I will be happy if Mitt Romney wins the election — IF AND ONLY IF — the Republicans also take control of the Senate. Likewise, I will be happy if Barack Obama wins the election — IF AND ONLY IF — the Democrats also take control of the House. So, how can I be happy if the country is going in the wrong direction? Because…
Just as Supply-side economists reflexively state that a tax cut will solve any problem anywhere at any time, existentialists reflexively describe anything they don’t like as simply “absurd,” a word of special significance to them. Indeed, they argue that the “ultimate absurdity” is death. This weekend, I visited a loved one who has just entered hospice. Since then, I have been thinking of the great…
All year long, the most widely anticipated economic report has been the “Jobs Report” which will be issued this morning at 8:30 AM. Of course, as the last important economic report before the election, it also has great political significance. Economists are expecting about 125 thousand new jobs, with the unemployment rate virtually unchanged. (This number should not be skewed by SuperStorm Sandy, but the…
Do you remember when the first love of your life dumped you? Do you remember the first time you were disappointed in your child? Do you remember the first time when you actually realized that you were beating yourself up . . . over something somebody else did? Do you remember how disappointed you were — the first time — that your favorite politician lost…
How much would you pay to receive $1.00 a year from me? Would you pay $2? Would you pay $200? If you paid $2, you would be paying two times the annual revenue? If you paid $200, you would be paying a hundred times revenue. This is the same concept as the “price-earnings (PE) ratio.” How much would you pay for a stock that earns…
Like a high-maintence ex-wife, it was almost pleasant when Google took down this blog last week. At first, I enjoyed the freedom from maintaining it . . . but soon started missing it. The late Charlottesville billionaire, John Kluge, once described his last ex-wife as being his favorite ex-wife. I’ve written one award-winning book and am working on another. I’ve written countless columns and even…
I’m not sure which company I dislike the most. One gleefully shreds our right to privacy, and the other bets against its own clients. On the other hand, Google also makes a world of information available to average users, and Goldman Sachs has a truly great group of investment strategists. In their latest commentary, Goldman expects U.S. growth to be 2.2% this year, dropping to…
What were you doing 25 years ago today? I was at a real estate loan closing in Texas. That’s when the stock market crashed . . . losing 22% of its value in one day — still the all-time greatest one-day loss. Of course, it was terrifying, especially to those who didn’t believe it was only a temporary loss, which it was. But, could it…
One of the advantages of waking up every morning at 4:30 is that I get to sleep during any presidential debates the night before. The debates are way-too-late for early risers on the east coast. But, I already know Obama won it, because MSNBC is happy this morning, while Fox News generally calls it a draw. Even Karl Rove called it a draw. My question…
No paratrooper has ever forgotten that feeling of jumping into nothing and then dropping rapidly. It has been over 40 years since my first jump, and I can still remember every second of it. So, it is not surprising that I missed my tee time on Sunday afternoon, as I stood transfixed, watching the historic jump of Felix Baumgartner from over 128 thousand feet, from…
To see my latest quarterly column for Inside Business, please click on the hyperlink or copy/paste it into the URL box: http://insidebiz.com/news/q3-approaching-cliff
Imagine what would happen in the United States if inflation rose from 21.5% last year to an officially estimated 25% next year but is really approaching 70%. Imagine if our economy grew 2% last year (which it did) but was expected to drop by not less than 0.9% this year. Imagine if the dollar lost a third of its value over the past month alone!…
Do you have some time? I’d like to tell you the many complaints I have with the Simpson-Bowles Plan to fix America’s fiscal problems. In fact, you should put your feet up, as this may take all day . . . OK, never mind! If you’ve been reading this blog very long, you already know how I think about the rapidly-rising cost of entitlements, and…
Like an aircraft carrier taking a long time to change directions, we are seeing some real progress by Europe to fix themselves. In Portugal, workers will now contribute 18% of their salary to their “Social Security,” up from 11%. In Italy, companies are now allowed to do the unthinkable — actually layoff employees when the economy tanks. (It is hard to imagine a company not…
Every year, Dr. James Koch of Old Dominion University delivers his “State of the Region” presentation on the local economy. Yesterday, I attended that presentation, and, as usual, it was excellent! There was one table of data, however, that really bothered me. From 2001 through 2010, the average non-government employee in the U.S. saw his or her wages increase 20.7%. We were more fortunate in…
Today is the fifth birthday of the all-time high in the Dow Jones Industrial Average, which was 14,164. That is only 4% above where we are now. Now, think about the economy five years ago. It was much stronger. Unemployment was low. Home prices were rising. Everything was good! So, does the stock market reflect the state of the economy? The conventional wisdom is that…
A year or so ago, a good friend recommended a book entitled “Philanthrocapitalism” by Matthew Bishop and Michael Green. At first blush, it chronicles the growth of very good things done by very rich people, but it is much more. Very rich people have made very large donations to various charities for generations, but the latest stage in the evolution of charity is giving more…
