New jobs in the private sector increased by a disappointing 139,000 last month, according to today’s ADP Employment Report for February. The consensus forecast via surveys of economists expected 150,000, although The Capital Spectator’s econometric projection anticipated a lesser gain, albeit one that turned out to be too low relative to the actual number. In any case, the labor market is still expanding at a comparatively weak pace by the standards of the past year or so. Although February’s advance was a bit faster than the increase for January, that’s only because of ADP’s downward revision for the first month of the year in today’s update.
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The term “investing” is a misnomer when it comes to managing money. It’s really a job of choosing a set of risk factors that will produce an expected result. Most folks don’t think in these terms, but the reality of “investing” boils down to a basic framework: select assets today on the assumption that a particular outcome will arrive tomorrow. The details, of course, matter, which is to say that not all assumptions are created equal. One that’s on the short list is the belief that reversion to the mean endures when it comes to returns. Buy low, sell high, as they say, because returns are always fluctuating. History exhibits a long and deep pool of empirical evidence for thinking that a mean-reverting process dominates price behavior in financial and commodity markets through time. Embracing this idea in real time, however, is devilishly difficult, which helps explain why so many investors find it tough to earn a satisfying return over one or more business cycles. The trap of buying high and selling low, in sum, is never far.
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I was going to compile a list of commentary and analysis on the events related to upheaval in Ukraine, but Juhani Huopainen of MoreLiver’s Daily beat me to it with his comprehensive overview at Saxo’s TradingFloor.com.

Private nonfarm payrolls in the US are projected to increase by 115,000 (seasonally adjusted) in tomorrow’s February release of the ADP Employment Report, based on the The Capital Spectator’s median econometric point forecast. The projected gain is substantially lower than the previously reported increase of 175,000 for January. Meanwhile, The Capital Spectator’s median projection for February is well below a pair of consensus forecasts based on surveys of economists.
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February was a strong month for the major asset classes, but the prospects for more of the same in March are under threat in the wake of the deepening crisis in the Ukraine. Russia’s intervention so far has been limited to the Ukraine’s Crimean Peninsula, but tensions are growing as the US and Europe struggle to find the right policy mix to keep a lid on this potentially explosive situation that carries ramifications for the global economy. Leaving all that aside for the moment, prices revived last month after widespread losses in January. Leading the markets higher in February: commodities, which gained more than 6%, based on the Dow Jones-UBS Commodity Index. At the bottom of the pack: inflation-protected Treasuries, which nevertheless managed to eke out a small advance.
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● Money Mania: Booms, Panics, and Busts from Ancient Rome to the Great Meltdown
By Bob Swarup
Summary via publisher, Bloomsbury
Money Mania is a sweeping account of financial speculation and its consequences, from ancient Rome to the Meltdown of 2008. Acclaimed journalist and investor Bob Swarup tracks the history of speculative fevers caused by the appearance of new profitable investment opportunities; the new assets created and the increasing self-congratulatory euphoria that drives them to unsustainable highs, all fed by an illusion of insight and newly minted experts; the unexpected catalysts that eventually lead to panic; the inevitable crash as investors scramble to withdraw their funds from the original market and any other that might resemble it; and finally, the brevity of financial memory that allows us to repeat the cycle without ever critically evaluating the drivers of this endless cycle. In short, it is the story of what makes us human.
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