08.13.09

With Wall Street - and the Federal Reserve - in a headlong rush to declare the recession over, the economic data has indicated that the simple binary recession-no recession framework obscures more than it reveals. Yes, defined purely in terms of Gross Domestic Product (GDP), the recession looks to be winding down, with strong indications that GDP is about to turn positive after a long and painful swoon. Read more…

07.16.09

With a slew of major companies reporting earnings so far, it’s clear that expectations were severely skewed to the negative. Once again, Wall Street analysts overshot - this time to the downside. The substantial margin expansion reported by Intel; the higher-than-anticipated profitability of IBM; and the blow-out quarters of Goldman Sachs and JP Morgan all stand in contrast to sentiment just a few weeks ago, which was grim and getting grimmer. So what happened? Read more…

02.17.09

The financial markets are again getting pummeled, both domestically and globally; the nearly $800 billion stimulus package signed with fanfare by President Obama has done little to alter the mood. In fact, if you read through financial websites and assorted blogs on politics, economics, or anything related to those, you will find a nearly endless sea of misery. The level of anger, pessimism, despair, and sheer hopelessness seems to reach new peaks every week, in inverse relation to the movement of global equity prices and the size of individual retirement accounts. Read more…

01.20.09

If you were not one of the 2 million people watching the inauguration on the Mall in Washington, you could watch the spectacle on any number of television channels. Flipping between ABC, CBS, NBC and PBS would have yielded different commentary but largely the same mood: euphoria, awe at the magnitude of electing the first African-American president, and somber urgency about what confronts our financial system and the world. Yet, even as Obama warned of a difficult road, the crowds were wildly enthusiastic, and millions were moved. Main Street has turned a corner. Read more…

12.15.08

Everyday, my mailbox gets inundated with reports from strategists and economists. Two years ago, most were predicting a fairly rosy scenario for the global economy - and to be fair, so was I. Today, most are predicting a dire future of negative growth and economies mired in a deep and intractable recession. The predictions of the past were mostly wrong; there is little reason to believe that today’s forecasts will be much better. Read more…

11.21.08

So here we are once again on the precipice, at least in terms of global stock markets and credit markets. Another bout of nail-biting panic is hardly unexpected, though it’s always surprising when otherwise sane people veer sharply into hysteria. It’s a good, albeit painful, reminder that the bonds of what we call civilization are always more tenuous than we would like to believe, that things like “value” and “worth” and “the economy” are ultimately the products of human beings simply agreeing on a set of rules. Stocks, bonds, gold, silver, none have any intrinsic value, nor do Gucci handbags, Deere lawnmowers, and GM trucks (in case anyone was wondering about that one). We act as if they do, because it gives us some sense of an orderly world, and because the alternative is just too unsettling to live with on a daily basis. Read more…

10.24.08

We are now in the season of scapegoats. The brays for justice and villains grow daily, and this week has seen a walk of shame as various participants in the credit debacle sit in front of Congress to be scolded and upbraided for their sins. Many of the goats today, and none more than former Chairman of the Federal Reserve Alan Greenspan, were heroes only a short while ago - yet another vivid illustration of the ancient words of the mythical king Croesus: “Count no man happy till he’s dead,” or to put it another way, “it ain’t over till it’s over.” Read more…

10.21.08

first published in Newsweek Oct. 18th

You’ve heard the story. On the heels of tumbling shares and dire warnings from the U.S. president, as well as business and government officials across the globe, the British prime minister says, “The world economy is facing its greatest risk in decades.” To halt the slide, he calls for a global response to prevent the crisis from spiraling out of control. Read more…

09.30.08

As of today, the global financial system is gripped by panic. In the past two weeks since the bankruptcy of Lehman Brothers, the fear and chaos have accelerated dramatically, and the failure of Congress to pass its proposed $700 bailout bill on Monday unleashed a new wave of panic. That is the situation we find ourselves in now, with safe havens almost non-existent save for those betting against the market completely, or who have retreated to cash. Relief rallies there may be, but this is a market in the grip of animal spirits stampeding for the exits. Read more…