Foreign Exchanges

By | 2017-07-17T12:21:28+00:00 February 28th, 2017|Global Market Update|

How much is a dollar worth? Photo: Katrina Tuliao. Source: Wikipedia One of the most vexing problems in economics is accounting for exchange rates. In theory, currency exchange rates should harmonize the value of goods and services across countries. That is, foreign exchange rates should rationalize global trade and investment. But the volume of foreign exchange transactions dwarfs that of global trade. Annual currency transactions equal almost 50 times what is necessary for international trade and direct investment. The exchange rate markets are driven [...]

Imports, Exports, and Economic Identities

By | 2017-07-17T12:21:28+00:00 February 23rd, 2017|Global Market Update|

Do imports reduce the size of our economy? Source: Econstories It’s not as simple as you think. Yes, C+I+G+X-M = Y. Consumer spending plus business Investment plus Government spending plus eXports minus iMports equals the total economy. On its face, if you reduce what you’re subtracting, the sum total should be bigger, right? It’s a little more subtle than that, though. It’s unclear which comes first, the size of the inputs or the size of the economy. Just because an equation describes something doesn’t [...]

(Price) War and Peace

By | 2017-07-17T12:21:28+00:00 February 22nd, 2017|Global Market Update|

Is a price war coming to our mobile phone networks? Photo: Linzy. Source: Morguefile Verizon recently followed its rivals in offering an unlimited data plan. They’ve long had the broadest network, but they’ve been losing revenues by 1% per year for the past several years. By rolling out unlimited data priced right around what AT&T and T-Mobil offer, Verizon hopes to recapture some of the market share that they recently lost. I remember gas price wars in the mid-‘70s. There would be gas stations on [...]

A Regulatory Pendulum

By | 2017-07-17T12:21:28+00:00 February 21st, 2017|Global Market Update|

How much regulation do we need? Photo: Arnaud Clerget. Source: Wikipedia After the financial crisis, Congress enacted new regulations on the financial system. The concern was that big banks had gotten us into an awful mess through their reckless lending, so we needed to put new rules in place to make sure they never did that again. Dodd-Frank has been in effect for over six years now, and it’s reasonable to ask if anything has changed. The logic behind most regulation is simple: our [...]

Timeless Investing Truths

By | 2017-07-17T12:21:28+00:00 February 17th, 2017|Global Market Update|

Why is investing so rewarding? Photo: Victor Hanacek. Source: Picjumbo Investing is fascinating. It’s not just the financial returns, significant as those may be. But investing is valuable in its own right. The profession is intellectually demanding, the competition is consistently stimulating, and the relationships with clients and colleagues are priceless. Here are some timeless truths about investing that have impressed me over the three decades I’ve been investing and the ten years I’ve been writing about it. First, be humble. You don’t know [...]

Golden Delicious

By | 2017-07-17T12:21:28+00:00 February 16th, 2017|Global Market Update|

Golden Delicious Is Apple the greatest cash machine in history? Photo: Leeroy Source: Life of Pix Apple recently reported its 2016 financial performance. Last year the company sold $215 billion worth of products and earned – after expenses, amortization, and taxes – over $45 billion. By contrast, conglomerate GE sold $120 billion and earned $10 billion. Smaller companies may have larger margins, but nothing has ever come close to Apple’s scale. The company has amassed a cash reserve of $250 billion. Enough, if they [...]

“Just So” Snowflakes

By | 2017-07-17T12:21:29+00:00 February 15th, 2017|Global Market Update|

Who’s in charge? Wilson Bently, “Studies Among Snow Crystals.” Source: NOAA That’s what we often ask about all kinds of complex systems: traffic, language, markets. It often turns out that no one is in charge, that order emerges from the various parts of the system. If you look at any particular automobile, you can’t predict that Route 128 outside of Boston will be bumper-to-bumper at 8:00 am on a snowy Tuesday morning. But if you get a bunch of cars together, work schedules, commuting [...]

Luxury Goods

By | 2017-07-17T12:21:29+00:00 February 14th, 2017|Global Market Update|

Is the market expensive now? Superyacht “Eclipse.” Photo: Moshi Anahory. Source: Wikipedia The stock market has been on a run. Since October of this year the stock market has hit a succession of new highs. A lot of folks look at this market and say that that the market is pricey. When you divide the market’s valuation by the last 12 months’ worth of earnings, the aggregate price-earnings ratio – currently 23 times earnings – is higher right now than it has been 87% [...]

Snow Days?

By | 2017-07-17T12:21:29+00:00 February 13th, 2017|Uncategorized|

How do storms impact the markets? Source: NOAA We seem to be in a storm cycle. We just had a couple nor’easters, and it looks like more snow is on the way. At times like these, people wonder just how much weather can affect the economy. Last year was a great case-study. For the previous several years we’d had heavy weather disrupt the first quarter’s economic growth. Last year we had a mild winter, along with low energy prices. Economists were curious whether lower [...]

Cyber (In)Security

By | 2017-07-17T12:21:29+00:00 February 10th, 2017|Global Market Update|

How secure are our computer systems? Photo: Kerstin Riemer. Source: Pixabay Computer security is essential to everyday life. There are dark places and dark minds out there, who want to hack into our computers and devices and steal or corrupt our information. There’s viruses, malware, bots, and tracking cookies can compromise our personal and professional systems. These hackers are intelligent and motivated. What can we do protect ourselves? For most of us, cyber-security begins with a user name and password. Behind that mundane entry-point [...]