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 [...]

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 [...]

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 [...]