The Bowtie Economist's Daily Dose of 70-Word Wisdom


Return to Drachma

05/10/2011

Greece must leave the Euro! Argentina (Arg) shows why. From ’98 through ’01 Arg was in a bad recession; the Peso was pegged to the USD. Arg borrowed from the IMF cut spending and the economy tanked. Then Arg defaulted…

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Greek Tragedy

05/09/2011

The Greek 10-yr gov’t bond yield is 14.7%, 11.5% above comparable German bonds. The 2-yr Greek note is trading at 22.2%, 20.45 % above the German 2-yr note. The cost of insuring Greek sovereign bonds jumped to 1,422 basis points…

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Excellent Employment!

05/06/2011

Hallelujah! The economy gained 244K jobs in April! Payroll data for Feb and March were also revised up by a combined 46K! Hiring in the private sector posted the largest increase in 5 years and was broad based! Ignore the…

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Art Brushes Up

05/05/2011

Like the Dow Jones, the art market is also hitting new postcrash highs. Sales peaked in ’07 when Christie’s and Sotheby’s sold $11.3 billion of art. That total fell to $4.8 in ’09 but jumped to $9.8 in ’10. And…

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Costly Crown Celebration

05/04/2011

Economists, those killjoys, are busy adding up the cost of the UK royal wedding, and all associated matrimonial festivities. At one end an economist thinks it will knock 1.5% or $15 billion off UK GDP as that equals one day’s…

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UPS Earnings: Up but Down

05/03/2011

UPS released its earnings last week. Volume fell here but grew overseas. Pricing power in the US was good and revenue surged despite weak volume because big investments in technology resulted in worker hours falling 2%. UPS mgt also had…

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Bin Laden Dead, Markets Shrug

05/02/2011

The death of bin Laden is a non-event in the markets. Had there been a rally, the US dollar, precious metals and commodities should all have weakened and stocks should have rallied as investors moved from safe havens to riskier…

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Startups Create Jobs

04/29/2011

The perception is that small business creates most new jobs. NO! The best predictor of job creation is age of firm. Younger firms create more jobs regardless of size. New firms operate in a volatile “up or out” environment. After…

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Affordable Foreclosures

04/28/2011

A key reason why new home activity has fallen off sharply is because new homes are now about 30% more expensive than existing ones; double the typical margin. Foreclosures and short sales accounted for 40% of all sales in February…

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China to Surpass USA in ’16

04/27/2011

27 The IMF has determined that China’s economy will surpass ours in 2016 – in 5 years! Many have said it will happen in the mid 2020s; they are wrong. 1) The Chinese currency is massively undervalued. 2) Using Purchasing…

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