Apple’s Core

By |2012-05-16T06:29:46+00:00May 16th, 2012|Global Market Update, New Markets|

What’s at the heart of Apple’s success? Many look at Apple and see a business that makes appealing, convenient consumer electronics. (Others see an information Hegemon bent on destroying individual liberty, but that’s another story.) But consumers are notoriously fickle and faddish about their gadgets. How does a gizmo company become the one of the largest corporations in the world in less than a decade, eclipsing oil giants and industrial powerhouses that took centuries to achieve their status? Part of Apple’s success comes from [...]

Structure, Schmucture

By |2017-07-17T12:34:54+00:00May 15th, 2012|Global Market Update, Recession|

Where have all the jobs gone?There’s a cottage industry growing up around the question as to whether current unemployment is cyclical or structural. That is, whether it represents a short-term consumer-based pullback in aggregate demand, or whether it comes from a mismatch between labor skills and the kinds of jobs employers want to fill right now. With over 88 million people not in the labor force, it’s an important question.It’s important because of the policy implications. […]

Swapping Stories

By |2012-05-14T09:12:48+00:00May 14th, 2012|Global Market Update, New Markets|

Boy, talk about history rhyming! When JP Morgan announced that they had lost $2 billion via mismanaged hedges, I wasn’t surprised. Yes, it’s a large number. But JP Morgan has a $2 trillion balance sheet and a $5 trillion swaps book—and they may be ¼ of the credit default market. After news surfaced a month ago of some of their trading positions, losses seemed inevitable, as smaller, more agile trading firms were able to position themselves against the outsized positions taken by the JP [...]

The Death of Investing?

By |2017-07-17T12:34:54+00:00May 11th, 2012|Global Market Update, Investing|

What goes around comes around.Mark Twain famously noted that history doesn’t repeat itself, but it often rhymes. That is, there are broad themes that tend to reoccur, often generationally. Investors often forget or ignore the past, so they have a habit of giving in to their emotions and believing the stories that get peddled by fear-mongers or hope-machines, extrapolating past trends and ignoring the likelihood of regression to the mean.We won’t see another tech bubble again anytime soon: no online grocer is going to [...]

Investing in Yourself

By |2012-05-10T06:47:07+00:00May 10th, 2012|Global Market Update, Investing|

What does it take to invest successfully?An old saying says that I’d rather be lucky than good. In investments, that seems to go without saying. After all, the investment world seems a mystery to most people, with obscure terms like beta and residuals, and advisors sporting strange credentials and letters after their names. Above all floats the specter of total loss, where investors fear to get help because of the risk an advisor may turn out to be like Bernie Madoff, and make off [...]

Stimulus You Can Believe In

By |2012-05-09T06:53:23+00:00May 9th, 2012|Global Market Update, Recession|

Was the stimulus a waste?That’s the question as we approach the “fiscal cliff” of January 1, 2013, when the automatic spending cuts of the deficit compromise and the tax hikes associated with the expiration of George W. Bush’s tax plan kick in. Certainly with 5 million jobs still missing and GDP running at 2%, it’s hard to say that the economy is strong. Proponents of the stimulus say it would have been worse without it; skeptics point to the additional trillions of debt we’re [...]

We’re All What?

By |2012-05-08T06:27:58+00:00May 8th, 2012|Elections, Global Market Update|

Is John Keynes smiling?Across Europe political parties implementing austerity measures are struggling. In France Socialist candidate Francois Hollande was elected to replace the incumbent Nicolas Sarkozy. In Greece the parties that backed the current austerity regime saw losses,. The Euro is falling; but European stocks have been stable. What’s happening?The arrival of a pragmatic socialist in France may not be the disaster that many fear. […]

Where the Jobs Are

By |2014-09-09T16:01:26+00:00May 7th, 2012|Global Market Update|

Where have the jobs gone? The latest employment report is one more in a series: moderate growth from the establishment survey; a falling unemployment rate in the household survey, but a falling labor force, or a falling labor participation rate. Indeed, the labor force participation rate is the lowest it has been since 1981. But the economy is growing. Normally, by this time in a recovery, discouraged workers start coming back into the labor force, and the unemployment rate rises, even as employment grows. [...]

Medifraud

By |2017-07-17T12:34:54+00:00May 3rd, 2012|Global Market Update|

A new take on an old saw: when one person rips you off, he has a problem. When 100 people defraud you, you have a problem. That’s what came to mind when I read about the 107 hucksters, slime, and low-life involved in a $452 million Medicare fraud reported yesterday. The crooks made false billings, billings for drug-addicted homeless people, billings for improper care, and billings for care that never happened. They falsified notes, forged signatures, and when one scam was shut down, they [...]

Debt Matters

By |2017-07-17T12:34:54+00:00May 2nd, 2012|Global Market Update|

Does a nation’s high debt cause slow growth? That’s the operative question as the US, Europe, and Japan face budget challenges. Carmen Reinhart and Ken Rogoff studied fiscal policy in sixty-six countries over eight centuries and determined that highly indebted countries—where the public debt is about equal to the GDP, or higher—grow more slowly than less indebted countries. So strategies to rein in the deficit in the US—currently 7% of GDP—are making the rounds. If we are to avoid the slow-growth trap, the reasoning [...]