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The Real Payroll Numbers

August 7, 2012 Leave a comment

While overall unemployment remains high in the US, here’s an amazing revelation few are talking about:

Change in Payrolls Since June 2009 (End of Recession)

Private Payrolls:                +3,212,000

Government Payrolls:         -618,000

Source: Thomson Reuters, US Bureau of Labor and Statistics

Effectively, the private sector is staging a comeback few appreciate, whereas the jobs contraction largely has been at the federal, state and municipal levels.  For more information on the payroll numbers, check out this recent article on Fisher Investments MarketMinder:  Donkeys, Elephants, and Employment

 

The Path to Cheaper Healthcare Starts with Information

July 19, 2012 Leave a comment

If you wanna lower the cost of healthcare, it ain’t gonna come from insurance machinations or government mandates. It’ll come from the private sector, and it will come from the efficiencies of information technology, creating competitive prices:

“Imagine going to a supermarket where none of the prices was posted or checking into a hotel without knowing the room rate. That, in a nutshell, is what purchasing health care is like for millions of Americans covered by private health insurance. Your doctor tells you to get an MRI but fails to mention, usually because she doesn’t know, that it’ll cost you hundreds of dollars more to get it at the hospital next door than if you go to the clinic 2 miles away. No one is likely to tell a patient that a colonoscopy performed by the same gastroenterologist can cost $2,800 more at one hospital than another.

“This lack of price transparency costs Americans billions of dollars a year in unnecessary spending. A study by Thomson Reuters’ health care arm put the tab of such wasted dollars at $36 billion annually. Donald Berwick, the former head of the federal Centers for Medicare & Medicaid Services, says the lack of transparency and competitive pricing was responsible for between $84 billion and $174 billion in wasteful spending last year. Americans often pay several times more for MRIs and CT scans than people pay in other countries. “At some point the public will realize that it’s all their money,” says Berwick, now a senior fellow at the Center for American Progress.”

- The Startup That Is X-Raying The Doctor BillsForbes

These sorts of things will be a great boon to consumers in the decades ahead, and will drive down costs in ways we can barely fathom now.

“Ro-ro”? Uh-Oh.

June 21, 2012 Leave a comment

The notion of risk-on/risk-off is so tempting to believe in. But it’s rote nonsense and always has been. There is no lever traders and fund managers pull each day where they all decide today is a “risk on” or “risk off” day.

There are millions of separate interests and views affecting the markets, all days, always. That correlations sometimes go up, and sometimes go down tells you nothing about how anything is likely to behave moving forward. Non-serial auto-correlation has been a fact of investing life basically forever no matter how volatility and correlation spikes or quells.

Also, what’s risky changes! What’s risk today is different than perceived risk a few years ago. Remember when the euro was the safest place to be? Now it’s a risk asset!

Don’t be fooled by this stuff—market cycles see changes in leadership and periodic corrections. Volatility and correlation will do the same.

Today’s Congress More Divided than Ever? Hardly.

April 27, 2012 Leave a comment

I consistently hear from US investors that today’s politics “have never been more divided.” Hardly. One of the many great benefits of studying history is to understand what is truly precedented and unprecedented. David S. Reynolds’s new book offers some insight on what’s been centuries of excoriating debate in the US Congress—often with the country’s very existence on the line. Today is not so new—what’s new is the bluster and shrill of today’s internet and cable media culture.

Statesmanship In a Divided Era – David S. Reynolds

America’s Great Debate: Henry Clay, Stephen A. Douglas, and the Compromise That Preserved the Union – Fergus M. Bordewich

Politics and Intrade

March 6, 2012 Leave a comment

If you haven’t heard of Intrade, read this article: It’s not always right, but over the last decade or so, Intrade has been a fascinating case study in the power of market wisdom. For those market watchers also keeping an eye on political outcomes, bookmark it.

 

A Dose of Optimism

February 7, 2012 Leave a comment

Mark Mills and Julio Ottino’s Op-Ed in the WSJ on Monday, Jan 30, “The Coming Tech-led Boom,” is a must-read for anyone needing a good dose of optimism to combat persistent media hypochondri-nomics.

The Coming Tech-led Boom

A couple teaser paragraphs:

First, demographics. By 2020, America will be younger than both China and the euro zone, if the latter still exists. Youth brings more than a base of workers and taxpayers; it brings the ineluctable energy that propels everything. Amplified and leavened by the experience of their elders, youth and economic scale (the U.S. is still the world’s largest economy) are not to be underestimated, especially in the context of the other two great forces: our culture and educational system.

The American culture is particularly suited to times of tumult and challenge. Culture cannot be changed or copied overnight; it is a feature of a people that has, to use a physics term, high inertia. Ours is distinguished by incontrovertibly powerful features, namely open-mindedness, risk-taking, hard work, playfulness, and, critical for nascent new ideas, a healthy dose of anti-establishment thinking. Where else could an Apple or a Steve Jobs have emerged?

Rest of World Will Drag Europe Up

January 31, 2012 Leave a comment

As said on this blog previously, Europe will surely be weak economically this year, but probably not as weak as many fear. The reason: the rest of the world—which is stronger—will drag it forward.

A prevailing worldview among economists is that a weak region will “infect” the rest of the world. This can sometimes be true, but usually the opposite is true: a stronger rest of the world keeps the weak region afloat. Europe is big, sure, but the rest of the world is far bigger, and that features the US and Emerging Markets—two relatively strong areas.

Recent data is confirming this notion:

January Eurozone Flash Composite PMI Points to Growth, Beats Estimates

Actual: Manufacturing: 48.7, Services: 50.5, Composite: 50.4

Source: Bloomberg

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