, still in his mid-thirties, had recently been brought into the cabinet. …. He too was only half paying attention to the cabinet debate. In fact, he too was writing a love letter: “My very dear one, I have never received, I need not tell you, a letter so thrilling and delicious as yours this morning. God bless you for it!” And his letter was to the same woman as the prime minister’s letter.

Montagu did not just describe his affection. He described the cabinet meetings themselves, sharing details that confirmed suspicions of the time. He signed off another letter,

Yours very disjointedly and disturbedly (Winston [Churchill, at the time just another minister, not yet prime] is gassing all the time) …

It has only been a century. In light of that, perhaps it makes sense that little has changed.

 The book is Andrew Marr's The Making of Modern Britain.

08 December 2012

From Jobs Shortage to Labor Shortage - a Forecast of Good Times

Given we've yet to fully recover from a recession begun 4 years ago, it is easy to be pessimistic about the future.  But pessimists will miss a demographic trend that is likely to dramatically change the job market over the next few years. At the risk of sounding like a contrarian, I'd like to predict a worker shortage that will soon improve employment opportunities.

Baby boomers are retiring, leaving the job market in droves. The generation coming of age is the product of lower birth rates. This suggests a coming labor market crunch, a worker shortage. This can be seen in the small gap between the number of people retiring and the number entering the job market.

Each year, more than 3 million new graduates enter the job market to take the place of nearly 2.4 million retirees. If every retiree left behind a job for a new worker, that would leave nearly 700,000 new graduates without  a job. But the American economy has historically created close to 2 million jobs a year, just as it has in the last 12 months. 

Decade    Avg. Annual Job Creation
1960s                   1.7 million
1970s                   1.9 million
1980s                   1.8 million
1990s                   2.1 million
2000s                  -0.1 million
Last 12 months     1.9 million.

If you create jobs faster than people enter the job market, the unemployment rate drops. If the American economy adds 2 million jobs while only 700,000 new people enter the job market, the unemployment rate will drop about 1%, just as it did in the last 12 months. The lower the rate of job entrants, the low the rate of job creation necessary to lower unemployment. If the American economy continues to create roughly 2 million jobs a year with this lower rate of (net) new entrants, demand for labor will rise faster than its supply and wages will rise.

The history of recent decades suggests that the rate at which the American economy creates jobs changes less rapidly than does the rate at which children become adults and need jobs.

In the 70s, the American economy created 1.9 million jobs a year and yet unemployment was 2.5% higher at decade's end than it's beginning. By contrast, in the 80s and 90s, the economy created roughly the same number of jobs and yet unemployment steadily fell. The baby boomers born in the late 40s began hitting the labor market in the 70s. Birth rates roughly 21 years earlier explain unemployment rates as much as job creation rates. Whether 2 million new jobs lowers or raises unemployment depends on how many young adults are entering the job market.

In 1966, roughly 2.7 million young people turned 21 and unemployment was 3.8%; by 1972, 3.8 million turned 21 - rose a million - and the unemployment rate rose to 5.2%. By 1975, 4 million turned 21 and that year unemployment hit 8.2%. It seemed to take awhile for the economy to absorb these new adults as employees. As the rate of new job entrants increased, so did unemployment rates. From 1984 to 1988, the number turning 21 dropped from 4.1 million to 3.5 million, and unemployment dropped as well, from 7.3% to 5.3%. From 1991 to 1997, the number turning 21 dropped further, from 3.7 million to 3.2 million and unemployment also dropped further, from 7.3% to 4.7%.

Here's a table showing changes from the beginning to end of the decade:

Decade    Change in Number Turning 21       Change in Unemployment Rate
1970s                  +0.7 million                                     +2.5% (from 3.5 to 6)
1980s                  -0.7 million                                      -0.6%  (from 6 to 5.4)
1990s                  -0.3 million                                      -1.4% (5.4 to 4)
2000s                  +0.5 million                                     +5.9%  (4 to 9.9)
2010s*                    0 million                                      -2.2% (9.9 to 7.7)                                 
*so far

There is more going on here than demographics, but an increase in the rate of people turning 21 seemed to drive an increase in the unemployment rate. (The aughts were fraught with issues more complicated than demographics and every decade had its issues separate from birth rates of decades earlier.) A drop in the rate of new 21 year olds seems to cause a drop in unemployment; a rise in that rate of new 21 year olds seems to cause a rise in unemployment. These two rates tended to move together.

