A Man on the Moon

By | 2014-09-05T17:50:42+00:00 October 29th, 2010|Global Market Update|

Why is this so hard? Why can the Federal Government stem a financial meltdown but can’t balance its books? How can we bounce back from 9/11 but can’t shut down the Taliban in Afghanistan? I call this the man on the moon question. Back in the ‘70s people would ask, if we can put a man on the moon why can’t we … and would fill in the blank. It’s a reasonable question. Space flight seems daunting. Fixing schools, or race relations, or government [...]

Recovering the Future (Part 2)

By | 2014-09-05T17:50:15+00:00 October 28th, 2010|Global Market Update|

Motivation matters. How can we get the economy out of its funk without going through a long slog? We need to unleash the entrepreneurial energy of our country. Some European observers have noted that the US seems unusually dour. The usual can-do optimism seems lacking. And one way to change this is to change the structure of our taxes. By altering the structure, I mean lowering the marginal tax rate while raising the effective tax rate. That way people pay more in taxes, but [...]

Recovering the Future (Part 1)

By | 2014-09-05T17:47:51+00:00 October 27th, 2010|Global Market Update|

Is this the multi-tasking recovery? GDP has passed its pre-recession high. Corporate profitability has never been stronger. Balance sheets are healthy and interest rates are low. So why does this recovery feel so lousy? It feels lousy because of jobs. Back in the ‘90s, the joke went something like: “Did you hear that the economy created 300 thousand jobs last month?” “Yeah, and I’m working three of them.” The idea was that the jobs created by the recovery were substandard and didn’t provide enough [...]

Healthy Outcomes

By | 2014-09-05T17:47:32+00:00 October 26th, 2010|Global Market Update|

Is the Health Care system on the rocks? Reduced Medicare payments, lower payroll tax collections, and scandals among drug makers might make you think so. In the wake of the health care debates, the health care sector declined about 5%. Many investors have all but written off the entire industry. But is that reasonable? Health care is an essential service. Sure, some optional procedures, like cosmetic surgery, have suffered during the recession, but overall, demand has been solid. Since the recovery began a year [...]

Saving Private Keynes?

By | 2014-09-05T17:47:10+00:00 October 25th, 2010|Global Market Update|

If saving is a private virtue but a public vice, the Keynesians will hate this. Citibank has teamed up with microlender Grameen Bank to provide financial services to thousands of residents from Queens and Harlem. While New York may be home to Wall Street and the $10 million walk-up apartment, it is also home to millions caught in a vicious cycle of poverty and dependence. Key to breaking this is savings and enterprise. Microloans are 100-1000 dollar loans that allow people to start or [...]

The Age of Austerity

By | 2017-07-17T12:35:18+00:00 October 22nd, 2010|Global Market Update|

Among policy wonks there's a great debate raging: can a nation save its way to prosperity? But among the electorate, the issue seems to have been decided. Economists have been divided over whether Britain's new frugality will work. Most are skeptical: Keynesian orthodoxy would posit that a decline in government spending will multiply it's way throughout the economy and lead to economic stagnation at best, if not outright decline. Cutting spending when the economy is fragile is dangerous. But others aren't so sure. They [...]

Think Globally, Invest…

By | 2014-09-05T17:43:08+00:00 October 20th, 2010|Global Market Update|

Are the markets inside out? Everyone says that Asia is the world's new growth engine and that the US economy will be sluggish for years. So why are Asian markets struggling while our stock market seems to be buoyant? Isn't China the world's biggest creditor? Yes, China has built it's economy on exports and so it has amassed massive foreign exchange reserves. And yes, the further emergence of hundreds of millions of Chinese and Indian peasants will help the global economy. But it doesn't [...]

OIMBY

By | 2014-09-05T17:42:04+00:00 October 19th, 2010|Global Market Update|

People love their own institutions. Ask someone what they think of the educational system in this country and you’ll probably hear that it’s a mess. Ask them what they think of their neighborhood school and they’ll likely tell you that it’s just fine, thanks. Their school is okay, it’s all those other schools they’re worried about. A big problem is that of framing. We don’t know what we don’t know, and what we really don’t know are the standards and execution of other schools, [...]

Of Morals and Markets

By | 2017-07-17T12:35:18+00:00 October 18th, 2010|Global Market Update|

Pay-to-Play isn't a household word. But in the money-management business, it's a business strategy used far too often that corrupts both the givers and receivers. The poster child of pay-to-play is Alan Hevesi, the former New York State official who controlled the state's $125 billion pension system. Any firm that wished to manage part of this fund had to contribute to Mr. Hevesi's reelection fund and perhaps ingratiate itself with other gatekeepers. Lots of folks got caught up in this scandal. The most prominent [...]

Music, RIP

By | 2017-07-17T12:35:18+00:00 October 14th, 2010|Global Market Update|

The music industry is dead. Long live music! New technology has always profoundly altered music. First it was the violin, an alternative to the violoncello that could “sing.” Then it was the pianoforte, a keyboard instrument that allowed Beethoven to pound out notes that even he could hear. Then records, radio, MP3s and downloads. After every change, gloom-sters proclaimed in gravelly voices the end of music. Lately, the business has had trouble: since the 2001 deal with Napster file sharing sites have multiplied like [...]