Home 2017-07-28T13:07:05+00:00

Risk, Uncertainty, and Balance

By | March 2nd, 2018|

The Era of Low Volatility is Over. Photo: NOAA. Source: Wikimedia That’s what I thought when I looked at last month’s returns. Equity markets around the world were down around 5% last month, led by economic stalwarts like Johnson & Johnson and Samsung Electronics. Growth-oriented companies, like Amazon and Microsoft, still keep chugging along. But the market’s unbroken string of monthly advances – with barely [...]

Mexican Trade Revolution

By | March 1st, 2018|

Has trade with Mexico fundamentally changed?     Emelio Zapata. Public Domain. Source: Wikimedia Mexico runs a trade surplus with the US. Global supply chains mean that many component parts are shipped to Mexico from all over the world, assembled, and then exported to the US. Historically, Mexico also exported oil to the US. But that’s changed over the past few years. From 2006 to [...]

Getting (Un)Emotional

By | February 28th, 2018|

Can we keep our emotions in check while investing? Passionflower, useful in anger management. Photo: PumpkinSky. Source: Wikimedia In the short-run stocks are driven by our emotions. A company’s stock may be up 4% one day and down 7% the next, based on a of couple analysts’ comments. But has the fundamental value changed that much in 48 hours? Probably not. John Maynard Keynes once [...]

Staying Comfortable

By | February 22nd, 2018|

How do you stay calm when the market is crazy?     Drawing of Valkyries. Illustration: Johannes Gehrts. Source: Wikimedia Birgit Nilsson was a great dramatic soprano. One day an interviewer asked what was the key to successfully performing in demanding roles like Brunhilde and Isolde. Her answer was immediate and a little surprising: comfortable shoes. Some of the operas required Nilsson to stand in [...]

Taxing Energy in Context

By | February 21st, 2018|

How high are our energy taxes? Source: Energy Information Administration The US is a low-tax country. We were founded because of a tax-rebellion, and tax protests ripple through our nation from time to time. The latest round of corporate tax reform was in part a reaction to high corporate tax rates – and they were high, compared with the rest of the world. That’s why [...]

Public Goods, Private Uses?

By | February 20th, 2018|

What is a public good? Photo: Ed Yourdon. Source: Wikimedia Economics is at the heart of financial capitalism. After all, companies can’t pay their debts and grow if they can’t make sustainable, economic profits. Financial engineering may redirect where their cash goes, but without economic growth, we won’t see financial growth or improvement in market values. As a result, it’s crucial that we understand some [...]

Avoiding the Sting

By | February 16th, 2018|

How do we avoid getting stung by an investment scam? Photo: Csaba Szily. Source: Wikimedia Investment scams are everywhere. From Ponzi schemes to obscure bank instruments to fraudulent crypto-operations, today’s financial landscape seems designed to encourage crooks and criminals to try to bilk us out of our savings. What are some of the signs that someone is trying to swindle you? First, check the pitch. [...]

Cyprus on the Beach

By | February 15th, 2018|

Whatever happened to Cyprus? Source: Wikimedia Cyprus is a large island in the eastern Mediterranean Sea, with a population of 1.2 million – about equal to that of New Hampshire – and an area half that of New Hampshire. It’s divided between North and South Cyprus because of an invasion by Turkey in 1974. Cyprus joined the Euro-zone ten years ago, and had a banking [...]

Getting Swapped Out

By | February 14th, 2018|

What is “swapping”? Photo: Ryan McGuire. Source: Gratisography When I was growing up, swapping was a term of art that the big kids used when they cheated the little kids out of their stuff. I remember going to birthday parties where we swapped pieces of cake. Somehow, my big brother always ended up with the biggest slice. In banking, swaps are a way for the [...]