Wednesday, February 28, 2007
3% Market Move
This was the first time in many years I've been in the US with a 3% market move. Lot's of gab.
Tuesday, February 27, 2007
Monday, February 26, 2007
Look at Recent History with Japan to Understand China
Larry Summers was the under secretary to the Treasury and negotiated trade and market opening with Japan in the early 90's.
Sunday, February 25, 2007
Saturday, February 24, 2007
Winner take all Society - Academia
Academia, not just corporate CEO's, investment bankers and sports stars benefit with the concentration of knowledge and access to capital.
Friday, February 23, 2007
The Fed Looking at Hedge Funds
The Bush administration has rejected more oversight of hedge funds but the regional Fed Branches are increasing their understanding.
Japanese Shareholder Activism
Local boy Scott Callon leads a Japanese shareholder fight to victory. Tokyo Kohtetsu is up more than 30% since Ichigo began buying.
The articles are also revealing about press relations. The WSJ journalists are good and sympathetic friends while the NYT (Reuters story) gets the bio all wrong.
The articles are also revealing about press relations. The WSJ journalists are good and sympathetic friends while the NYT (Reuters story) gets the bio all wrong.
Thursday, February 22, 2007
Yellen on Housing
SF Fed's Yellen on the housing problem:
"The bottom line for housing is that the concerns we used to hear about the possibility of a devastating collapse—one that might be big enough to cause a recession in the U.S. economy—while not fully allayed have diminished. Moreover, while the future for housing activity remains uncertain, I think there is a reasonable chance that housing is in the process of stabilizing, which would mean that it would put a considerably smaller drag on the economy going forward."
"The bottom line for housing is that the concerns we used to hear about the possibility of a devastating collapse—one that might be big enough to cause a recession in the U.S. economy—while not fully allayed have diminished. Moreover, while the future for housing activity remains uncertain, I think there is a reasonable chance that housing is in the process of stabilizing, which would mean that it would put a considerably smaller drag on the economy going forward."
Tuesday, February 13, 2007
Health Care in China
Bill Hsiao of Harvard tries to improve Chinese rural healthcare by spending 4.50 dollars per year. This puts all the verbage about inequality and healthcare in America in perspective.
Friday, February 09, 2007
What Inequality Matters?
The Economist points out that sibling inequality accounts for three quarters of all US inequality and inequality among nations is high
Harvard Management
Mohamed El-Erian spoke at the Harvard Club of New York yesterday.
Why do Endowments outperform?
1) Simplicity of Mission
Enhance and preserve the purchasing power of the endowment
Endowment pays for 30% of the running costs of the university.
Pays 15% of the financial aid - but the absolute dollar amount has doubled over last five years.
2) Permanent Capital
Long investment horizon
AAA rating.
3) Right asset allocation versus the right amount of return and risk.
Right Vehicles
Right risk management
What is Changing
1) Vehicles are changing
What are the borders among geographies and instruments?
Derivative products have reduced barrier to entry (exotic mortgages make home buying easy)
ETF's have made international investing cheap
2) Risk factors are evolving
What are the new risk factors
Sovereign risk has decreased - how to measure emerging market risk?
As sovereign risk has decreased bottom up opportunities are available in many markets.
3) Asset allocations are changing
The Environment is Different
1) Huge imbalances
Trade and capital flows
2) Realignment of the global economy
Huge wealth transfer
Commodity prices and cheap labor have moved wealth to the poor but
"the irony of our times is that the poor countries are using surpluses to fund rich countries"
The hybrid model of management
Internal versus external.
Internal
AAA rating
permanent capital
Capacity of managers
External
Expertise
Cannot play catch up
Cannot pay thru distribution of equity
Nor can the enterprise value of the organization be realized.
Why do Endowments outperform?
1) Simplicity of Mission
Enhance and preserve the purchasing power of the endowment
Endowment pays for 30% of the running costs of the university.
Pays 15% of the financial aid - but the absolute dollar amount has doubled over last five years.
2) Permanent Capital
Long investment horizon
AAA rating.
3) Right asset allocation versus the right amount of return and risk.
Right Vehicles
Right risk management
What is Changing
1) Vehicles are changing
What are the borders among geographies and instruments?
Derivative products have reduced barrier to entry (exotic mortgages make home buying easy)
ETF's have made international investing cheap
2) Risk factors are evolving
What are the new risk factors
Sovereign risk has decreased - how to measure emerging market risk?
As sovereign risk has decreased bottom up opportunities are available in many markets.
3) Asset allocations are changing
The Environment is Different
1) Huge imbalances
Trade and capital flows
2) Realignment of the global economy
Huge wealth transfer
Commodity prices and cheap labor have moved wealth to the poor but
"the irony of our times is that the poor countries are using surpluses to fund rich countries"
The hybrid model of management
Internal versus external.
Internal
AAA rating
permanent capital
Capacity of managers
External
Expertise
Cannot play catch up
Cannot pay thru distribution of equity
Nor can the enterprise value of the organization be realized.
Tuesday, February 06, 2007
Former Treasury Secretaries Sounding More Reasonable
Snow is the voice of reason on SS and SOX now that he is out of office. Just raise the cap on ss. SOX is not that bad; "You do not want to (weaken) corporate governance reform in the face of corporate scandals."
Why aren't companies like the NBA?
I thought it would be more efficient if all salaries were revealed. Here the economist tells why it might never happen.
Monday, February 05, 2007
Globalization and Inequality
Tim Worstall sums up the two "problems "of Globalization and Inequality.
"Yet in this particular instance I find that my own answer is quite simple. Those poor who are getting richer in other countries are not moving from one level of luxury to a slightly higher one. They are moving from destitution, from not knowing where the next meal is coming from, to something close to a middle class income. They are doing this in their hundreds of millions, across the globe, and that has to be a good thing."
Brad Delong agrees with this but still outlines "an unequal society cannot help but be an unjust society" because of the fact the some are able to capture more than they deserve.
And the Angry Bear thinks it is too simple an explanation.
Greg Mankiw adds
To what extent is inequality of outcomes a source for concern in and of itself?
And Bernake
adds the point in his speech "The Level and Distribution of Economic Well-Being" that inequality has increased in all professions, including professional sports.
Therefore something more subtle is going on than rich CEO's paying themselves.
"Yet in this particular instance I find that my own answer is quite simple. Those poor who are getting richer in other countries are not moving from one level of luxury to a slightly higher one. They are moving from destitution, from not knowing where the next meal is coming from, to something close to a middle class income. They are doing this in their hundreds of millions, across the globe, and that has to be a good thing."
Brad Delong agrees with this but still outlines "an unequal society cannot help but be an unjust society" because of the fact the some are able to capture more than they deserve.
And the Angry Bear thinks it is too simple an explanation.
Greg Mankiw adds
To what extent is inequality of outcomes a source for concern in and of itself?
And Bernake
adds the point in his speech "The Level and Distribution of Economic Well-Being" that inequality has increased in all professions, including professional sports.
Therefore something more subtle is going on than rich CEO's paying themselves.
Sunday, February 04, 2007
It's not the End of the World
Francis Fukuyama uses what once was my favorite quote. And the Economist strikes a rare positive note in "You've Never had it so Good".
Saturday, February 03, 2007
Headline: Politician Speaks the truth
Chirac speaks the truth about Iran, and then is force to retract it. At this point only containment will work. The only other recent example of this kind of straightforwardness is Gavin Newsom.
Thursday, February 01, 2007
Inequality is not the most important problem, wealth creation and poverty elimination are more important.
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