The Seeds of Success

By | 2017-09-13T09:57:09+00:00 September 13th, 2017|Global Market Update|

Does education determine our destiny? Harvard Yard. Source: Wikipedia September is the month of the “rug rat race,” a comical contest that pits parent against parent vying to get their children into the best preschools, the most competitive grammar schools, and selective traveling sports teams. A couple of economists have documented how much time parents are spending on ways to stimulate their preschoolers’ early academic achievement. Spoiler alert: it’s going up. They attribute this trend to increased competition in college admissions. After all, more [...]

The Competitive Edge

By | 2017-09-11T05:33:58+00:00 September 11th, 2017|sans-serif"> Global Market Update, style="font-size:12.0pt;font-family:"Arial"|

Why do good competitors try to become monopolies? Public Domain. Source: Wikipedia Most people enjoy competing. They know the thrill that comes from sprinting for the finish line, or fighting for critical new business. They also know that competing keeps them sharp and helps them improve what they do. If a business doesn’t serve their customers well, someone else will. Competition leads to happy customers and vigorous companies. So why would anyone want to become monopolies If businesses can eliminate the competition, they’ll secure [...]

Trade Uber Alles

By | 2017-09-08T07:36:36+00:00 September 8th, 2017|Global Market Update|

How did Germany get so lucky? Source: Global Sourcing Blog China entered the World Trade Organization in 2001. This has an immense, positive impact on their exports. With trade came growth, and China’s growth meant low-skilled jobs were at risk. In the US, workers who lost their jobs had a hard time finding new employment, and often dropped out of the workforce. Our labor participation rate peaked in the year 2000, and has fallen steadily since, despite our growing economy. But this didn’t happen [...]

Symmetry Bias

By | 2017-09-07T06:55:32+00:00 September 7th, 2017|Global Market Update|

Have you ever noticed how much we like balance? Da Vinci’s “Vitruvian Man.” Source: Wikipedia We find symmetrical faces more attractive. Animals with asymmetric features – like flatfish with both eyes on one side of their heads – are disconcerting. We like music to have a sense of balance, with a theme, a variation, and a return to the original theme: A-B-A. Classical architecture appears symmetric as well. The Parthenon in Greece and Pantheon in Rome are beautiful examples. And we like balance in [...]

Cutting into Dimes

By | 2017-09-06T09:35:50+00:00 September 6th, 2017|Global Market Update|

Why is it hard to cut government programs? Photo from ‘March of Dimes Ball,” 1934. Source: FDR Library One reason is the "March of Dimes" problem. Back in 1934, FDR helped start the March of Dimes as a way to raise private money to fight polio. They were tremendously effective: during the post-war polio epidemic the March of Dimes helped over one third of all polio victims nationwide. After the development of the Salk vaccine, the number of Polio cases fell precipitously. Today, polio [...]

Capitalism Without Capital

By | 2017-09-05T07:44:01+00:00 September 5th, 2017|Global Market Update|

Do start-ups need as much capital today? Photo: Jade. Source: Morguefile It doesn’t seem like it anymore. It used to be that a new company or concept needed major financial support. Now, a couple of motivated folks working from a garage can change the world – the way Apple famously did in the ‘70s. Back in the ‘70s, intangible capital was below 30% of the S&P 500’s capital structure. Now it’s over 80%. And it’s not just computer software. Companies as diverse as pharmaceuticals [...]

Rising Tides, Rising Costs

By | 2017-09-01T07:06:29+00:00 September 1st, 2017|Global Market Update|

Are storms costing us more? Photo: Marc Averette. Source: Wikipedia It sure seems like it. In the ‘80s, the average annual cost of natural disasters worldwide was $50 billion per year. This year, Harvey alone will cost over $30 billion. And Hurricane Irma is still on her way. There’s no question that the cost of storms is rising. In the US, where we have very good insurance data, the insured losses to our homes from all weather events – excluding hurricanes – in 1980 [...]