Confidence and Cons

By | 2017-07-17T12:35:16+00:00 March 17th, 2011|Global Market Update|

Confidence is good. It helps us get up in the morning. We can confidently expect the sun to rise and roosters to crow. But when it comes to investing, confidence is your enemy. It leads us to do stupid things. It encourages folks to invest with their hearts and not their heads. And that encourages crooks to try to scam your money. It’s not just Nigerian wire-transfer or bogus “letter-of-credit” scams. It can be private company transactions, penny-stock offers, and even seemingly guaranteed annuities—an [...]

Family(?) Finance

By | 2017-07-17T12:35:16+00:00 March 16th, 2011|Global Market Update|

When it comes to finance, a family is not a company is not a country. But you wouldn’t know it to listen to our politicians. Some politicians think that governments should be like companies. After all, companies have a bottom line, are accountable to investors, and have to be efficient or they’ll be punished in the marketplace. But governments do things that companies don’t--like national defense, or police and fire services. Also, companies can declare bankruptcy and go into liquidation. Countries can’t do that [...]

Driving Our Savings

By | 2017-07-17T12:35:16+00:00 March 15th, 2011|Global Market Update|

As an investment manager, people often ask me basic money questions. What they really need to do is talk to a driving instructor. Money questions are often really life questions. Yes, there are technical issues with annuities and corporate finance; faithful followers of these comments probably know more about municipal budgets than the average MBA. But life is a complex picture. Money is just a part of that picture. There are certain truths in our lives that money illustrates. The fact that it is [...]

The Shape of Things to Come?

By | 2014-09-11T13:42:38+00:00 March 14th, 2011|Global Market Update|

If this is the future of municipal finance, the future doesn’t look so bad. Those concerned about muni defaults have pointed to Vallejo, California as a harbinger of things to come. The mid-sized city has a population of 115 thousand and a median household income of about $60 thousand—20% above the national average. Nonetheless they promised more than they could afford to their workers, and in May of 2008 the leaders filed for Chapter 9 bankruptcy. Since then retail investors have lost—nothing? Owners of [...]

Chinese Checkers

By | 2014-09-12T10:50:18+00:00 March 11th, 2011|Global Market Update|

China’s economy is changing. What does this mean? The Chinese economy has been—if not the locomotive—the coal-car of the freight train that is the global economy. China is in the process of rebalancing its economy, putting less emphasis on exports and more emphasis on domestic consumption. But to do this they need to strengthen their social institutions, encouraging their people to save less and spend more. Such an approach is risky. If growth slows suddenly, it would be highly destabilizing. But it’s not like [...]

Reserving the Future

By | 2014-09-11T13:40:50+00:00 March 10th, 2011|Global Market Update|

What is the cost of the Dollar’s prominence? That’s kind of a funny question. Most commentators assume that since the Dollar is the world’s reserve currency, it’s kind of a free ride for all those free-spending Americans. After all, if companies and nations didn’t have to borrow and invest in Dollars, wouldn’t we all be paying more for our mortgages? Well, yes and no. Yes, the Dollar’s reserve status means interest rates are lower, but there really isn’t a free lunch out there. Because [...]

The Dog That Didn’t Bark

By | 2014-09-11T13:39:17+00:00 March 8th, 2011|Global Market Update|

In a famous exchange between Sherlock Holmes and Inspector Gregory of Scotland Yard, Holmes comments that the most curious aspect of a burglary was the behavior of the dog in the night-time. “The dog did nothing in the night,” remarked the inspector. “That was the curious incident,” answered Holmes. In normal circumstances, a watch that senses that something is wrong will bark. In this case, he didn’t, indicating that something else was going on. When we look at global markets today, the dog that [...]

Planning for Growth

By | 2014-09-11T13:38:37+00:00 March 7th, 2011|Global Market Update|

It’s miserable outside. So why am I thinking about the garden? Outside we’re getting a true nor’easter, to be followed by sub-zero temperatures. Welcome to March in New Hampshire. I’ve been enjoying this time of year in Northern New England for 30 years now, off and on, and while it doesn’t make me an old-timer, it does give me some perspective. And right now my thoughts turn to—gardening. Ordering seeds, getting out the grow-lights, and getting my broccoli, tomato, and pepper plants started. Because [...]