Doing the Right Thing

By |2017-11-30T06:05:44+00:00November 30th, 2017|Global Market Update|

Why should business people care about morals? “Avarice” by Jesus Solana. Source: Wikipedia In Hollywood, the amoral business person is a standard trope – the greedy capitalist who only cares about increasing the bottom line, no matter what the cost to workers, communities, or the environment. But markets need to have standards – like trust, honesty, and fairness – in order to work. It’s bad business to deceive people. If I buy a bag of potato chips and find mostly air inside, I won’t [...]

A Parliament of Fed Officials

By |2017-11-29T06:02:57+00:00November 29th, 2017|Global Market Update|

Who makes up the Fed? Burrowing Owls. Photo: Tania Thompson. Source: Shutterstock For most people, the Federal Reserve is a mysterious place that makes mysterious hooting sounds every few months, and they tell banks where to set interest rates. Academics and politicians rail at the Fed for various reasons, but their debates often sound like medieval scholastics debating how many angels can dance on the head of a pin: irrelevant to our everyday lives. But the Fed is an essential part of our financial [...]

Lipstick on What?

By |2017-11-28T08:05:05+00:00November 28th, 2017|Global Market Update|

Remember the PIIGS? Photo: Doug Tengdin Six years ago, the problems with Europe’s common currency were in full flower. Greece had defaulted on its Euro-denominated sovereign debt, and the economic challenges facing Portugal, Ireland, Italy, Greece, and Spain (the PIIGS) were headline news. The Greek economy was facing hard times. Their textile exports to the rest of the EU had been displaced by China, and they found it hard to compete. During their austerity measures, IMF bailouts, and debt renegotiations, focus shifted to other [...]

The Price of Everything, the Value of …

By |2017-11-27T07:22:58+00:00November 27th, 2017|Global Market Update|

Is everything overpriced? Photo: Henning Schlottmann. Source: Wikipedia One of the most reliable ways to perform well in our unpredictable markets is to find something that everyone believes and take a position outside of that consensus. In other words, to find a contrary opinion. Because when everyone believes something, and it’s priced accordingly, there’s often profit to be made on the other side. For example, everyone knew in 2006 that housing prices don’t come down. If the price falls, people just take their homes [...]

Troubling Developments

By |2017-11-22T07:10:20+00:00November 22nd, 2017|Global Market Update|

Could the “Troubles” return to the UK? Docklands Bombing, London, 1996. Fair Use. Source: Wikipedia There’s a general sense in the markets that we have achieved a peaceful equilibrium, that war and destruction are something that is happening “over there,” and that – at least among developed nations – democracy and dialogue have won out over violence and bloodshed. But there’s no law of nature that makes this so. And it wasn’t so long ago that London faced a significant terrorist threat. “The Troubles” [...]

Corporate Dodgeball

By |2017-11-21T07:49:10+00:00November 21st, 2017|Global Market Update|

Remember playing dodgeball? Photo: Jay Singe. Source: Morguefile In elementary school, we would count-off by twos, get on either side of a central court, and throw rubber balls at each other. If you got hit by a ball, you were “out” and had to leave the game. The goal was to move as quickly as you could to avoid the volley of balls being tossed at you. For some reason, the big kids who stood stock-still and threw with great velocity seemed to be [...]

German Lessons

By |2017-11-20T07:55:46+00:00November 20th, 2017|Global Market Update|

German Lessons Why is the German economy doing so well? Hacker-Pschorr Oktoberfest celebration. Photo: Mark Burger. Source: Wikipedia After a decade of “Euro-sclerosis” and deep involvement in both the global financial crisis and the Euro crisis, the German economy seems to be moving again. Their economy grew over 2% last quarter, and has been trending higher. Unemployment is 5.6%, the lowest in the Euro-zone and lower than it’s been since the early ‘90s. That’s not supposed to happen when you have negative interest rates [...]

The Da Vinci (Investment) Code

By |2017-11-17T07:09:33+00:00November 17th, 2017|Global Market Update|

Is art an investment? “Salvatore Mundi” by Leonardo Da Vinci. Source: Wikipedia Leonardo Da Vinci didn’t leave many paintings, perhaps only a couple dozen. So when “Salvatore Mundi,” – commissioned in 1500 and later owned by Charles I and the Duke of Buckingham – resurfaced in 2005, the art world went a little crazy. It was cleaned and restored, and exhibited by London’s National Gallery in late 2011. In 2013 a Russian collector bought it for $127 million. It sold on Wednesday for $450 [...]

Saints and Sinners

By |2017-11-16T07:26:34+00:00November 16th, 2017|Global Market Update|

Sometimes the people and organizations we look up to turn out to have the same flaws as the rest of us. “The Reward of St. Sebastian.” Source: Wikipedia It’s natural to want to admire others, to look for role models and examples that we can learn from. Most of us grew up admiring parents, teachers, coaches, and other adults who looked out for us. The same holds for organizations. Some seem to stand out as models of selfless service, and we idolize them. So [...]

Looking for Risk in All the Wrong Places

By |2017-11-15T07:11:22+00:00November 15th, 2017|Global Market Update|

Can Artificial Intelligence really manage risk? Source: Wikipedia There’s a new application for Artificial Intelligence. It’s called regulatory technology, or “regtech.” It takes the rulebook of a supervisory agency, like the FDIC, and translates it into a computerized logic engine. The regulators evaluate the logical consistency of their rules, and the banks structure and label their data to be queried. This allows the regulator to look for broad patterns in the data that might not be immediately apparent. AI can identify deep, dynamic structures [...]