Collective Losses

By | 2017-09-29T07:16:35+00:00 September 29th, 2017|Global Market Update|

Are people just selfish? Soviet propaganda poster from the 1930s. Source: Eurasianet That’s the question I asked when looking back at the some of the big collectivization movements in the 20th century. After the Communist Revolution in Russia, the central government set food prices too low. Peasants in the countryside chose to consume their produce rather than sell it, and there were food shortages in the cities. The government’s response was to collectivize the farms – giving farmers a small share of a larger, [...]

Setting a Higher Standard

By | 2017-09-28T05:52:44+00:00 September 28th, 2017|Global Market Update|

Setting a Higher Standard How can we raise the bar? Photo: Doug Tengdin Cheaters cheat. That’s the lesson from Wells Fargo’s fraudulent accounts, the NFL’s “Deflate-gate,” VW’s emissions scandal, the fraudulent mortgages at the heart of the Financial Crisis, and a whole host of other scandals. In the early ‘90s GM had a special chip in its Cadillacs that shut off their emissions controls when the air conditioner was on. Since we don’t usually run the a/c when getting our cars tested, the got [...]

Allocations Aweigh

By | 2017-09-27T07:10:24+00:00 September 27th, 2017|Global Market Update|

What’s the right asset allocation? Public Domain. Source: Wikipedia In simple terms, asset allocation is the process of deciding where to invest your money. Not who to have manage it – like Vanguard or an advisor – but what to have your money invested in: stocks, bonds, real estate, bank deposits, commodities. Your asset depends on a couple of basic questions: what do you need the money for, when will you need it, what other resources you have, and other specific issues, like your [...]

In Europe We Trust?

By | 2017-09-22T07:20:40+00:00 September 22nd, 2017|Global Market Update|

Why didn’t Europe fall apart? Horace Vernet, “The Battle of the Barricades.” Public Domain. Source: Wikipedia In 1848, revolution swept across Europe. Governments fell in Italy, France, Germany, Denmark, Hungary, Poland, and elsewhere. In all, over 50 countries were affected. The uprisings were led by shaky ad hoc coalitions of reformers, intellectuals, and workers, which didn’t hold together for very long. They were often violently put down, but resulted in lasting social changes, even if the political order was only temporarily overturned. This history [...]

Northern Light

By | 2017-09-21T06:13:49+00:00 September 21st, 2017|Global Market Update|

Do we still live in a material world? Photo: Brocken Inaglory. Source: Wikipedia Not so much. Think about how we buy stuff: Americans are famous for “retail therapy.” When the going gets tough, the tough go shopping. That’s why we have so many malls. Only, with Amazon, we don’t need to go to the mall. There’s no need to schlep to the store: retail therapy is just a click away. Or think about lawyers: law firms used to need 1200 square feet of storage [...]

The End of the Exchange

By | 2017-09-20T06:21:00+00:00 September 20th, 2017|Global Market Update|

Are open exchanges over? Public Domain. Source: Wikipedia In Japan, around 1700, producers and consumers of rice decided they needed a place where they could exchange promises to buy or sell that year’s harvest. At the time, samurai were paid in rice, and they needed to know how much they were really being paid. This became the world’s first futures exchange, and it helped Japan’s economy grow, as their currency shifted from rice to coins to paper money. Chicago established futures exchanges in 1864 [...]

The Zip-Line Network

By | 2017-09-19T07:29:09+00:00 September 19th, 2017|Global Market Update|

What good is Facebook? Photo: Anthony7051. Source: Wikipedia Facebook is over 10 years old and claims more than 2 billion active users, posting pictures and updates about their activities and interests. It was originally based on a student directory, known as a facebook, because it combined personal photos with basic information for new students at college. Now people use it to connect with friends and family over time and distance. We love sharing our Facebook updates! But sharing got a New Jersey man in [...]

No Shirt, No Shoes, No SSN

By | 2017-09-18T08:15:38+00:00 September 18th, 2017|Global Market Update|

No Shirt, No Shoes, No SSN? Why do we have Social Security Numbers? Source: Social Security Administration Back in the 1930s, the government began a massive undertaking: issuing over 30 million Social Security numbers to American workers. Under the Social Security Act, the Social Security Administration had to track earnings accurately to administer benefits, and they couldn’t just use name and address. The Fred Smiths of New York City had so many identification problems that they formed their own company, Fred Smith, Inc., to [...]

Expectations, Hexpectations

By | 2017-09-15T07:22:16+00:00 September 15th, 2017|Global Market Update|

What can we expect from the markets? Photo: H Hatch. Source: Pixabay When we’re making plans, it’s important to have appropriate expectations, especially when it comes to our finances. Having a long-term outlook is crucial. People put their money to work for lots of reasons: saving for retirement or college, to create a legacy, or to generate income for current expenses. Whatever our goals are, we can prepare better if we have appropriate expectations. So what can we expect from the markets? Short-term, they [...]

Inflation Station

By | 2017-09-14T07:28:36+00:00 September 14th, 2017|Global Market Update|

What’s going on with inflation? Dallas Fed “Trimmed Mean” PCE, Year-Over-Year. Source: St. Louis Fed Figuring out inflation is like asking about ice cream: there are a million flavors and variations. The Consumer Price Index uses a fixed basket of some 40,000 prices, surveyed monthly. The Commerce Department determines a deflator that shifts as the economy shifts. If the price of beef doubles and everyone switches to chicken, the index takes changing consumer tastes into account. And then there’s core inflation, regional inflation, and [...]