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December’s unemployment report
Happy Friday to everyone! I wanted to comment on Friday’s announcement of December ’08 unemployment figures. The absolute number of jobs lost was 524,000. Those lost jobs caused the unemployment rate to jump up to 7.2%, a 16-year high. In addition the media outlets are all reporting the total number of jobs lost in 2008 as 2.6 million, “…the most since World War II ended in 1945.” This of course makes for a dramatic headline, but is not particularly interesting information. Why? The population of the U.S. is much...
read moreIn to intuition
I wanted to comment about the story from yesterday’s Wall Street Journal that I excerpted here on the blog. Namely, I wanted to highlight the fact that the author of the story has an implicit mistrust of intuition. This is a continual source of frustration for me as a former, and successful, professional investor. Our culture is one that does not respect the powerful information that comes from intuition. In fact, I was having lunch with a former colleague of mine recently and asked him for a definition of intuition and he more or less...
read more"Why we keep falling for financial scams"
Hello again, There is a fairly good article in Monday’s Wall Street Journal called, “Why We Keep Falling For Financial Scams.” I wanted to excerpt a portion of the piece written by Stephen Greenspan (no relation to Alan) as a form of public service. Here goes… “Financial scams are just one of the many forms of human gullibility — along with war (the Trojan Horse), politics (WMDs in Iraq), relationships (sexual seduction), pathological science (cold fusion) and medical fads. Although gullibility has long...
read moreForum failing
The Wall Street Journal reported today about the proceedings of the American Economic Association from this past weekend. The article was entitled, “Experts’ Rx on How to Get Out of This Mess.” The story quoted 11 eminent economists as to their opinion of what needs to be done to turn the U.S. economy around. I am assuming that each of these 11 gave comprehensive interviews or speeches that served as the base material from which the WSJ story was created. However, the portions that were considered essential by the...
read moreIdiot Russian professor
You may have seen the story that has been running in the Wall Street Journal for the last week or so about a Russian college professor, ex-KGB, that has been predicting the demise of the United States by 2010. He has been making these predictions since 1998. This has been the top “most read” story for about 7 days on the WSJ. While I believe that the United States, and 1st World economies in general, have a lot of structural changes that need to take place, I think that the United States is a looooong way away from collapse. There...
read moreConfidence, consumer style
It may seem strange but today’s report that consumer confidence hit an all-time low, as measured by the Conference Board, is actually a strong sign that the economy is recovering. How could I say such a preposterous thing? The answer is that generally consumers respond very slowly to economic news. That’s a broad-brush way of saying that most consumers respond to economic news rather than anticipate it. That means that for consumer confidence to have finally hit an all-time low in the midst of two years worth of bad economic news...
read moreWhen it all breaks down
I know, I know, no postings for a week and then an explosion. Last minute Holiday shopping, people traveling, blizzards, appliance malfunctionings, etc. has prevented me from posting what has needed to be posted. But I didn’t stop paying attention or thinking or feeling about the world. This posting is again about the need for the economy, any economy, to exist within an ethical system that inspires and engenders trust amongst market participants. I have talked at length about this subject so this post will be short. This comes from a...
read moreRe-fi hits hi-fi
Today CNN is reporting that a refinancing boom has swept the country. In my household we are considering approaching our mortgager to refinance our house. Are you doing the same in your household? The reason that this is relevant is that low interest rates are inducing exactly what they are supposed to induce: economic activity and liquidity flow. As you all know, the American economic system seized up into a catatonic state starting around late-August, early September as liquidity slowed to an absolute trickle. The Federal Reserve dutifully...
read moreLittle drummer boys
Happy Holidays Everyone! Since ’tis the season I thought I would lighten things up for the first time in a long while and make a post about amazing drummers whose playing I love and admire. Without further delay… Favorite drummers: Ginger Baker: The original drummer for the 60s power trio, Cream. He has gone on to have a scintillating solo career, too. Some of his best work can be heard on Ginger Baker’s Air Force, Horses and Trees, and many other releases. You might also know his playing from Blind Faith. Of all of the...
read moreWealth vs. income
OK, I thought I was done for the weekend, but each day for the last week as I log into my personal e-mail account there is a jackass story on MSN that I just have to comment on. The story is entitled, “Does $250,000 a year make you wealthy?” If you follow the link you actually have to search around the MSN site to find the article and ultimately you are led to:...
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