This bodes well for our decade. Not only is the rate of new 21 year olds dropping but the baby boomers are now retiring. Job creation rates don't have to be terribly high to bring down unemployment rates quite a bit.

Many critics have claimed that the American economy is not creating jobs fast enough. What critics miss is that this economy does not now need to create as many new jobs to lower the unemployment rate. In fact, we already have a strong recovery. Soon, the evidence of this will be seen in paychecks. 

The really good news is that this decade should reverse the terrible decade of the aughts, when we lost more jobs than we created. The even better news is that for the first time since the late 90s, workers will find themselves in a stronger position to negotiate for pay, benefits, schedules, and the design of jobs. In fact, the job boom of the 2010s may be even better than that of the 1990s. 

Happy holidays!

07 December 2012

Why the New Economy is Changing Us From Specialists to Systems Thinkers

The current issue of the Atlantic has a couple of fascinating and hopeful articles about how manufacturing is coming back to the US, creating jobs to replace some of the millions lost in the last few decades of outsourcing.

In the old model, jobs could be outsourced because specialists didn't depend a great deal on one another. Like plugging in different brands of monitors and mice to a computer, marketing, engineering, and manufacturing can all be plugged into one another, little dependent on one another for their tasks. Once manufacturing was independent of design, why not outsource it to the country where labor was cheapest?

Of course it took time to get these factories up to speed, but you would likely make the same model washer machine or refrigerator for about 7 years. If it took 6 months to even a couple of years to get all the problems resolved in manufacturing, one still had years to profit from smooth, predictable operations.

The old model was driven by specialists who worked independently. Now, a new model is emerging that requires a systems perspective rather than specialists.

As it turns out, when a product evolves it requires changes on every front. Manufacturing capability could drive a new consideration in engineering and design. Design breakthroughs may drive a change in how the product gets supported in the field, after sale. Marketing insights into trends may drive changes in all of this. Systems are defined at least as much by the interaction of parts as the parts that are interacting. These interactions suggest steady communication and adaptation between the specialists whose work increasingly is defined in coordination with one another rather than in such isolation that it can easily be performed on separate continents.

The impact of this shift is that manufacturing jobs are coming back from China to the US. The reason for this is that the coordination required to design and redesign rapidly evolving products requires specialists to spend more time coordinating than working heads down on their own piece of the puzzle. Products might be updated every 2 years now instead of every 7 and assuming that specialists can work through their issues in serial is to set in place a plan that works out the kinks in design and manufacturing about the time that the product is obsolete. Specialization is less profitable.

Systems thinking is to this new, entrepreneurial economy what pragmatism was to the information economy. In place of specialists we will increasingly need systems thinkers able to coordinate, design, and create whole  products instead of just focusing on manufacturing or design issues as if they could be worked separately from each other. It is not just that our modern world will be defined by the health of systems as varied as ecosystems, financial systems, or health systems. On this score it seems obvious that systems thinking will be important. But as it turns out, even systems considerations as seemingly prosaic as product creation will be important to this new economy. It may even be this door through which systems thinking enters the popular vernacular.

Anti-Immigrant Economic Drag

Since 9-11, it's been noticeably harder for immigrants to enter the US. James Fallows writes in the the Atlantic of Liam Casey, whose company is headquartered in Ireland and employs about 4,000 people, mostly in China. Casey named his company PCH, after the Pacific Coast Highway in California.

The PCH connects two of my favorite cities, San Diego and Santa Cruz, and runs through a host of other great communities like Monterey, Carmel, and Big Sur.

Unable to get a Green Card and stay in California, Casey named his thriving company after a place he dearly missed but was unable to live in.

Most Americans seem unaware of how few immigrants we allow into the country and how many jobs even an employed engineer helps to create, much less an entrepreneur.  

04 December 2012

Entrepreneurship not Capital: What Limits San Diego's Economy?

San Diego's new mayor Bob Filner has a thousand competing claims on his attention. Where he focuses will make all the difference in how effective he is. If he wants to be really effective, he’ll adapt his policies to new realities.

