Enclothing Our Thoughts

By | 2014-09-09T16:26:39+00:00 April 30th, 2012|Global Market Update|

Do the clothes make the man (or woman)? A recent study seems to support this idea. It has long been known that what goes on with your body affects how your mind works: If you force yourself to smile, you’ll understand jokes more easily; if you tense your muscles, you’re better able to resist tempting food or tackle a difficult task. Having a mind-body link is one thing; but this study seems to indicate there is a mind-clothes link. The researchers tested the effect [...]

Yielding Answers

By | 2014-09-09T16:27:22+00:00 April 30th, 2012|Global Market Update|

What can investors do about low interest rates? It’s no surprise that interest rates are at record low levels. Over the past decade, 10-year government bonds in the US, Germany, and England have fallen from 6% to 2%. The drop in yields has provided great opportunities for capital appreciation from long-term bonds, but investors now are faced with a dilemma: continue to invest in long-term bonds and run the risk of a price decline, or go with short-term instruments that don’t even earn the [...]

Swapping Places

By | 2014-09-09T16:26:05+00:00 April 27th, 2012|Global Market Update|

What can we learn from the Fed’s swap lines? Back in November the Fed made it easier for foreign central banks to borrow dollars. The European financial crisis was intensifying, and the Federal Reserve wanted to be sure that Societe Generale and Deutsche Bank didn’t fail because they ran out of dollars. But the Fed wasn’t going to lend to them—that was the European Central Bank’s job. So they expanded their swap lines with the world’s major central banks to allow them to borrow [...]

It Doesn’t Work

By | 2014-09-09T16:25:45+00:00 April 26th, 2012|Global Market Update|

Buried in the Social Security report is a train-wreck the next President will face. When Social Security issued its annual report this week, most people focused on the retirement fund’s solvency. It reports that it will run out of money by 2033. Actually, that projection is optimistic, but that’s another story. But there’s another part of Social Security facing more immediate challenges: the disability fund. This program offers essential support for people who have no chance of holding another job. Currently, 16 million adults [...]

Lie Detectors Needed!

By | 2014-09-09T16:20:20+00:00 April 25th, 2012|Global Market Update|

Looks like Wal-Mart could have used one of those lie detectors. Ten years ago Wal-Mart was looking to expand in Mexico and ran into some bureaucratic trouble. Opening new stores was difficult. Zoning permits, impact statements, building permits, traffic studies—they were all taking too long. So they hired local lawyers to “fix” things, which in the developing world means that probably graft was involved. Soon, a familiar story ensued: an employee involved in the expansion was passed over for a promotion, so he went [...]

Lie Detectors?

By | 2014-09-09T16:19:53+00:00 April 24th, 2012|Global Market Update|

Do poachers make the best game wardens? An old saw states that if you want to protect against break-ins, get advice from a burglar. If you want to improve cyber-security, hire a hacker. But is this always a good idea? Do the skills that make for a good criminal make for a good cop? At least one study has shown that deception follows this model. People who lie, and perhaps lie easily, are also more readily able to detect deception in others. The ability [...]

US Scareways

By | 2014-09-09T16:18:38+00:00 April 23rd, 2012|Global Market Update|

And old joke: what do you get when you cross an elephant with a rhino? Elephino! That’s what I thought when I read about the proposed merger of American Airlines with US Air. American is in bankruptcy; US Air is a scrappy legacy carrier. After Delta merged with Northwest and Continental and United united, rumors were widespread that American and US Air would get together, but they could never agree to terms. Before, American would be the buyer. Now it’s US Air. But the [...]

Spanish Fleas

By | 2014-09-09T16:17:14+00:00 April 20th, 2012|Global Market Update|

The pain in Spain stays mainly in the banks. Okay, it doesn’t rhyme. But the point is that the crisis in Spain isn’t one of sovereign excess or overly-generous pensions. It’s about the banking system. During the boom, property prices soared as wealthy Britons and Germans bought vacation condos on the Costa del Sol. But when prices turned south the banks got hammered. Now over 8% of Spanish banks’ loans are nonperforming, and the assumption is that the country will have to come in [...]

Alma Matters

By | 2017-07-17T12:34:54+00:00 April 19th, 2012|Global Market Update, New Markets|

Why are US colleges and universities so successful?In a recent study of global universities, institutions from the United States occupied 17 of the top 20 spots, based on academic reputation, graduate accomplishments, and academic journal citations. While the US has a large and relatively wealthy population capable of supporting its universities, this kind of dominance is striking. What can explain it?One possible reason is alumni involvement, control, and generosity. […]

Here (Doesn’t) Come the Sun

By | 2014-09-12T10:30:10+00:00 April 18th, 2012|Global Market Update|

Sometimes good intentions just aren’t enough. First Solar makes thin-film solar panels. The Tempe, Arizona company has manufacturing plants around the world. Before the credit crunch when subsidies were plentiful and new housing construction was booming, the company was riding high. The price-earnings ratio was over 100 and earnings were doubling year-by-year. Even after the bloom came off the rose and both earnings and the share price fell, the company still enjoyed a PE of 20 and earnings, while not growing, were stable. Not [...]