26 December 2007
I like perusing the classified ads in La Nación. La Nación is the big, serious daily newspaper in San Jose, Costa Rica. Like all dailies down here it’s a tabloid. By calling it the "serious" paper, I mean there is less rolling girl-flesh in the photo features and the front page lead generally doesn’t involve a shootout or car wreck. There is a smaller, though still extensive, treatment of soccer and bicycle racing than you will find in the competition. A big editorial section features articles by the country’s president, . . . → Read More: Miami Realtor Reaches Out to Third World Speculators
31 October 2007
Inflation, diluting the money supply with worthless tokens, either by borrowing money into existence or by printing it, transfers wealth from the people who produce it to people who use it to buy political power. It’s a nasty, pious fraud, but the real harm goes far beyond the immorality of simple theft and power mongering. The most dangerous aspect of inflation is the corrupting effect it has on the character of those who use it.
As in all political games, inflation has winners and losers. The losers are savers, whose . . . → Read More: Moral Hazard on the Rise
22 August 2007
Fed interference in the markets appears on the surface to benefit everyone. A bailout is a bailout, right? That’s not how it works in reality, however. There are always bettors on both sides of the bet. The Fed’s last intervention, at the last possible moment before index options expired, hammered those who were betting the markets would fall. You have to wonder if those who were bailed out got to take a nice fat options position the night before. And how much they "donated" to political candidates last season.
MORE HERE>>>>>>>> “Bernanke Put” . . . → Read More: Even Bailouts Have Winners and Losers
26 June 2007
Asset bubbles are the result of easy credit and a natural human desire to get something for nothing. The long-term increase in all prices and the occasional price explosion for certain assets occurs primarily because there is no standard for the unit we use to measure value. The dollar is an article of faith, undefined, as ethereal as fairy dust. Tinkerbelle, like the dollar, flies only if we believe she can.
The dollar represents no fixed amount of a hard-to-find commodity, like gold or silver. The value of every existing dollar is . . . → Read More: Selling the Sizzle
21 March 2007
Real estate is still a topic of great interest both here in Costa Rica and there in sunny Key West. As I am inclined to look back in time to satisfy my curiosity about the future, I found the following graph interesting. It shows the history of housing prices in the United States for the last 110 years. Robert Shiller put it together for his book, Irrational Exuberance.
In this column I’ve made no secret of my doubts about opinions so popular they achieve the status of . . . → Read More: Returning to the Mean