Athletic Madness

By | 2017-07-17T12:34:20+00:00 March 31st, 2014|Global Market Update|

Are college athletes exploited? With the NCAA Basketball tournament reaching the heights of hype and football players from Northwestern University trying to unionize, it’s a reasonable question. After all, the schools make a lot of money off these sports—TV rights, merchandizing, ticket sales—not to mention the cachet that comes from being a national champion. In an era of branding and name-recognition, it pays to be number one. So the question is, should these athletes be paid—or paid more, since they do receive scholarships. First, [...]

Reaching the Top (Part 3)

By | 2014-03-28T09:08:22+00:00 March 28th, 2014|Global Market Update|

How do you achieve your goals? Ed Viesturs didn’t just decide to climb the world’s highest mountains one day and get on a plane for Nepal the next. Scaling these summits took years of preparation. Only a superbly conditioned athlete can climb above 25,000 feet—7,600 meters—without supplemental oxygen. It took time, energy, and lots of planning to reach his goal. It’s like this with many things in life. A runner doesn’t hop from jogging around the block to running a marathon without a clear [...]

Reaching the Top (Part 2)

By | 2017-07-17T12:34:20+00:00 March 26th, 2014|Global Market Update|

“Getting to the top is optional. Getting down is mandatory” That’s the formula Ed Viesturs developed as he pursued his quest to climb all 14 of the world’s 8,000 meter peaks. When he accomplished this in 2005 he was only the 12th person ever to do so. Since then only 19 others have climbed all 14. On a mountain, Ed describes himself as a risk-manager, continually evaluating whether the conditions or circumstances support the next move. Similarly, risk management is an integral part of [...]

Reaching the Top (Part 1)

By | 2014-03-25T09:33:51+00:00 March 25th, 2014|Global Market Update|

Is investing like climbing mountains? I thought about this when I looked at the career of Ed Viesturs, the first American to climb all 14 of the world’s 8000-meter peaks—all without supplemental oxygen. He has sometimes been called a risk-taker, but he bridles at that description. He defines himself as more of a risk manager, continually assessing the conditions and deciding whether to go forward to not. Because the air is so thin and conditions are so extreme where these high peaks jut up [...]

Fed Watching for Fun and Profit (Part 2)

By | 2014-03-24T10:17:31+00:00 March 24th, 2014|Global Market Update|

Can dissent predict the future? Sometimes, when you look at a decision, the most interesting part of the debate isn’t where people agree it’s where they disagree. That’s often the case with legal discussions. When the Supreme Court decides a case, they usually publish two opinions: a majority opinion that explains the ruling, and a dissenting opinion that points out holes in the majority’s argument. Dissenting opinions often contain a key to understanding where the future will lead. In his insightful dissent in the [...]

Fed Watching for Fun and Profit

By | 2014-03-21T09:33:12+00:00 March 21st, 2014|Global Market Update|

In the ‘90s we had dot-coms. In the 00’s we had to connect-the-dots. Now the Fed is issuing dot-plots. Buried in the blizzard of information that the Fed released Wednesday was a dot-plot of all of the Fed officials’ predictions. And while Janet Yellen did a fine job in her first press conference reiterating how future Fed actions are data-dependent, market participants were able to compare what the Fed is thinking now versus what they thought three months ago. The dot-plot places a mark [...]

A GPS, a Whale, and the Financial Crisis

By | 2017-07-17T12:34:20+00:00 March 20th, 2014|Global Market Update|

What does a GPS have to do with the recession? Like many, I use a GPS app on my phone when I drive to a new place. Normally, this is a convenient way to get from A to B—no fussing with maps and obscure directions: “Turn left a half mile after the second railroad crossing where the 7/11 used to be, I think they replaced it with a Benny’s.” But when the GPS malfunctions, or has the wrong map coordinates, it can literally lead [...]

20 March, 2014 10:12

By | 2017-07-17T12:34:20+00:00 March 20th, 2014|Global Market Update|

A GPS, a Whale, and the Financial Crisis What does a GPS have to do with the recession? Like many, I use a GPS app on my phone when I drive to a new place. Normally, this is a convenient way to get from A to B—no fussing with maps and obscure directions: “Turn left a half mile after the second railroad crossing where the 7/11 used to be, I think they replaced it with a Benny’s.” But when the GPS malfunctions, or has [...]

Foxes and Hedgehogs

By | 2014-03-19T10:21:28+00:00 March 19th, 2014|Global Market Update|

“The fox knows many things, but the hedgehog knows one big thing.” The Greek lyric poet Archilocus coined this phrase almost 3000 years ago. Its original context has been lost, but as a principle, it can describe two approaches to life. On the one hand, you have people who pursue many ends—often unrelated and contradictory—eclectic, diffused, omnivorous. On the other are souls who pursue a singular, unitary vision, an all-embracing organizing principle that gives the world coherence. We see this in many walks of [...]

Who Watches The Watchers?

By | 2014-03-18T09:48:09+00:00 March 18th, 2014|Global Market Update|

Are ratings agencies fatally conflicted? During the financial crisis the credit-rating agencies came under heavy fire for giving AAA ratings to subprime conduits that later experienced losses. Calpers and other investors filed lawsuits, alleging that the agencies knew, or should have known, that the bonds they rated were junk. The ratings agencies are supposed to tell investors how creditworthy a borrower is. The three largest agencies—Moody’s, S&P, and Fitch—control 90% of the market. They operate under an issuer-pays approach: the issuer engages one or [...]