Bureau of Health

By |2014-09-05T18:39:37+00:00April 16th, 2010|Global Market Update|

Usually around April 15 all we hear about are taxes, taxes, taxes. Now its jobs, jobs, jobs. One of the bright parts of the jobs picture has been health care. While total payrolls have fallen by 1.4 million jobs over the past year, there are 250 thousand more health care jobs in the economy now than there were a year ago. But is this a good thing? According to one study, for every doctor treating patients there are 5 administrative support people. Which makes [...]

A Taxing Problem

By |2017-07-17T12:35:19+00:00April 14th, 2010|Global Market Update|

Is the tax code too progressive? A lot of folks talk about marginal tax rates on the rich. After the Bush tax cuts expire, with the surcharges for health-care and the phase-out of deductions, a lot of upper-income folks will be facing marginal tax rates of as high as 70% in some states. That means that the government is subsidizing leisure: time off without pay costs them a lot more than it costs you. But progressivity is a problem for the other end of [...]

Call Hercules

By |2014-09-05T18:37:56+00:00April 13th, 2010|Global Market Update|

Is the IMF bailout just another Greek myth? In one of the famous Labors of Hercules, he had to defeat the Hydra, a many-headed serpent. Every time he cut one off, two more would grow back in its place. Debt guarantees are like fighting this beast with a sword. Every time a plan is cobbled together, two new problems emerge. The latest idea is to come at the problem with overwhelming cash--€30 billion in guarantees. But this just kicks the can down the road; [...]

The Rules (Part 1)

By |2014-09-05T18:37:24+00:00April 12th, 2010|Global Market Update|

What are the tools? A couple days ago I said that we have the tools to be ready for the uncertain future that lies before us. Some have asked me what I meant by that. The first rule to follow when you don’t know the future is to diversify. This is a rule as old as the Bible. When trouble hits, if you have your savings split up, some of your money will come through okay. Second, be patient. It takes years to accumulate [...]

What Goes Around Comes Around

By |2014-09-05T18:36:36+00:00April 11th, 2010|Global Market Update|

Are emerging markets the future? An old saw goes that Brazil is the country of the future and always will be. Certainly the past 10 years have seen significant growth in many emerging markets. Investors are now standing on their heads trying to find ways to put money to work there. But history tells us that investment booms can lead to financial busts. When investors take an interest, capital flows in leading to currency appreciation, commodity price increases, and domestic credit expansion. Banks lend [...]

A Tale of Two Chairmen

By |2014-09-05T18:36:05+00:00April 8th, 2010|Global Market Update|

He was the best of Chairmen, he was the worst of Chairmen. It was an age of heroes, it was an age of villains. We were all retiring at 30, we were all working until we dropped. It’s fascinating to watch the transformation of Chairman Greenspan from Maestro to mud. Ten years ago news hounds hung on his every word. Now…. What a difference a decade makes! Over the last several days, the former Chairman has endured criticism from lucky hedgies, wannabe regulators, and [...]

A Bank Bailout

By |2014-09-05T18:35:29+00:00April 7th, 2010|Global Market Update|

So where will the biggest losses come from? Earlier this year the Treasury revised its estimates of TARP losses down from almost $350 billion to just over $100 billion. Where did the extra money come from? Surprisingly, it came from the banks. Many of the big banks quickly paid back their TARP loans—with interest—and bought back their stock warrants after Ken Feinberg was put in charge of their payroll. The Special Master for Compensation made it very clear that cash compensation would be limited [...]

Hidden Assets

By |2014-09-05T18:34:57+00:00April 6th, 2010|Global Market Update|

When I was in school, it was a commonly assumed that overpopulation was humanity’s greatest risk. Now, it seems, that assumption has been turned on its head. Over the next 40 years, demographers estimate that the US population will grow by another 100 million. This population will be young and energetic, with only a quarter over 60. Our 2.6% annual growth will be partly driven by a higher birth rate, but also by immigration. America remains a melting-pot, attracting the best and the brightest [...]


By |2014-09-05T18:33:13+00:00April 5th, 2010|Global Market Update|

When domestic politics gets rough, go for the foreigners. That was Henry IV’s final advice to his son in a memorable scene. And that may be what’s playing out now as Treasury evaluates whether China is a currency manipulator. Yesterday Treasury announced that they would postpone this evaluation until after several multilateral trade meetings at which China would be present. This is important, because it allows the Chinese to save face. The legislation that requires public humiliation of our trade partners is a Catch-22: [...]

Good Enough For Now

By |2017-07-17T12:35:19+00:00April 2nd, 2010|Global Market Update|

Last week we heard about employment, and it looks okay. Last week’s employment report had loads of data, almost all of it good news. Temporary employment continues to grow. Manufacturing payrolls are going up. Hours are going up. These are all leading elements of the employment picture, for obvious reasons: when things pick up in an economy, employers increase hours and add to temp staff before they add permanent workers. And manufacturing employment is more economically sensitive. Yes, state government employment decreased—that’s normal. States [...]