The Law of the Jungle

By |2014-01-08T15:52:25+00:00November 16th, 2010|Global Market Update|

Croplands are monocultures. Wild areas are diverse. Which is better? It depends on what you want. If you’re looking to get as much food as possible with the least energy input, then you want managed fields. On the other hand, if you’re looking for new types of plants that can survive the stresses and strains of nature, then you want a diverse wilderness. I thought about this while considering China’s state-capitalism in comparison to America’s entrepreneurial system. There is no question that China emerged [...]

Newborn Investing

By |2014-01-08T15:51:47+00:00November 15th, 2010|Global Market Update|

Many people seek out start-up companies for investment, but how about start-up countries? A good example is Kosovo. The former Serbian province burst onto the international scene in the late ‘90s, when NATO intervened in what was until then a Balkan civil war. Conflict between the Albanian Muslims and the Orthodox Serbs goes back at least to World War II, although the first Battle of Kosovo was fought in 1389. Because of NATO’s actions, Kosovars idolize all things American. Bill Clinton and Madeleine Albright [...]

Looking for Mr. Right Market

By |2014-09-05T15:12:08+00:00November 11th, 2010|Global Market Update|

There are no perfect people. Why do we expect perfect markets? Among the supposed lessons learned in the financial crisis was the “fact” that markets aren’t efficient. Since so many people clearly mispriced sub-prime, Alt-A, and Home Equity mortgage-backed securities, that market—and by extension, all markets—cannot be efficient. But an efficient market doesn’t mean that all prices always reflect fair value. It means that it’s really hard to beat the market. It’s hard to go with the crowd when they’re all running the same [...]

The Greatest Commandment

By |2014-09-05T15:11:38+00:00November 10th, 2010|Global Market Update|

Is there a key to successful investing? The answer is yes, but it depends on what you mean by success, and what you mean by investment. If by successful investing you mean 20% annual returns with no risk and daily liquidity, then no, there is no key to that. If you mean a hot tip that will fund your retirement from spare change, no I don’t have that answer either. But if you want to know how to put your assets to work to [...]

Golden Years

By |2014-09-09T09:43:41+00:00November 9th, 2010|Global Market Update|

Could we return to the gold standard? Every few years or we hear this proposed. It’s not hard to see why: experience suggests eventually governments will abuse the right to create money at will. If the Fed’s attempt to boost the economy via “QE2” ends up boosting inflation, we may see this idea taken seriously. How would it work? In its simplest form, currency would be convertible into a given weight of gold, and could be redeemed at the Fed. The global money supply [...]

Shop ‘Till You Drop?

By |2014-01-08T15:48:42+00:00November 7th, 2010|Global Market Update|

This time of year we think about shopping. Christmas presents rank high on our to-do list. But millions of young people are shopping for one of the most expensive items imaginable: an undergraduate education. An undergraduate degree costs a lot. How can people be sure they’re getting their money’s worth? The standard answer of matching interests, cultural setting, and various preferences seems to evade the main question—this is college, after all. Ask the schools hard questions: what is the intellectual climate like, their commitment [...]

You’re Late!

By |2014-09-05T15:04:04+00:00November 5th, 2010|Global Market Update|

I’ve discussed before I don’t think that the municipal bond market is headed for a meltdown. But how do we know? The way to know that a business or government isn’t in trouble is to look at their financial statements. And when there is one big problem when it comes to municipalities: they don’t file their audits on time. When a company borrows money or issues stock, the SEC requires they file their financials 60 to 90 days of year-end. That’s only reasonable. After [...]

Back to the Future?

By |2014-09-05T15:03:32+00:00November 4th, 2010|Global Market Update|

What does the Fed’s decision mean? The Federal Reserve announced that they intend to purchase $600 billion in Treasury Notes over the next 8 months. They expect that this will lower interest rates and encourage banks to lend, consumers to borrow, and homeowners to refinance, helping the economy expand fast enough to bring down unemployment Will it work? In theory, it should. Lower rates encourage consumption, for all the cost to savers. What’s more, adding money to the economy this way should depress the [...]

All Grown Up

By |2014-09-09T09:41:49+00:00November 3rd, 2010|Global Market Update|

Those who can’t do, sue? That’s what I thought when I read that Google is suing the Interior Department. The government agency is taking bids on a $60 million contract to design a web-based email system, and has required that Microsoft applications like Word, Excel, and Powerpoint be integrated into the solution. This was too much for the online giant, so Google filed suit, claiming that the stipulation unfairly restricts competition by excluding Google Apps. I don’t know, it also excludes Wordperfect, Visicalc, and [...]


By |2014-09-09T09:41:21+00:00November 2nd, 2010|Global Market Update|

Did someone from the central casting dream this up? This week we have a presidential election in Brazil, a Congressional mid-term election, a key Federal Reserve meeting, a Bank of England meeting, a European Central Bank meeting, a Bank of Japan meeting, and a key US economic statistic. I almost expect to see Jack Bauer jetting from an electoral crisis to a monetary crisis to a bureaucratic crisis, solving them all with his Baretta! But life doesn’t come with a sound-track and the issues [...]