Small Futures

By | 2014-09-09T11:21:36+00:00 October 31st, 2012|Global Market Update|

Is small business the future? Both of the major presidential candidates are on the stump extolling the virtues of small business. And it’s true that small businesses create the majority of new jobs in our economy. But actually, it’s young businesses that create jobs. Small businesses that have been small for the past 5 years tend to create jobs at the same rate as big businesses. it’s also true that, over time, small-cap companies outperform large-cap companies. They have better sales growth, better ROE, [...]

Storm Busters!

By | 2014-09-09T11:20:47+00:00 October 30th, 2012|Global Market Update|

Who ya’ gonna’ call? That’s the question lots of us have about Sandy. Sure, we can go to Weather.com or Ready.gov to get storm information, but once the power goes out, it’s not so easy to stream videos or post pictures on Facebook. And with most folks getting their TV via cable or satellite, local news stories are pretty hard to find, too. That leaves us with that old standby, the transistor radio. Surprisingly, none of the government’s websites lists local radio stations or [...]

Stormy Weather

By | 2014-09-09T11:18:48+00:00 October 29th, 2012|Global Market Update|

How does weather affect the economy? As Hurricane Sandy bears down on the East Coast, it’s worth asking how storms impact the way we live. In years past this was a foolish question. After all, in an agricultural society unusual weather has a direct impact on food production. 1816 was the year without a summer in northern New England. Over a foot of snow fell in early June, and there was a killing frost in mid-August. That winter cattle starved for lack of hay, [...]

(P)Reserving the Fed

By | 2014-09-09T11:17:35+00:00 October 26th, 2012|Global Market Update|

Is Fed-bashing a new spectator sport? Criticizing the Fed has been a political trope for years. It’s easy to do: find an economic trend, look at the point when it became visible in the data, then disparage the Fed for not picking up on what was, in retrospect, obvious. If you can find a couple of financial columnists or academics who mentioned the emerging problem at the time, so much the better: then it looks like the Fed was ignoring what was obvious to [...]

Grading the Fed

By | 2014-09-09T11:13:15+00:00 October 25th, 2012|Global Market Update|

Remember the Fed? The Federal Reserve just held a two-day meeting of its open market committee and decided to change almost nothing. Their formal statement contained about half a dozen word changes. Their policy remains as it was: add to the money supply, keep rates at zero, and monitor the economy. It’s been that way for the past four years or so. Yawn. Time was when we waited on the Fed’s pronouncements with bated breath. Fed-watchers would gauge the size of the Chairman’s briefcase [...]

Fiscal Cliffhanger

By | 2014-09-09T11:12:14+00:00 October 24th, 2012|Global Market Update|

Is the Fiscal Cliff the Y2K of 2012? Remember Y2K? Interminable meetings discussing scenario tests, date resets on our desktops, and getting new checks printed, all because some punch-card designers decided to save two digits in the date field on an 80 character punch card 70 years ago! But after the zero-hour came and went, and we didn’t lose power, we didn’t lose our phones, and our bank balances were still there, everyone pretty much stopped worrying. Equities at 30x earnings? No problem! Look [...]

Golden Futures

By | 2014-09-09T11:11:35+00:00 October 23rd, 2012|Global Market Update|

What function does gold serve in the economy? For more than three millennia, gold has served as both a unit of exchange and a store of value in the global economy. The stock of gold is relatively stable. There are about 155 thousand tons of gold in the world, and each year the world’s mines supply some 2600 additional tons of the metal. It’s chemically stable, and surprisingly malleable. It has sometimes been referred to as a currency without a country. But the growth [...]

Hunger Games

By | 2012-10-22T08:56:32+00:00 October 22nd, 2012|Global Market Update|

Hunger Games – Are we running out of food? This seems like a silly question today, but it wasn’t so foolish 30 years ago. Food prices had doubled in the early ‘70s, and many economists thought we were running into the “Limits to Growth,” a doomsday scenario where global scarcity and resource constraints would force the world’s economy into an economic scenario labeled, “overshoot and collapse.” The solution, according to some, was voluntary simplicity, living simply so that others might simply live. […]

The Paradox of Plenty?

By | 2012-10-18T08:48:01+00:00 October 18th, 2012|Global Market Update|

The Paradox of Plenty?  –  Are natural resources a blessing or a curse?The intuitive answer is that they should be a blessing. All things being equal, one would rather live in a country rich in energy, minerals, and other wealth than in a poor country. But if you study the “resource curse” you see that all things are not equal. Countries with lots of energy or mining resources tend to grow more slowly than other countries. Why should this be? […]

Sacked in the Citi

By | 2017-07-17T12:34:45+00:00 October 17th, 2012|Global Market Update|

Sacked in the Citi – What happened at Citigroup?Yesterday, with little fanfare, CEO Vikram Pandit stepped down, effective immediately. Along with Pandit, Chief Operating Officer John Havens also resigned. No explanation was given. Markets were shocked. […]