● Why Nations Fail: The Origins of Power, Prosperity, and Poverty
By Daron Acemoglu and James Robinson
Review via The Guardian
Acemoglu and Robinson are intellectual heavyweights of the first rank, the one a professor of economics at MIT, the other a professor of political science at Harvard. Mostly, such people write only for other academics. In this book, they have done you the courtesy of writing a book that while at the intellectual cutting edge is not just readable but engrossing. This alone would be reason to take notice: a vital topic, top scholars, and a well-written book. But this is not the half of it. The reason that Why Nations Fail is not to be missed is that their thesis pulls apart the two big brute facts of global development. Far from seeing China as the clue to spreading prosperity, Acemoglu and Robinson see it as yet another instance of a society rushing into a cul-de-sac. China is not, on their analysis, on course for our own level of prosperity. Their argument is that the modern level of prosperity rests upon political foundations. Proximately, prosperity is generated by investment and innovation, but these are acts of faith: investors and innovators must have credible reasons to think that, if successful, they will not be plundered by the powerful.
How Much Is Investment Management Worth?
The question comes up a lot because there are several variables to consider. Like so many aspects of finance and economics, the answer is dependent on market conditions, the particulars of the strategy, the investor’s expectations and assumptions, the time horizon, and so on. Even when the main issues are nailed down, there’s still plenty of debate for deciding what’s a fair price. It may be reasonable to pay above-average fees—perhaps even a lot above average—for certain types of management services, but the opposite tends to be the prudent rule due to our old nemesis: uncertainty about the future.
New Unemployment Claims Drop To A New 4-Year Low
New filings for unemployment benefits dropped to another post-recession low last week, the Labor Department reports. The case for expecting economic growth, in other words, just got a bit stronger.
Strategic Briefing | 3.22.12 | Is The Euro Crisis Over?
Draghi Says Worst of Debt Crisis ‘Is Over,’ Bild Reports
Bloomberg | Mar 21
European Central Bank President Mario Draghi said the worst of the sovereign debt crisis is over, Germany’s Bild newspaper reported, citing an interview. “The worst is over, but there are still risks,” Draghi was quoted as saying. “The situation has stabilized. The important indicators for the euro zone, like inflation, current account and above all the budget deficits, are better than, for example, in the United States.” Investor confidence has returned and “the ball is now with governments,” Draghi said, according to Bild. “They must sustainably secure the euro zone against crises.”
Expecting Growth… And Inflation?
The recent pop in the 10-year Treasury Note’s yield—up about 40 basis points this month to ~2.4%–has inspired cries that the end is near. One Wall Street analyst lamented that the recent pop in this rate was a sign of rising inflation expectations and that this was something to worry about…NOW! He also recognized that the market’s repricing of Treasuries for higher yields also reflected a brightening economic outlook. But he couldn’t see that the two trends are, in fact, connected these days because the new abnormal continues to rule.
Housing’s Uneven Recovery In February
Is the housing market recovering? Yes, but it’s slow and uneven. That’s the message in today’s update for February housing starts and newly issued building permits. Residential construction continues to revive, and that’s a positive for the wider economy, although the revival is modest.
Strategic Briefing | 3.20.12 | Oil Prices
Oil Drops From Three-Week High on Speculation of Rising Supplies
Bloomberg | Mar 20
Oil dropped from the highest price in almost three weeks in New York on signs U.S. crude supply is rising and speculation that Saudi Arabia may boost output…. “The market is currently well-supplied with oil, but supply disruptions and looming supply shortage from Iran is keeping uncertainty high,” said Hannes Loacker, an analyst at Raiffeisen Bank International AG (RBI) in Vienna who predicts U.S. futures will average $104 this year. “Without an intensifying Iran conflict, further price gains aren’t justified.”
A Big Week For Housing Reports
Late last year, I wondered if the housing market was finally in a recovery mode. There was a modest case for thinking positively then, and there’s been encouraging news so far in 2012. Will it last? This week’s scheduled updates on several housing measures may provide an answer.
Book Bits For Saturday: 3.17.2012
● The Race for What’s Left: The Global Scramble for the World’s Last Resources
By Michael T. Klare
Interview with author via Democracy Now!
We look at rising fuel costs, one of the major issues raised by the Republican contenders in the 2012 presidential campaign. Since the beginning of the year, the average of price of a gallon of regular gasoline has jumped 16 percent to more than $3.80. Earlier this week, President Obama partially blamed his Republican rivals, saying one reason for the increase is rumors of war with Iran. Meanwhile, Republican candidates have used the spike in gas prices to attack President Obama’s rejection of the Keystone XL tar sands oil pipeline and his stance on expanded domestic oil drilling. Our guest, Michael Klare, says oil prices are destined to remain high for a long time to come because most of the remaining oil on the planet is no longer easily accessible.
Industrial Production Flat In February But Annual Pace Turns Up
Industrial production was unchanged in February, the Federal Reserve reports. That’s bad. But the year-over-year pace for industrial production rose slightly—that’s good.