Gut Check?

By | 2017-07-17T12:22:22+00:00 October 30th, 2015|Global Market Update|

Should investors “trust their gut”? Luke Skywalker: “I have a bad feeling about this.” Source: Wikipedia We make dozens of decisions every day. Most are inconsequential--“Should I wear black or brown socks? Should I have toast or grapefruit for breakfast?” Sometimes they’re critical, like who to hire for a new position. To help us make decisions, we use informal rules, or heuristics—like drawing a picture, or solving an easier problem first. Often, we draw on experience. If I see a set of flashing blue [...]

The End of Ownership

By | 2017-07-17T12:22:22+00:00 October 29th, 2015|Global Market Update|

What drives economic growth? 250 years ago, wealth came from the soil. Economies were driven by agriculture. In The Wealth of Nations when Adam Smith explains the advantages of free trade he illustrates the point with an agricultural example, noting it’s better for everyone to trade Scottish wool for Portuguese wine, than for Scots to use greenhouses and mirrors to make their own wine. Source: Wikipedia A century later wealth came from industry. Railroads crossed the country, connecting mines and mills and markets. Titans [...]

The Undersea World of Negative Interest Rates

By | 2017-07-17T12:22:22+00:00 October 28th, 2015|Global Market Update|

What happens when rates go under water? Source: NOAA Growing up, one of my favorite TV shows was “The Undersea World of Jacques Cousteau.” For an hour my family and I would sit in rapt attention, fascinated by the images of life in a coral reef, or under the polar ice cap, or even in a beaver pond. The series gave us a window into a strange, different world, where normal rules of gravity and body mass don’t apply—or, rather, apply in totally different [...]

Let There Be Markets

By | 2017-07-17T12:22:22+00:00 October 27th, 2015|Global Market Update|

“Let There Be Markets” Is there a “unified market theory”? Source: Wikipedia In the late 1800s, James Clerk Maxwell sought to understand how electric and magnetic fields interact. He formulated the Maxwell Equations to explain them. Ever since then, physicists have sought a unified theory to tie all the forces in the universe together. Einstein tried—and failed--to connect electro-magnetism with gravity. But other forces—the nuclear weak force, the sub-nuclear strong force, and light—have been joined. But there’s no way to pull everything together. There [...]

Workforce Worries

By | 2017-07-17T12:22:23+00:00 October 26th, 2015|Global Market Update|

Where have all the workers gone? Photo: Doug Tengdin Ever since the late ‘90s the labor force participation rate has been falling. There are now over 92 million adult Americans who aren’t working and aren’t looking for work. On its face, that’s a shocking number—almost a third of the population. And 20 million of these folks are in their prime working years. Where did they all come from? And what are they doing? Source: St. Louis Fed Actually, it’s not that big a mystery. [...]

Buy and Hold?

By | 2017-07-17T12:22:23+00:00 October 23rd, 2015|Global Market Update|

What’s going on with consumers? Photo: Tim Gouw. Source: Picography Personal consumption is incredibly important. We’re constantly told that consumers make up more than 2/3rds of our economy, although that probably overstates the case. Medical expenses, for example, are considered part of consumer demand, even though the government pays for about half of our health care. Still, it’s important to understand what consumers are doing. The stock market almost never suffers a significant decline except during a recession, and it’s hard to have a [...]

Making Dragons Grow

By | 2017-07-17T12:22:23+00:00 October 22nd, 2015|Global Market Update|

Source: Wikipedia Do you believe in dragons? That’s the question in a children’s book I used to read with my kids. A young boy finds a dragon and brings it home. His mother says, “There’s no such thing as a dragon.” As long as she denies that it’s real, the dragon gets bigger and bigger, eventually carrying the house on its back. Finally, when she asks what the dragon is doing with their home, it shrinks back to a manageable size. “He just wanted [...]

Autonomous Autos?

By | 2017-07-17T12:22:23+00:00 October 21st, 2015|Global Market Update|

Are self-driving cars in our future? Photo: Steve Jurvetson. Source: Wikipedia I sure seems like it. Self-driving cars have been in the news. Honda, Toyota, and Nissan all recently announced that they plan to sell cars with automated highway driving functions by the year 2020--the year of the Tokyo Olympics. Traditional automakers are trying to get ahead of tech firms like Google, which has been testing a prototype. There are also reports that Apple is studying the technology. Inventors have been experimenting with autonomous [...]

Above Average Investing

By | 2017-07-17T12:22:24+00:00 October 20th, 2015|Global Market Update|

Above Average Investing Photo: Jim Machley. Source: Mountain Graphics. Used by permission “Raise your hand if you’re an above-average driver.” Ask that question in any group and see how many hands go up. Usually it’s way more than half. That’s because we’re pretty overconfident. We think we know more than we do, and we think that we’re better than we are. This isn’t because we’re naturally arrogant. It’s because the folks who lack a true expert’s abilities simply can’t discern what makes someone really [...]

“Plays Well With Others …”

By | 2017-07-17T12:22:24+00:00 October 19th, 2015|Global Market Update|

What jobs are growing today? Photo: Iris Hamelmann. Source: Pixabay Increasingly, it’s jobs that combine math and social skills. An economist interested in education and its long-term effects looked at jobs that have been growing or shrinking as a share of the economy since 1980. This is an interesting question. More and more occupations are being automated, even high-skill, quantitative occupations. Learning math and computer science, it seems, is not enough. Increasingly, employers are looking for teamwork, cooperation, and communication skills. And work that [...]