Notes on the Week Ahead

A tumble without a theme

It’s early Monday morning and I have writer’s block. This is a little frustrating because I should have lots to write about. Last week saw a surge in volatility with the S&P500 falling by 5% on Wednesday and Thursday combined. Even with a rally on Friday, large cap U.S. stocks have now fallen in seven of the last eight sessions.

The case of rising rates

The great detective stands in front of the drawing-room fire, twirling the ends of his moustache as he ponders the Case of the Rising Rates. He knows who committed the crime – but what to do about it? He surveys the four suspects arrayed on the sofas before him, Inflation, Growth, The Deficit and The Fed. He clears his throat.

Balance at takeoff, landing

I have flown enough over the years to have experienced most normal things that happen on planes. From time to time, I’ve been on smaller, regional jets and when, by chance, they are only half full, I know the routine.

The asset arcade

It is some years now since I have been a regular patron of our local arcade, but I have always been fascinated by the financial transactions by which it is maintained.

The problem with populism

A few years ago, I read a tragic story in a local newspaper about a young man who was walking along the train tracks with his earphones blasting loud music. Far ahead, he could see a train hurtling towards him and people on the side of the tracks were yelling and waving to get his attention. He ignored them, he had plenty of time to move … and then he was instantly killed by a train coming the other way. As we head towards the mid-term elections, America is bitterly divided politically, and many investors worry that "Chaos in Washington," variously defined, will cause the market to crash.

Fixing the roof and making hay

I was in a meeting recently discussing asset allocation when a much-esteemed British colleague suggested that a certain strategy was like "fixing the roof while the sun shines." Growing up in agricultural Ireland, I had always heard something slightly different, namely that you should "make hay while the sun shines." Truth be told, the sun so rarely makes an appearance in the British Isles, that when it does, the temptation is to down tools, grab a book and a beer and soak in the rays.

The investment implications of a return to 2% growth

Like most people, I have my minor obsessions, and one of them is a never-ending quest to run faster. A few weeks ago, I saw a story about some running shoes that would let you run 4% faster (or rather use 4% less energy when running which amounts to roughly the same thing). I had to get a pair.

The flight to Jackson Hole

I get to fly far more than I would like for my job and air travel today in the United States is no picnic. Everyone talks about the hassle of the security lines. But the real problem is the boredom – sitting for hours in a seat with little contact with the outside world or useful distractions. However, the one advantage of a long flight is that it does give you time to think.

Getting the test back

When I was in school, one of the most agonizing periods was the time between taking an exam and getting it back. This strange, uncomfortable time would end in one of two ways. If I did well, it would generate a sort of positive momentum for my studies. On the other hand, if I did poorly, there would be an element of discouragement that weighed on my desire to engage. The U.S. economy submitted its July exam a few weeks ago; this week, we’ll get our first peek at whether the solid U.S. growth momentum seen in the second quarter carried over into the third, and what it might suggest for the broader trajectory of global growth.

Organizing the international desk

I am, I suppose, somewhere in the middle of the pack when it comes desk organization. Somewhere, that is, between a "compulsive." whose desk is clean except for a small symmetrical pile of papers beside a cup of well-sharpened pencils, and a "chaotic." whose workspace looks like the emptied-out contents of a half dozen waste-paper baskets. The problem, of course, is how to impose some organization on the mountain of things you really should read or think about. I mean, where do you even start? I used to have the same problem when it came to describing the U.S. financial environment.