A Phony Economy

By |2019-02-20T09:47:27-04:00September 14th, 2012|Global Market Update|

A Phony Economy – Will the iPhone help the economy? I’m not talking about the improved speed and screen size. That’s part of a general trend in cell phones that has been going on for years. Mobile computing is part of a technological cycle that allows us to work—and consume—more efficiently. […]

The Humility of the Courts

By |2014-09-09T11:28:11-04:00September 13th, 2012|Global Market Update|

The German Constitutional Court weighed in on Tuesday. What does it mean? By upholding the law that commits Germany to the European rescue fund, the German court removed the last barrier to the fiscal pact. German taxpayers are now on the line for up to 190 billion Euros. For a country of 82 million people, that’s a lot of money. It’s much bigger, proportionally, than the $700 billion TARP fund the Bush administration put in place in 2008. The ESM will now be able [...]

Labor’s Leaders

By |2017-07-17T12:34:46-04:00September 12th, 2012|Global Market Update|

What’s up with Chicago? Some people look at the Chicago strike and see the echoes of a labor movement that is regaining some traction. Others see push-back after five years of public-sector concessions due to the recession and its aftermath. But I see evidence of global competition. To me, the Chicago teachers’ strike is an example of what we haven’t seen for a while: labor unrest. Strikes have been rare recently, especially in contrast to the ‘60s and ‘70s, when workers frequently struck, demanding [...]

Sail, Ho!

By |2014-09-09T11:26:44-04:00September 11th, 2012|Global Market Update|

What is QE3? No, it’s not a luxury-liner. QE3 is shorthand for quantitative easing, an unconventional approach to monetary policy that the Fed is using to influence the economy. They implement this by buying bonds from commercial banks in order to add to the money supply. Usually, the Fed directly targets interest rates; but with short-term rates at zero, they have to focus on the money supply instead It’s called QE3 because this would be the third round of reserve addition for the Fed [...]

Get Tough

By |2017-07-17T12:34:46-04:00September 9th, 2012|Global Market Update|

Is intelligence destiny? That’s the logic behind the “rug rat race,” a comical contest that pits parent against parent vying to get their children into the best preschools, the most competitive grammar schools, and selective traveling sports teams, ballet classes, karate dojos, and music lessons. A pair of economists from the University of California, San Diego has documented the increased time parents now spend on ways to stimulate their pre-schoolers’ early academic achievement. They attribute this trend to increased competition in college admissions. After [...]

Of Bazookas, Bailouts, and Bubbles

By |2014-09-09T11:24:56-04:00September 7th, 2012|Global Market Update|

They can’t say he didn’t warn them. In July European Central Bank Chairman Mario Draghi said that he would do “whatever it takes” to save the Euro. He was backed up—and not slapped down—by German Chancellor Angela Merkel and French President François Hollande. Since then the European debt markets have been largely constructive: the yield on Spanish 10-year government bonds declined from a high of 7.6% to 6.3% in late August. But in the run-up to the ECB meeting this month, the markets were [...]

Buyback Backlash

By |2014-09-09T11:24:23-04:00September 6th, 2012|Global Market Update|

What’s happened to Dell? From a business perspective, the answer is easy. They never really made the transition from making desktop computers to laptops, much less tablets. The business model built out of Michael Dell’s dorm room which consisted of assembling boxes with custom components didn’t keep up with the times. So the stock has fallen 80% from its high of $50 / share in March of 2000 to its current price of $10 per share today. But what happened to all the money? [...]

License to Steal

By |2014-09-09T11:23:26-04:00September 4th, 2012|Global Market Update|

A new form of financing is coming to the financial markets: crowdsourcing. Technically, crowdsourcing has to do with the way work gets done. When lots of people collaborate on small-to-medium sized tasks, that’s crowdsourcing. Wikipedia is an example of crowdsourcing: there’s no single editorial vision, and millions of authors contribute through thousands of editors to create the world’s largest encyclopedia. But when crowdsourcing meets finance, you get crowdfunding. And that’s where it gets interesting. Crowdfunding is a way to fund a startup company, usually [...]