Death Spiral Financing

Wikipedia defines death spiral financing as a process in which convertible financing used to fund primarily small cap companies can be used against it in the marketplace to cause the company’s stock to fall dramatically, which can lead to the company’s ultimate downfall. While generalization is fraught with risk, typically companies require multiple financings to … Continued

Why is Pay Lagging?

With the unemployment rate at approximately 4%, the lowest since 2000, economists have been surprised by the slow growth in paychecks.  Historically, when that few people are unemployed, companies have had to pay up to attract workers. Clearly, anecdotal evidence and government reports suggest that the U.S. is in a tight job market, yet pay … Continued

The EV Dichotomy

Following a recent visit to India, I came away with several pertinent climate and energy observations. Traffic in major cities, such as Delhi and Mumbai, is very difficult. Air quality is bad.  In the morning, visibility from my hotel room window was generally less than one mile.  While some improvement developed during the day, the … Continued

Doing Nothing

During periods of above average market volatility, or sharp moves in either direction, investors and advisors are likely to wonder if some action might be appropriate or expected.  This natural reaction may be exacerbated by an endless stream of punditry and suggested strategies from CNBC and other media outlets. In most cases, the most appropriate … Continued


According to Wikipedia, misdirection is a form of deception in which the attention of an audience is focused on one thing in order to distract its attention from another.  While misdirection has generally been associated with magicians, CEOs have not been immune to the opportunity. Investors should be careful in reacting to corporate announcements that … Continued

Deficit Spending

It is now clear that congressional budget compromises are an excuse to spend more on everyone’s wish list rather than to make hard decisions regarding appropriate priorities. Running up the deficit is not a recent phenomenon.  Adding to the national debt has been the reality of both political parties for a long time, as no … Continued

Everybody Has a Plan…

The full quotation, attributed to Mike Tyson is, “everybody has a plan until they get punched in the mouth.”  While Mr. Tyson was obviously talking about boxing, the same concept is probably equally relevant to investing.  A sudden and sharp correction in the stock market, can feel like kick in the stomach. Most investors start … Continued

Labor-Force Participation, Revisited

We have previously discussed the importance of labor-force participation (see blog from 09 Jan 2018).  The recently reported February jobs report was probably about as good as it gets. Nonfarm payrolls grew by 313,000, the unemployment rate held steady at 4.1%, wages grew by a too modest 0.1% and, most important, the labor-force participation rate … Continued

Responsible Government

Often, governments start out trying to be all things to all citizens.  Unfortunately, governments have a history of falling short on initial promises for a variety of reasons including, political bickering and trying to do too much at the cost of often not doing some things well. One might think that providing its citizens with … Continued

Saber Rattling

According to Wikipedia, saber rattling originated in Chile in 1924, when a group of young military officers protested against the political class and postponement of social measures by rattling the scabbards of their sabers against the floor. The term is now applied to cover any indication of military aggressiveness. Saber rattling currently can include such … Continued


Uncertainty describes a situation without a straight forward description involving ambiguous and/or unknown information. Markets don’t like uncertainty. Markets tend to over react in the near term, as traders attempt to get ahead of any suggestion of a possible change in sentiment. Recently, markets reacted sharply to an announcement relating to the possibility of new … Continued


In September 1986, “The Economist” introduced the Big Mac Index, as a semi-humorous illustration of purchasing power parity (PPP).  PPP provides a test of the extent to which market exchange rates result in goods costing the same in different countries.  The objective was to attempt to make exchange-rate theory a bit more understandable. PPP can … Continued