The most important new reality is that we’ve entered a new, entrepreneurial economy as different from the information economy as that was from the industrial economy before it. The limit to progress has shifted to entrepreneurship and adapting to that will drive sweeping change.

An industrial economy is limited by capital. As a community gets more financial and industrial capital and learns how to make them more productive, it becomes more prosperous. Funding for factories, invention, and infrastructure yields a huge return.

An information economy is limited by knowledge workers. As a community focuses on creating more knowledge workers and making them more productive, it becomes more prosperous. Funding for great public schools, universities, and R&D yield a huge return.

It’s not obvious that our limit to progress is still capital or knowledge workers. This can be illustrated right here in San Diego. Qualcomm alone holds $12 billion in cash. Last year SDSU, UCSD, and USD sent about 20,000 graduates into the world. 

Republicans argue for tax cuts on capital gains, suggesting that we simply need more capital to create more jobs. Democrats argue for more education, suggesting that we simply need more knowledge workers to create more jobs. The policies to support such arguments are increasingly expensive and seemingly less effective than they used to be.

I simply don't buy these arguments. Instead, it seems to me that 200 more great entrepreneurs would do more for job creation in San Diego than would another $10 billion in cash or another 10,000 great college graduates. The new limit is entrepreneurship.  The big question of the information economy was, “How do we create more knowledge workers and make them more productive?” The big question of this fourth, entrepreneurial economy is, “How do we make more people more entrepreneurial?”

There is, of course, a great deal to a transition into a new economy, but most of it follows from communities shifting their focus from the old question to the new. In our case, making more people more entrepreneurial will create demand for more capital and knowledge workers, raising returns and creating better jobs. We will still need more knowledge workers and more capital in the new economy, but these now follow rather than lead economic progress. There are implications for government policy, for education, and most of all, for corporations. For now, it's enough to ask a new question.

Big Question
1st, Agricultural
1300 – 1700
How do we get more land and make it more productive?
2nd, Industrial
1700 – 1900
How do we create more capital and make it more productive?
3rd, Information
1900 – 2000
How do we create more knowledge workers and make   them more productive?
4th, Entrepreneurial
2000 – 2050
How do we create more entrepreneurs
and make them more productive?
 What' s true in San Diego is true across the US. 

In 2009, American corporations held about $5 trillion in liquid assets. Since 2008, about $2 trillion in cash has been added to bank deposits. Think about how much the need for capital has changed in the last century. An iconic startup in the 1900s and 1910s was a car company. For that you needed a lot of capital – financial and industrial. Today's iconic startup is an Internet company and for that you need a group of smart knowledge workers armed with laptops. It’s hard to argue that such ventures are limited by capital.

It's more plausible that we're limited by knowledge workers, but this, too, is a difficult claim. In 1900, fewer than 5% of 14 to 17 year olds were formally enrolled in education. By 2000, fewer than 5% were not. It's hard to imagine ever again matching the dramatic gains in knowledge workers of the last century or the economic output that came with them. The gain from 5% of teenagers to 95% enrolled in formal education is huge. There is no way to match that dramatic gain with the remaining 5%.

Capital matters. So do knowledge workers. But they aren’t enough. And yet our policies - trillions in tax incentives for investments and trillions more in education - are all predicated on the notions that the limits to progress are capital or knowledge workers. Maybe if we didn't spend so much trying to educate the last 5%, or offering tax breaks to encourage the next billion in investment, we'd have money to spend to make entrepreneurship easier, to make it a more obvious career choice for our young people. As it is, we're facing new realities with dated strategies - like adventurers who insist on staying in the boat even after they've hit shore.

We’re living in one of the great transition points in history. Whether that’s painful or wonderful depends a great deal on whether we cling to old policies or embrace new ones. That might start with something as simple as communities everywhere in the developed world starting to ask the right question.

01 December 2012

Did All the Fuss About Xmas Start with a Pun?

Every year certain people are compelled to prove their religious righteousness by accusing pagans and secularists of taking Christ out of Christmas, turning Christian's most important holiday into Xmas.

It could be more innocent. Xmas might have begun as a romantic and goofy pun based on sound. X stands for Kiss in signatures and Kissmas does sound a little bit like some loopy romantic's intentional mis-pronunciation of Christmas.

Or it could be Satanic.