Some events are legitimately macro, or MACRO, such as the shifting of the Earth’s axis in the wake of the Chilean earthquake. The Feb. 27 earthquake “may have shortened the length of each Earth day,” according to the Jet Propulsion Laboratory.
Measured in dollar terms, the quake’s impact is easier to spot. One estimate puts the damage as high as $8 billion.
The human loss, of course, is beyond calculation. How can we help? No shortage of options, including the Red Cross and the International Medical Corps, to name but two of the many organizations that need financial support, for Chile as well as for the victims of Haiti’s recent quake.
Author Archives: James Picerno
THE ENDLESS SEARCH FOR MACRO POLICY SOLUTIONS
Everyone has a prescription for managing the business cycle these days, but no one has a solution. That’s because there are none, at least nothing that passes the smell test of a workable system that can deliver nirvana: maintaining capitalism’s power to drive economic growth while eliminating its tendency for stumbling from time to time.
IS THE TAX BITE THE NEW HEADWIND?
Today’s personal income and spending update for January looks like a warning of things to come, but not for the obvious reasons. The weasel in the henhouse is all the more troubling at the moment since it’s masked by the all-important topic of consumer spending, which rose substantially last month. Beneath this rosy surface, however, is a potentially troubling trend.
ASSET CLASS RETURNS FOR FEBRUARY
The trend in February was again one of posting a wide range of results and a shifting pattern of winners and losers on a monthly basis. This isn’t a shock, but more of it is probably coming, meaning that a new set of challenges await for managing asset allocation relative to the trend for much of the past 12 months.
NO ONE LISTENED, BUT EVERYONE SHOULD READ IT
Harry Markopolos spent nearly a decade telling the Securities and Exchange Commission that Bernie Madoff’s returns were too good to be true. The SEC more or less ignored Markopolos, a securities analyst and forensic accountant. The greatest Ponzi scheme in history, as a result, rolled on for years, ultimately stealing billions of dollars from investors, large and small, before it all came crashing down in 2008.
Markopolos has written a first-rate memoir of his lonely one-man investigation into Madoff’s $65 billion fraud: No One Would Listen: A True Financial Thriller
MORE TROUBLES WITH BUBBLES
There’s been quite a bit of talk about a bond bubble recently. “Are bonds in a bubble?” inquires The Wall Street Journal. SmartMoney doesn’t even ask but instead declares in a headline: “The New Bond Bubble.” Meanwhile, a prominent forex trader warns today in Asia Times that “a nasty popping of the bond-market bubble lies in wait for investors.”
THE TROUBLE WITH DEFINING BUBBLES
What’s the difference between a bubble vs. a legitimate rise in prices? Fundamentals, or so the story goes.
IS THIS REALLY JUST AN EXPENSIVE GAME OF MUSICAL CHAIRS?
The fiscal debacle in Greece is at least partly connected to minimizing (hiding?) deficits. In 2000 and 2000, Greece borrowed billions via currency swaps. But the fix was only temporary and the red ink has come back to haunt the country. (Gee, where have we heard this one before?)
CAN WE BELIEVE THE RISING TREND IN DURABLE GOODS ORDERS?
The labor market may be facing new challenges, but new orders for durable goods rose again last month. This leading indicator of future economic activity increased 3.0% in January, the Census Bureau reports this morning. That’s good news, of course, although we’re in no mood to celebrate, given the apparent reversal of fortunes in jobless claims, as we discussed in our previous post.
ANOTHER WARNING SIGN IN JOBLESS CLAIMS
Last week’s rise in new filings for jobless claims adds another data point to the case for thinking that the downtrend has hit a wall in this critical measure of the labor market’s trend.