Le Rouge Et Le Noir

The Cowboy had the opportunity to speak with the Managing Editor of  The Economist this week; he even had his picture taken with him.  You can see the photograph of us at the end of this post.

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Published in: on May 1, 2009 at 21:00  Comments Off on Le Rouge Et Le Noir  
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Ein Prosit Der Gemütlichkeit

The Reinheitsgebot is 493 years old today.  Alles Gute zum Geburtstag!

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Published in: on April 23, 2009 at 21:18  Comments Off on Ein Prosit Der Gemütlichkeit  
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Wolf & Bears

The trail has been a bit rocky for the last week.  Between challenging riding conditions and dark nights, it’s been tough to do much writing.

There have also been some tense standoffs in the high country:

Here’s Wolf’s column in yesterday’s FT.  The Cowboy likes his analysis and agrees with his assessment.  (Here without registration.)

Money quote:

“Is the worst behind us? In a word, No. The rate of economic decline is decelerating. But it is too soon even to be sure of a turnround, let alone of a return to rapid growth. Yet more remote is elimination of excess capacity. Most remote of all is an end to deleveraging. Complacency is perilous. These are still early days.”

The Cowboy gave his view of green shoots a couple of weeks ago.

We’re all taking turns with the carcass of the financial system.  Despite some bullishness in the markets, the Cowboy agrees with Wolf that from a macroeconomic perspective, the bears have the advantage and they’re not done picking at the carcass.

Published in: on April 23, 2009 at 11:30  Comments Off on Wolf & Bears  
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Nip / Tuck

Nice guys, those plastic surgeons.With every one trying to pay down debt, we’re trapped in a vicious cycle.  If we’re all getting liposuction, eventually there’s no need for plastic surgeons.  So, it’s great that we’re on a diet and everything – suddenly concerned about our past excesses.  And it’s okay that we want to look good.  But how do we maintain that healthy weight?  How do we stop our anorexic spiral?  And what about those poor surgeons?

I know – weird analogy, but it’s what came to me.  Richard Koo, the Chief Economist at the Nomura Research Institute (part of one of Japan’s major conglomerates that includes Japan’s best known, eponymous securities firm), did a presentation last month that has been floating around the economic dens of iniquity.  There has been much talk for a while about the “balance sheet recession” that Koo describes.

With all of the talk about Japan’s lost decade, and how the current crisis has so many similarities, Koo lays out a comparison very nicely.  He even tosses in some Asian vaqueros by the names of Yin and Yang (one wears a white hat, the other a black one).

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Published in: on April 10, 2009 at 15:30  Comments Off on Nip / Tuck  
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Finale: Keep Your Balance

Part 4

We keep reading that as a big lender to the U.S., China has this immense power.  Well, how does it use that power?  Any banker knows this game.  If you have loaned a lot of money to someone, you can ask for it back, but that may not be in your best interest.  Why?  First, you have to find someone else to borrow it with an equivalent risk/return profile, and second, you might not get it back at all.

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Published in: on April 8, 2009 at 20:59  Comments Off on Finale: Keep Your Balance  

Rocky Road

Part 3

Now don’t get too comfortable, the trail keeps going for a bit.

As we asked in the last post, why would the Chinese government want to deprive its citizens?

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Published in: on April 8, 2009 at 20:48  Comments Off on Rocky Road  

Following The G2 Trail

Part 2

In the Cowboy’s humble estimation, the column that presents sounder economic thinking is Martin Wolf’s on the same page as Taleb’s piece (here without registration).  Perhaps the biggest disappointment of the recent G20 conference is that it was not the Bretton Woods redux that many had hoped for last Fall.  Clearly, the goal of this one-day conference was not to rewrite the rules for the global economic system.  Such grandiose aims were wisely scaled back.  Evaluated as a one-day meeting of 20 countries, however, the Cowboy would call it a success.

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Published in: on April 8, 2009 at 20:43  Comments Off on Following The G2 Trail  

Swans On The Trailhead

Part 1

On the heels of yesterday’s silly Easter-egg hunt, today the Cowboy wants to follow a trail of a different kind.  By the way, the object of yesterday’s hunt was to find the beginning.  Don’t work too hard.  Think simple, not complex.  Just follow the trail.

Nassim Taleb has a column in today’s FT (here without registration) that is being promoted extensively by the newspaper and will inevitably get lots of play.  Taleb is the author of the economics bestseller and seemingly prescient book on the “long tail” of statistical distributions – in other words, those very unlikely events that can, and sometimes do, occur.  Taleb raises a number of very controversial points, so one can expect to see his column discussed widely.

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Published in: on April 8, 2009 at 20:29  Comments Off on Swans On The Trailhead  

Can You Solve The Easter Puzzle?

Part 1

If you are a careful reader of the Cowboy, you will realize that this posting was inevitable.  If you’re not in on the joke, “search and ye shall find.”

Since the Cowboy likes to play around with economics, let’s start there (and don’t get picky about the spelling):

There once was a man from Lausanne,

Who Auguste liked to call Léon.

Because of his trumpeter,

A man named Joe Schumpeter,

He was able to pass his baton.

He was saved from opprobrium

With gen’ral equilibrium.

His teaching was Marginal

His student, Pareto optimal,

But his parts never exceeded his sum!

Poem by the Cowboy.

(to be continued)

Published in: on April 7, 2009 at 16:48  Comments Off on Can You Solve The Easter Puzzle?  

Chasin’ Down that Global Slide

The financial whiz-kids went wild

“Down a back road
Long, hot summer
A couple kids runnin’ loose and wild
He kissed her
She said mister,
Take an inch and I’ll give you a mile”

There were some attempts to rein them in, but they responded forcefully:

“I ain’t here to do anything half-way
Don’t give a damn what anyone might say
I just wanna free fall for a while”

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Published in: on April 2, 2009 at 21:47  Comments Off on Chasin’ Down that Global Slide