Hardening Microsoft?

By |2017-07-17T12:34:38+00:00July 17th, 2013|Global Market Update|

What’s up with Microsoft? A couple weeks ago Steve Ballmer sent The Memo, a periodic ritual at the software giant laying out his vision for the company and outlining a massive organizational restructuring. Entitled “One Microsoft,” Ballmer changes the org chart from looking like GM’s—with dueling divisions, brands, and fiefdoms—to that of Apple’s. There’s a lot to be said about Apple’s structure. Essentially, it’s a bicycle wheel. Everything used to revolve around Steve Jobs, as it now does around Tim Cook. If something goes [...]

Crossing the Line

By |2013-07-16T09:36:44+00:00July 16th, 2013|Global Market Update|

How close? How close can investors come to eliciting inside information from networks of informed insiders without crossing the line into insider information? Or how far away do they need to stay away from the line? In securities law there is a notion of insider trading known as the “mosaic theory.” This doctrine states that if an analyst compiles non-material non-public information and material-public information to derive some special insight, he or she is not guilty of insider trading. But what constitutes non-material information? [...]

State-ing the Obvious?

By |2013-07-15T10:56:50+00:00July 15th, 2013|Global Market Update|

Are states getting a raw deal? A recent study of state pension fund returns finds that they’re paying big money for modest returns. Over the past five years, the average return has been 1 ½ percent per year, while the states have paid fees, on average, of 0.40%, or 40 basis points. That’s hundreds of millions in fees for what appear to be moderate returns. Some states, like Maryland, paid above average fees for below average performance. Other states, like New Jersey, experienced just [...]


By |2013-07-12T09:55:34+00:00July 12th, 2013|Global Market Update|

Are hedge funds the future? With equities hitting record levels and government bond yields still in the cellar, where can investors go to get the returns they need to fund their retirements, pay for college, or just become financially secure? Some say the future is in hedge funds—those lightly regulated investment pools that can go long or short, can use leverage (or not), and that utilize derivatives of various sorts to take all kinds of positions. Sometimes these bets work out fabulously, as when [...]

Smart Cars?

By |2017-07-17T12:34:38+00:00July 11th, 2013|Global Market Update|

Are cars the new smartphone? It doesn’t take an advanced degree to tell that cars are changing. Gone are the days of the flooded carburetor and “tune-up” executed by twisting a distributor cap. The ubiquitous sensor chip is even going away. Cars today are networked, with various parts communicating other parts to make everything work. Wireless connectivity has been creeping into cars since 1996, when GM introduced its OnStar system, used to contact emergency services and also to disable a stolen vehicle. Now cars [...]

The Price of Money

By |2013-07-10T09:48:19+00:00July 10th, 2013|Global Market Update|

Are higher interest rates good or bad? That’s a good question. Since Ben Bernanke’s press conference three weeks ago interest rates have moved sharply higher. Some note that higher interest rates make it more expensive to borrow and conclude that these rates will make it more expensive to borrow money and put the economy at risk. Others note that higher rates result from a stronger economy, and so they should presage good things to come. Which is it? Interest rates can be seen as [...]


By |2013-07-08T10:09:59+00:00July 8th, 2013|Global Market Update|

What’s happening with the economy? Friday’s employment report contained some good news. Not only did the economy create almost 200 thousand jobs last month, but April and May were both revised higher as well, for a total pick-up of some 300 thousand jobs. And the leading elements of the job report were higher as well: temporary jobs went up, hours worked increased, and average hourly earnings were higher. Both the household survey and the establishment report indicate that the job market is getting healthier. [...]

New Brotherhood of Freedom?

By |2017-07-17T12:34:38+00:00July 3rd, 2013|Global Market Update|

What’s going on in Egypt? Two and a half years ago millions of protesters took to the streets of Cairo, Egypt, demanding change. Although there was no formal, legal mechanism to effect that change, they still got it: President Hosni Mubarak’s government fell, and the President was taken into custody. A year ago President Mohammed Morsi was elected, a leader of the Muslim Brotherhood party. Over time, he appears to have enacted policies that favor his political party, and eventually the populace lost patience [...]

Shortening Sail

By |2013-07-01T10:04:24+00:00July 1st, 2013|Global Market Update|

Is this the “big one?” Mortgage rates are up, corporate bonds are yielding more, high-yield debt has spiked, even emerging bond markets have seen large capital outflows. Is this the “big one?” Are bond markets bracing for “bondmageddon,” a Lehman-like moment when everything goes to you-know-where and the markets trade down 30 to 50%? Don’t count on it. Bonds aren’t equities. There’s a reason why they’re less volatile. Investors who hold individual issues can always hold them to maturity. If they do that, they [...]