I have been in love with Ayn Rand all my life, even though she has been dead for thirty years. A novelist turned philosopher, she is the intellectual mother of notables from Alan Greenspan to Paul Ryan. Her last work and greatest seller was Atlas Shrugged. It tells the story of successful people who keep disappearing mysteriously. As it turns out, these successful people are…
Nothing kills success like excess! Senator Joe McCarthy was the Republican senator from Wisconsin during the early 1950s, at the height of the “Cold War.” He became a respected national leader, with his obsession that our government was full of closet Communists. By simply asking if someone was a Communist, that person then had to prove the negative — that he was NOT a Communist.…
The September Jobs Report was released this morning. While it was a good report, it was certainly not a great report. The rate of unemployment dropped to 7.8 percent, the lowest during the Obama Administration, but only 114 thousand jobs were created. The level of both unemployed and under-employed remains at 14.7 percent, which is a huge waste of human capital. But, there are some…
While the Democratic Party may offer a big tent for many ethnic groups, the Republican Party offers a big tent for many schools of economics. The Democratic Party is home to most Keynesian economists, with a smattering of Austrian economists. The Republican Party is home to most Austrian economists, a few Keynesian economists, all Supply-side economists, all Monetarists, and most Libertarians. It can be an…
Historians remind us that the United States has faced political gridlock in Washington before. Political scientists remind us that gridlock is not always bad, if it keeps the government from doing something bad. Clearly, all that is true, but we have never faced gridlock from such a weak, vulnerable position, which worries me. I’m not talking about the Fiscal Cliff, which is coming at us…
Existentialists have a “thing” about anything they consider absurd. Calling something or somebody absurd is about the worst thing you can say. This was the weekend of the Neptune Festival in Virginia Beach, and my Rotary Club operated the beer concession to raise money for our charitable foundation. As we learned, the most important part of selling any alcoholic beverage is paying homage to whatever…
Ruchir Sharma is a high-powered, globe-trotting executive with Morgan Stanley, in charge of Emerging Market Equities and Global Macro. I just finished his new book, Breakout Nations: In Pursuit of the Next Economic Miracles. He points out that China, Russia, and India are yesterday’s news and showing all the familiar signs of slowing. The future lies with such nations as Mexico, Indonesia, Turkey and Korea,…
In that 1991 movie classic, two women choose certain death driving over a cliff rather than continue living in grinding disappointment. At year-end, our country faces a similar decision. Remember: good economic policy requires both monetary policy AND fiscal policy. Monetary policy is controlled by the Federal Reserve, which can make decisions much more easily than Congress, which controls fiscal policy. The inability of Congress…
Yesterday was a long day, rising at 2AM and going back to bed at 1AM this morning. During that 23-hour day, I caught four different airplanes . . . and heard 19 different apologies from the airlines. By the end of the day, I was thinking about the purpose of apologies. Here are the definitions: 1. a written or spoken expression of one’s regret, remorse, or…
Despite my best efforts to consume mass quantities of information, there are many things beyond my comprehension. For example, I don’t understand why whole nations would riot, even killing people, over some tasteless movie trailer in the U.S. or some cartoons in Denmark. It just lies outside my realm of comprehension. Likewise, I don’t understand why it is “cute” to watch kids put unhealthy stuff…
The popular wisdom on Wall Street is that is the stock market can usually see six months or so down-the-road. Historically, when the market goes up, the economy usually follows. However, is it able to predict the election outcome? The analysts at LPL Financial just completed an interesting analysis. They divided the sectors of the economy that do well under Democrats and those that do…
The Finance Ministers of Europe had a meeting last weekend to deal with (1) the bailout of Spain’s government, (2) a two-year extension for Greece, and (3) a common banking system for Europe. The result of all that brain power was nothing, saying they were in “no rush.” After all, they have been in a crisis for three years, and the world is still alive.…
Since Fed Head Bernanke announced Quantitative Easing III (QE3) last week, I have been reading as much analysis about it as possible. It is another in a series of bold steps to triage the patient. But, first, quantitative easing occurs when the Fed Reserve buys bonds. By accepting the bonds, the Fed then credits the checking account of whomever sold them the bonds. In this…
This Spring, things were improving rapidly in Europe. The ECB had instituted its Long-Term Refinancing Operation (LTRO) program that essentially gave banks a new three-year funding mechanism or three year “lease-on-life.” Interest rates started falling. Their stock markets were rising. Optimism bloomed! Then, it all fell apart . . . This Fall, things are again improving rapidly in Europe. The German Supreme Court didn’t kill…
On Wednesday, the most important person in the world will be Andreas Vosskuhle. He is the head of the German Supreme Court, which will rule on the constitutionality of German support for the European Stability Mechanism (ESM). It is widely believed that the court will support it, which is one of the three legs critically necessary to deal with the European financial crisis. If the…
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