The Merchants of Venice

By | 2017-11-07T07:14:52+00:00 November 7th, 2017|Global Market Update|

Whatever happened to Venice? Piazza San Marco, by Canaletto. Source: Metropolitan Museum of Art Venice used to be one of the richest cities in the world. After the fall of the Roman Empire, the world devolved into competing factions. There was no uniform standard of exchange, and no central authority. But trade in spices, grains, cloth, and slaves was booming. By 1330, Venice was as big as Paris, and probably three times the size of London. One of the keys to Venice’s success was [...]

The Difficulty of New Ideas

By | 2017-10-25T07:11:05+00:00 October 25th, 2017|Global Market Update|

Why is it so hard to do something new? Source: Coface.ch Anyone who has tried to introduce a genuinely new idea knows how difficult it is. Counterparties default, it’s hard to obtain funding, and in much of the world, it’s hard to start a new business. People are skeptical of something different. When Alexander Graham Bell’s brought his newfangled telephone to the President of Western Union, he dismissed it as “practically worthless.” In 1995 Newsweek printed an article that predicted internet-based commerce would be [...]

Healthy Innovation?

By | 2017-10-12T06:56:24+00:00 October 12th, 2017|Global Market Update|

Why should we worry about health care? Source: Vox Public health analysts often bemoan the fact that the US spends a lot on healthcare. Health spending accounts for 18% of GDP, while the rest of the developed world spends about 10%. But we get a lot of innovation for that spending. The US has more clinical trials than any other country. We have more patents. The US has the most Nobel laureates in physiology and medicine. Our research universities are the envy of the [...]

95 Lessons

By | 2017-10-06T07:51:44+00:00 October 6th, 2017|Global Market Update|

We don’t live in unprecedented times. But they are unusual. Martin Luther posting his 95 Theses. Source: British Museum It’s popular to say that we live in unprecedented times. Things like mobile computing and global social networks are totally new. And from a technological perspective, that’s absolutely correct: we’ve never had so much power in our pockets. Apple’s new A11 Bionic chip on their iPhone X can execute more operations per second than a MacBook Pro, which in turn was way more powerful than [...]

Getting Critical

By | 2017-08-08T07:35:08+00:00 August 8th, 2017|Global Market Update|

What is a critical mass? Photo: US Department of Energy. Source: Wikipedia A critical mass is the amount of fissile material needed to sustain a nuclear chain reaction. The amount depends on the nuclear properties, its density and shape, the surroundings, even the temperature. Enough atoms are splitting and spitting off energy and neutrons to make more atoms split and generate more neutrons and more energy. The chain reaction continues until all the fuel is consumed. In society, a critical mass is the number [...]

Exchange Traded Funky

By | 2017-07-28T07:08:54+00:00 July 28th, 2017|Global Market Update|

Is there an ETF for everything? Photo: Jack Moreh Source: Free Range Stock Photo It sure seems like it. ETFs used to be primarily an efficient way to invest in a broad market index, like the S&P 500 or an aggregate bond index. Then they branched off into market sectors: small cap stocks, tech companies, country funds like the UK or China. All this seemed like a reasonable way to diversify a portfolio. And it’s so convenient: instead of trying to pick winning stocks, [...]

PC David and Goliath

By | 2017-07-17T16:47:00+00:00 July 7th, 2017|Global Market Update|

Remember Compaq? Photo: Tiziano Garuti. Source: Wikipedia The PC maker was founded in 1982. It went from start-up to $1 billion in sales in only five years. It tripled that number in four more years, becoming the third-largest PC-maker – a leading producer of a revolutionary product. Compaq made a “luggable” computer – a PC that weighed 25 pounds or so. You could “lug” it from place to place, unlike desktops, which needed a lot more time to set up. It was one of [...]

William Baumol, RIP

By | 2017-07-17T12:21:19+00:00 May 11th, 2017|Global Market Update|

Who was William Baumol? Source: Journal of Economic Perspectives, American Economics Association William Baumol was an economist who taught for years at Princeton. He died last week at the age of 95. He had a long and productive career, writing papers and books over the course of seven decades. He is perhaps best known for his theorem on wages, Baumol’s Cost Disease, which explains why cars and computers get cheaper while haircuts and college tuition get more expensive. Essentially, areas of the economy with [...]

Market Dominance and the Winner’s Curse

By | 2017-07-17T12:21:20+00:00 April 28th, 2017|Global Market Update|

Do we live in a winner-take-all economy? Source: Latticeworks Increasingly, commerce seems dominated by a few big firms. We use our iPhones to search for stuff on Google; we buy it on Amazon; and we tell our friends about it on Facebook. These tech titans provide everything we need, and they’re incredible profitable. Normally, high profits would attract competitors, forcing down margins. Consumers would benefit, as companies vie for their business, either through lower prices, better service, or some other innovation. But that doesn’t [...]

Robotic Taxes?

By | 2017-07-17T12:21:28+00:00 March 6th, 2017|Global Market Update|

Should we institute a tax on robots? Photo: Xavier Caré. Source: Wikimedia Commons That’s what Bill Gates thinks. When people fear what new technology is going to do to them, they’ll avoid it rather than try to shape it. If there’s a robot tax, that might allow countries to provide pensions and training so people can adjust to their new economies. If the robots are eating our jobs, then we need to find new jobs – like blacksmiths learning how to build and repair [...]