The Phoenix Arises

By |2014-09-11T14:05:09+00:00February 9th, 2011|Global Market Update|

Can democracy really take root in Egypt? I’ve written before how unlocking the economic potential of some 350 million Arabs would be a good thing. But there’s no deep-seated democratic tradition in Arab culture. Is it realistic to expect one to grow there? The same criticism was leveled at Japan some 50 years ago. Truman’s goal of establishing a liberal democracy in a racist nation that nearly subjugated half the world seemed impossibly idealistic, forcefully transplanting a complex Western ideal into an authoritarian culture—like [...]

Couples Therapy

By |2014-09-11T14:09:04+00:00February 8th, 2011|Global Market Update|

There’s a simple way for couples to improve how their money is managed: listening. It’s been documented that men and women think differently about money. Whether the reason is genetic or cultural, men and women have differing underlying biases. By using your partner’s biases to balance your own, the result should be an investment portfolio that both of you are more comfortable with. What are these tendencies? Men tend to be overconfident, trading more on too little information. They tend to trust their own [...]

What’s Not To Like?

By |2014-09-11T14:02:16+00:00February 7th, 2011|Global Market Update|

What don’t you like about munis? It’s a fair question. I’ve spent so much time defending them that some people might think that I’ve never met a muni that I didn’t like. Not so. It’s true that municipal default and bankruptcy are exceedingly rare. The most common source of default, though, has been small projects funded by special fees. For one thing, their funding source is narrow; for another, the consequences of default are limited. The universe just doesn’t care about an obscure wireless [...]

The Corner Store

By |2017-07-17T12:35:17+00:00February 6th, 2011|Global Market Update|

Is the economy really getting better? It sure doesn’t feel that way. Unemployment remains high nationally, and in some areas it’s really high. Sure New Hampshire is doing better, but everyone seems to know someone that’s been affected by the recession. And lots of people are upside down on their mortgages. When will the bad news end? Surprisingly, help is on its way. A spate of economic indicators are pointing towards better things ahead. For five months now people have been buying more cars. [...]

The Crisis

By |2014-09-12T10:50:52+00:00February 4th, 2011|Global Market Update|

Last week the Financial Crisis Inquiry Commission issued its report. What did we learn? There were a number of non-surprises. It was no surprise that the commissioners disagreed—along party lines. It was no surprise that it had no plan to deal with Freddy and Fannie, the two biggest fiscal black holes. It’s no surprise that the new Congress is discussing investigating the investigators. What is a surprise is that they didn’t find a scapegoat. The Commission concluded that the housing bubble’s collapse caused hundreds [...]

Pump to the Future

By |2014-09-12T10:50:59+00:00February 3rd, 2011|Global Market Update|

Oil appears on a roll. How high can it go? Over the past four months oil prices have rallied from $75 per barrel to about $90. Prices are headed higher now, linked to concerns about the Middle East and the Suez Canal. I think that both the US and Egypt are unlikely to repeat the errors of the ‘70s: the US is unlikely to alienate tens of millions of Egyptians; Egypt is unlikely to cut off its nose to spite its face and close [...]

The Wealth of Nations

By |2014-09-11T13:58:36+00:00February 2nd, 2011|Global Market Update|

Why are some nations wealthy? Some countries get rich and stay rich, while others struggle. Nobel laureate Robert Solow analyzed this question and came up with three critical ingredients: capital, technology, and well-trained workers. Not raw materials—look at Japan. Not access to a major port—look at Switzerland. And not “culture”—there have been wealthy countries from Europe, Asia, Africa, and America. The key to Solow’s three factors is social institutions: the rule of law, protection of intellectual property, and education. The rule of law is [...]