After a terrible 1990s (Bulls won 9 years to 1) the Bears scored a rare trifecta in 2000-02, with the New York stock market down in each of the three years. Since then, Bear life has been less satisfactory, but on the decade so far, counting 2006 as a Bull victory, the Bears lead 4-3 […]

The World Bank gave the developing world an unexpected Christmas present Wednesday, when it unveiled its annual “Global Economic Prospects” report, looked out to 2030 and projected a higher developing country growth rate than in 1980-2005 and a huge emerging Third World middle class. Since it’s the job of the Bear’s Lair to deflate unwarranted […]

In spite of Fannie Mae’s $7.9 billion earnings write-off for the years to 2004, and failure to provide accounts for the last 7 quarters, the stock is substantially up during 2006, and analysts are mostly recommending it. This reflects a particularly counterproductive habit of financial analysts and economic commentators: they assume that the future will […]

The Financial Times Thursday suggested that private equity might increasingly dominate the world’s capital markets, because it enabled a tighter rein to be kept on company management, and thus ensured better governance in the interests of shareholders. That’s why private equity values for companies are higher than public market values, according to the FT. If […]

The announcement this week that the governments of the world are to spend $13 billion building the ITER experimental nuclear fusion power plant in France seems at first glance cause for mild celebration, even though fusion power is expected to be commercially available only in 2045. On closer inspection however it’s an opportunity missed, an […]

It’s an interesting term – risk management. It sounds so organized and reassuring. A risk that is managed is tamed, brought within well understood parameters and reduced to a level that shareholders can tolerate. Investment bankers and their tame economists constantly tell us that the derivatives market has reduced risk in the financial system and […]

The Hong Kong based financial commentator Mark Faber, as reported by the Economist, believes that high commodity prices cause wars; by funding unattractive rent-seeking governments and starving more productive economies of resources. Since it’s clear that low interest rates have in the present cycle been a major cause of high commodity prices, it’s worth adding […]

Neither party has been exactly forthcoming about its potential economic policy after Tuesday’s Congressional elections. However, since the Democrats seem likely to control at least the House of Representatives, I thought it worthwhile to look at where their policies might differ from those in place. A “Back to the Economy” seminar October 30 hosted by […]

In a world in which information is an increasingly important commodity and intellect is the principal means of producing such information, David Ricardo’s 1817 Doctrine of Comparative Advantage may no longer be valid. However the theory that free trade enriches all participants, central to modern globalization, depends crucially on Ricardo, with protectionists being denounced (sometimes […]

Since the recent drop in oil prices, the market appears convinced that we have seen the last of their stratospheric rise – the NYMEX oil futures contract remains under $70 per barrel for the next 2 years, for example. However the free market economists’ theory that supply will always arrive to meet demand increases is […]