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The Bear's Lair: Are we better off than in 2000?

August 25, 2014

The NASDAQ Composite Stock Index this week broke out to 14-year highs, reaching levels not seen since March 2000. It came within 10% of its all-time closing peak of 5,048.62 on March 10 of that year (by the end of that month it was already below current levels.) At that time I thought, along with many commentators, that absent major inflation we would not see that NASDAQ level again in our lifetimes, unlike the Dow Jones and S&P 500 indices. It is thus worth pondering why the index had reached such nosebleed levels again, and what about today's environment might justify higher valuations than in 2000.

Reflexivity, Bubbles and Profits

August 23, 2014

Market "risk on" - in the face of a risky and unstable world.

The Bear's Lair: The emerging markets picture darkens

August 18, 2014

Ever since the fall of Communism and the rise of the Internet, future growth has appeared to lie in emerging markets. Modern communications have made it much easier for multinationals to run international supply chains that take advantage of their abundant resources and cheap labor, while emerging markets people have become far more connected to the world economy, to their great advantage. Yet just as globalization itself has begun to reverse, as I discussed last week, so the era of emerging markets emergence may be coming to a close—at least for the next decade or so.

The Bear's Lair: Has the globalization clock gone Bolivian?

August 11, 2014

Fifteen years ago, it appeared that globalization was the most important trend of our time, and was irreversible. Since then, the Doha round of trade talks has been stalled for years and even the modest progress trumpeted last December has been blocked by India, home of a new government supposedly dedicated to the free market. Has the globalization clock, like that on the Bolivian Congress, gone into reverse? And does this have deeper implications for the time-direction of the world economy in general?

The Bear's Lair: Scotland's too small but Britain's just fine alone

August 4, 2014

As an instinctive opponent of Scottish independence but supporter of Britain leaving the EU, I have to face an epistemological reality: the two positions are at first sight inconsistent with each other. As a rational man, I find that disquieting, so I thought I'd look at the economic effects of both moves and determine whether, economically at least, my instincts were right or whether ethnic sentimentality had overwhelmed me.

The Bear's Lair: Is business a force for free markets?

July 28, 2014


Traditionally, business was the most important political backer of free markets, which made sense because business needs markets in order to exist at all. However, in the last generation, the views of business, as expressed by the U.S. Chamber of Commerce and other outlets, have increasingly diverged from the free-market ideal. As crony capitalist ideas have come to dominate business thinking, so crony capitalism itself has come to dominate the U.S. economy, with dire results for productivity growth and the living standards of Americans.


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