Muddling Mergers

By | 2014-09-03T18:11:20+00:00 April 16th, 2008|Global Market Update|

Mergers are in the news. Delta and Northwest are getting together. Circuit City wants to buy Blockbuster. And Microsoft is courting Yahoo. What do all these mergers have in common? Formerly great companies are trying to combine operations to save costs. But if the top line doesn’t grow, the combination isn’t likely to add any value. Consider today’s airline merger. It wasn’t so long ago that these giants were in Chapter 11. Now, they hope that by bringing their computer systems together they’ll save [...]

Tax Time

By | 2014-09-03T18:10:06+00:00 April 15th, 2008|Global Market Update|

Today is tax day. Most people who are due refunds have already filed. But if you are paying taxes today, you should do what you can to protect your return from identity thieves. What to do? First, use certified mail. It only costs a couple bucks; the receipt will let you confirm when you mailed your check; and as a bonus a lot of post offices have pizza and doughnuts late on tax day. Second, give e-filing a pass. There are lots and lots [...]

Here Come the Bankruptcies!

By | 2014-09-03T18:07:39+00:00 April 14th, 2008|Global Market Update|

News reports indicates that Frontier Airlines and Linens n Things are filing for Chapter 11 bankruptcy. They join a growing list of companies that can’t pay their debts: firms like Skybus Airlines, Movie Gallery, and First Marblehead Bank’s student loan guarantor. Bankruptcies make for dramatic news copy. It’s all there: management errors, layoffs, worried bankers, and courtroom drama. But they rarely forecast anything but last year’s economy. As an example, filings spiked in March of 2001, well after the tech bubble had begun to [...]

Trade Balancing Act

By | 2014-09-03T18:06:20+00:00 April 11th, 2008|Global Market Update|

Lots of people are worried about trade. Last year the trade deficit was over 5% of GDP. That’s a lot of potential jobs. Many commentators feel that the dollar has to fall dramatically in order for the US economy to become competitive enough to balance things out. I think that this is too simplistic. Look at the details. Of that 5%, 1½% is oil imports. A lower dollar won’t help with those. Another 1½% is with China. The dollar’s already falling there. A lower [...]

Boeing’s Dreamship?

By | 2014-09-03T18:05:02+00:00 April 10th, 2008|Global Market Update|

What is it with the Dreamliner? Boeing just announced its third delay in the dream-ship, putting it a year and a half behind schedule. When Boeing first proposed the aircraft, it was considered a model of new design and production know-how. Many of us cheered as orders for almost 1,000 planes rolled it. I never wanted to ride on Airbus’s mega-carrier, and now I could seemingly fly almost halfway across the world without so much as a refueling stop. Then the delays started coming [...]

Greenspan’s Legacy

By | 2014-09-03T18:02:39+00:00 April 9th, 2008|Global Market Update|

Alan Greenspan is worried about his legacy. When he retired two years ago, he was lionized as the greatest central banker in history. Now, with the economy slipping and the markets in turmoil, St. Alan is in danger of seeing his halo tarnish. In Greenspan’s defense, many critics look back with hindsight and “forecast” what he should have done four years ago. Where were they when he was making his tough calls? In fact, the low interest rates that helped feed the housing boom [...]

Thinking About Health Care

By | 2017-07-17T12:35:25+00:00 April 8th, 2008|Global Market Update|

How should we think about Health Care? Is it a fundamental human right? Is it a value-added service? Or a staple product like soap and toothpaste? However we approach it, whoever provides healthcare needs to be paid. And the way we pay for healthcare will affect the quality of that care. Consider drugs. They cost a fortune to develop. But once they’re on the market, they cost pennies to produce. That means that if people use more prescriptions to treat their health problems, the [...]

The Worst Market in 70 Years? (Part 3)

By | 2014-09-03T17:59:09+00:00 April 7th, 2008|Global Market Update|

Last week I talked about some of the volatility that we’ve seen in the past, partially in reaction to an S&P comment that this is the most volatile market in 70 years. In researching this piece, I came across a truly frightening market: London in the mid-70’s. The U.S. crisis in the ‘70s had nothing on its English counterpart. At the heart of the economic problems was a worker’s strike that left many residents of the City of London with power only 3 days [...]

The Worst Market in 70 Years? (Part 2)

By | 2014-09-03T17:57:04+00:00 April 4th, 2008|Global Market Update|

Is this the most volatile market in 70 years? By some measures it is. The ups and down in the stock market have been hard on investors. They play havoc with people’s expectations, and lots of people are wondering if the system is broken. While the present challenges are serious, they pale in comparison to crises of the past. For example, in the mid-‘70s we were facing accelerating double-digit inflation, a domestic political crisis, and an aggressive Communist enemy. No wonder the S&P traded [...]

The Worst Market in 70 Years? (Part 1)

By | 2014-09-03T17:54:44+00:00 April 3rd, 2008|Global Market Update|

S&P says that this is the most volatile market in 70 years. It’s true that so far this year the stock market has moved more than 1% each day over half of the time. But the kind of problems that the market is seeing now pale in comparison to some of the markets of the recent past. For example, in late 1987 we saw some real stresses. The market had gone up almost 40% through August. Then the market turned and gave it all [...]