Rotten Fruit?

By | 2013-01-31T11:25:20+00:00 January 31st, 2013|Global Market Update|

Has Apple’s shine come off? Shares of Apple tumbled after their earnings release. While they met sales and earnings expectations, their margins narrowed, and they didn’t so much trim their guidance on future earnings so much as “shade” it—telling analysts that management’s expectations for future earnings were realistic rather than conservative: code for “We’ll beat this, but not by a lot.” It was the profit margin that had investors worried, though. Their gross margin declined to 39% from 45% a year ago. The concern [...]

The Supper Club

By | 2013-01-30T09:30:04+00:00 January 30th, 2013|Global Market Update|

The Federal budget deficit isn’t hard to understand. Imagine you and your spouse decide go out to dinner at a restaurant with another couple; for convenience sake agree to split the bill in half. If the other couple is having pasta and drinking tap-water, you’d be jerk to order the filet mignon and a bottle of expensive wine, knowing that the other couple is paying part of your bill. Do this more than once, and your financial arrangements would change. Now imagine a neighborhood [...]

Trade On, Trade Off

By | 2013-01-29T05:05:33+00:00 January 29th, 2013|Global Market Update|

Can trade be improved? There are reports out of Davos—the generally worthless confab of glitterati and celebrity wannabees—that the US and Europe are close to a trade deal. UK Prime Minister Gordon Brown and Germany’s Chancellor Angela Merkel were among leaders pleading for lower tariffs and regulations. US Trade Representative Ron Kirk also got into the act, but noted that any deal would have to pass muster with US farmers and other interested parties. Any deal would help. It’s estimated that existing trade barriers [...]

The Case For Japan?

By | 2013-01-28T11:25:30+00:00 January 28th, 2013|Global Market Update|

Is the Japanese market coming back? For over 20 years the Japanese stock market has been in a funk. After topping out the last day of 1989 the market value of the Nikkei average fell over 80%. A thousand hearts have been broken—and billions of dollars lost—betting on a comeback for the world’s third largest economy. But the new Prime Minister Shinzo Abe recently announced a 10 trillion yen stimulus package—the equivalent of a $300 billion program over here. Their stock market has rallied [...]

The End of Affluence?

By | 2017-07-17T12:34:43+00:00 January 25th, 2013|Global Market Update|

Is growth over? Recently Robert J. Gordon, a professor at Northwestern University, created a stir by asking whether the remarkable growth in living standards that the world has enjoyed from 1750 until the present is slowing to a crawl. He argues that the world—and the US in particular—is facing long-term economic headwinds: demographics, education, inequality, globalization, energy/environment, and an overhang of consumer and government debt. To some extent these headwinds have always been with us. We’ve been an aging society ever since public health [...]

The Clash

By | 2017-07-17T12:34:43+00:00 January 24th, 2013|Global Market Update|

Should they stay or should they go? That’s the question Great Britain’s Prime Minister David Cameron wants UK voters to decide. In a speech originally slated to be given in Amsterdam last week, Cameron proposed an in-or-out referendum to be held after the next general election in the UK and after he negotiates the return of some powers from Brussels to London, such as determining holidays or setting limits on the work week. He spoke at Bloomberg LP’s London office—a remarkable place from which [...]

Rooting for the Home Team

By | 2013-01-23T10:34:28+00:00 January 23rd, 2013|Global Market Update|

It looks like the Kings are headed to Seattle. Hedge-fund billionaire Steve Hansen and Microsoft CEO Steve Ballmer have teamed up to purchase a majority stake in the Sacramento Kings, the NBA franchise that moved to Sacramento from Kansas City in the ‘80s. The deal values the franchise at $525 million; it’s widely expected that the new owners will apply for permission to move the team to Seattle. Seattle has been without an NBA franchise since the SuperSonics moved to Oklahoma City in 2008. [...]

Lies, Liars, and Lance

By | 2013-01-22T13:14:19+00:00 January 22nd, 2013|Global Market Update|

Why do people lie? Most people like to think of themselves as basically honest. When they look at themselves in the mirror, they want the respect the man or woman looking back at them. So we all tend to think of ourselves as nicer than average, better-looking than average, and more truthful than average. Only it’s not that way. Several recent studies show that if people can cheat and get away with it—just a little bit—they tend to do so. Also, if it looks [...]

After Chavez?

By | 2013-01-18T10:57:50+00:00 January 18th, 2013|Global Market Update|

What happens after Hugo Chavez? Hugo Chavez had an operation for cancer in December and hasn’t been seen in public since. Now, the country is in political limbo. The 58-year old has been President of Venezuela for the past 15 years, where he has been both highly popular and highly divisive. Constitutional reform, land reform, nationalization of key industries—all were part of Chavez’s policies. At times Chavez has been autocratic and vicious. But the source of his popularity is simple: of the roughly $800 [...]

The Circle Game

By | 2017-07-17T12:34:43+00:00 January 16th, 2013|Global Market Update|

What can Joni Mitchell teach about investing? 40 years ago Joni Mitchell wrote “The Circle Game,” a lyrical song about a young man’s gradual coming of age. The most memorable part is the refrain, which goes: “We can’t return, we can only look behind from where we came / and go round and round and round in a circle game.” Circles and cycles are part of investing. The economy cycles through growth and recession every 4 to 8 years; businesses magnify any economic decline [...]