Rich Dollar / Poor Dollar

By |2017-07-17T12:22:57+00:00May 14th, 2015|Global Market Update|

Has the rally in the dollar run out of steam? Source: Wikipedia The US Dollar has been on a roll. Over the past year the trade weighted dollar has risen 25 percent. The strong dollar has depressed exports, retail sales, industrial production, corporate earnings, and a host of other factors. The combination of tighter money here and aggressive QE in Europe and Japan have raised the dollar’s value significantly, after three years of little change. […]

My Kind of Town?

By |2017-07-17T12:22:57+00:00May 13th, 2015|Global Market Update|

What comes to mind when you think of Chicago? Sears Tower, 1998. Source: Wikipedia Some may think of Al Capone, or Lake Michigan, or the Sears Tower. Others think of their many sports teams: the Bears, the Bulls, the Cubs, the White Sox, the Blackhawks. And there’s the legacy of Chicago’s architecture, with Louis Sullivan and Frank Lloyd Wright. Chicago enjoys a special place in America’s history and culture. […]

Rule, Britannia?

By |2017-07-17T12:22:57+00:00May 12th, 2015|Global Market Update|

Is Great Britain destined for history’s dustbin? Source: Wikipedia On Thursday, David Cameron’s Conservative Party won a surprising electoral victory. But a lot of folks have opined that the Tories’ troubles are just beginning. The rise of the Scottish Nationalist’s up north and Cameron’s pledge to hold a referendum on England’s place in the European Union have many wondering whether Cameron will become the founder of “Little England,” an England cut off from Europe and bereft of Scotland and Wales. […]

Leverage for Me, But Not for Thee …

By |2017-07-17T12:22:57+00:00May 11th, 2015|Global Market Update|

Can levered investments improve returns in a new-normal economy? Source: Janus Capital Group In a recent Investment Outlook, Bond King Bill Gross discusses how the global economy is over-levered, markets are over-priced, and investors are over-optimistic. There’s too much risk for too little reward, and the bull market in both bonds and stocks that began in 1980 must certainly be close to an end. […]

Twinkie Town?

By |2017-07-17T12:22:57+00:00May 8th, 2015|Global Market Update|

It seems like Twinkies really can last forever. Image Source: Wikipedia Three years ago, the iconic brand ran into financial trouble. Sales were down 20% from the year before. The parent company claimed that consumers had migrated to healthier foods. Twinkies just weren’t relevant in the baked-kale / chia-seed era. In November 2012 Hostess wound down operations and sold off its assets. It looked like Twinkies had finally hit their expiration date. […]

UK, U-Vote

By |2017-07-17T12:22:58+00:00May 7th, 2015|Global Market Update|

There’s a joke about the economics of voting. Two economists see each other at the polls. They avoid looking at one another, but one finally blurts out, “I won’t tell if you don’t.” Photo: Mdbeckwith. Source: Wikipedia Economists sometimes talk about the irrationality of voting. Since one vote rarely makes a difference, they claim that rational actors won’t bother to vote. Of course, if everyone acted this way, democracy would break down. So we go to the polls, if only to see if our [...]

The Law of the Apple

By |2017-07-17T12:22:58+00:00May 5th, 2015|Global Market Update|

Is Apple (AAPL) too big to grow? Source: Apple Apple is a $740 billion stock. Its revenues over the past 12 months are equal to the entire New Zealand economy. Over the past 15 years the stock has been what Peter Lynch calls a 100-bagger. All you had to do was predict that they would invent the iPhone, and you’d be rich. […]

Mucking Out

By |2017-07-17T12:22:58+00:00May 4th, 2015|Global Market Update|

Is it time to clean up the banking system? Photo: Douglas Tengdin It’s finally spring. In New England, spring is great for skiing on corn snow and boiling down maple syrup. It’s also time to muck out the paddock and clean up the mess left over from the long winter. During the deep freeze this year it was impossible to shovel out my animals’ enclosure. Apart from the unpleasant weather, frozen muck breaks the tines on my muck rake when I try to scoop [...]

Independently Together

By |2017-07-17T12:22:58+00:00May 1st, 2015|Global Market Update|

How do we avoid “groupthink?” Photo: Paul Mariz. Source: Wikipedia People like to agree with one another. We’re strongly influenced by the group that we’re part of. Back in the 1950s, a researcher had some college students match the length of a line on one card to one of three alternatives on another card. When people worked alone, over 99% of them chose the matching line. But when they were put in a group that pressured them make the wrong choice, over a third [...]