Back Home Again (Part 2)

By | 2014-09-12T10:58:05+00:00 July 30th, 2009|Global Market Update|

It turns out home prices aren’t so far from coming back after all. Yesterday I wrote how housing activity usually picks up before housing prices do. Well yesterday we got housing price data too, and it was pretty encouraging. The Case-Shiller index of home prices reported that prices actually rose, on average, in May versus April. This is the first actual rise in the index in almost three years. It’s hard to see how the index could be higher if foreclosure sales are pulling [...]

Health Care Express

By | 2014-09-04T19:20:07+00:00 July 29th, 2009|Global Market Update|

Now that the House has reached a compromise on health care, we can all breathe easier. That's the theory, anyway. Congress believes that having portable health care that competes with insurance companies will enhance our productivity by freeing up workers who might not change jobs or start new ventures because they might not get health insurance But a major issue is preserving innovation. Our health care companies have been the most innovative in the world. Indeed, 14 of the world's 20 biggest health care [...]

Back Home Again

By | 2014-09-05T13:13:19+00:00 July 28th, 2009|Global Market Update|

Is the housing market finally turning around? Yesterday the Commerce Department reported that new home sales rose 11 percent to an adjusted annual rate of 384 thousand units per year. With prices still falling, sales have now risen for three months in a row to their highest level since November. Now, November was no great shakes. But now the data is headed up, not down like before. And while national new home sales don’t even add up to half of the total foreclosure activity [...]

Revenues? We don’t need no stinkin’ revenues!

By | 2014-09-04T19:07:59+00:00 July 27th, 2009|Global Market Update|

Some people you just can't make happy. Like the proverbial rain that falls on a parade, a host of gloom-meisters are out dissing the current earnings season. Sure, earnings are way better than expectations. Sure, Ford, AT&T, and Caterpillar earned way more than anyone expected. Sure they're in economically sensitive industries. But what about sales? You see, most of these bottom-line gains have come from cost-cutting. If the economy remains in recession, a lower sales number will make future earnings growth really hard. So [...]

My Other Car is Also

By | 2014-09-04T19:05:54+00:00 July 24th, 2009|Global Market Update|

These days, car trouble is a global business. VW is looking to buy Porsche. The Chairman of VW is actually part of the Porsche family. A few months ago it looked like Porsche was going to buy VW, but when that deal fell apart, the head of Porsche and his deputy quit. So now it looks like VW will be the buyer. Hey, VW has a strategy of purchasing distinct brands and managing them well. This acquisition should fit right in, with Porsche a [...]

Obi-Wan Speaks

By | 2014-09-12T10:58:17+00:00 July 23rd, 2009|Global Market Update|

From the halls of Congress to the pages of the Wall Street Journal, we're getting an earful. Fed chairman Ben Bernanke spoke to Congress yesterday about how the Fed intends to remove the piles of cash they've been throwing at our economic problems. The short answer is, they'll raise rates. But not any time soon. The larger question he's facing is why we need an independent Fed at all. After all, the Constitution clearly calls for Congress to regulate our currency. But Congress is [...]

Poor Little Rich Schools

By | 2014-09-04T19:03:59+00:00 July 22nd, 2009|Global Market Update|

Well that worked out well. For the last ten years we've listened to Ivy League endowment managers discuss the value of timberland investments, private equity, and venture capital. While these approaches aren't available to the average shareholder, many wondered if the combination of asset size and longer time horizons meant that school endowments weren't working with a permanent advantage. Well it didn't work out that way. While the market is well off its March lows, private equity and real estate haven't recovered yet. Many [...]

Small Steps

By | 2014-09-05T13:12:10+00:00 July 21st, 2009|Global Market Update|

That was some giant leap. 40 years ago Neil Armstrong became the first man to walk on the moon. Now astronauts fix clogged plumbing in orbit and orbital telescopes look for planets elsewhere in the galaxy. But without manned exploration there is little romance left in the space program. Some blame a failure of imagination, and some blame budget cuts, but I think the real culprit is physics. Apollo missions took a couple weeks. Martian missions would take 2-3 years. The logistics are daunting, [...]

Wait? Wait for What?

By | 2014-09-04T19:01:52+00:00 July 13th, 2009|Global Market Update|

Lord, give me patience. And please, give it to me quickly. That's what many people are praying these days. Encouraged to wait patiently for the economy's recovery, they're compulsively tapping a foot. For a while it looked like all the data were improving. Then came last month's employment setback. Now a raft of statistics look gloomy. Some are calling for a second stimulus program as a result. But there are positive signs, like the leading indicators and production surveys. What they're telling us is [...]

The Winds of Change

By | 2014-09-04T19:00:27+00:00 July 9th, 2009|Global Market Update|

The wind farm is a blowout. That's what's happening to T. Boone Pickens' plan to use prairie winds to save America. Without a grid to transport the power, it can't get from the Texas panhandle to where people live. And with energy so cheap, nobody wants to lend the money to build the power lines. Things have changed since last summer when Pickens along with everyone else predicted that $100 oil was here to stay. The "Pickens Plan" was to use wind to generate [...]