Do You Think You Are Pretty Smart? Part I

A number of my trading friends were laughing about the results from  a recent survey of the American people.  They were good at naming The Three Stooges, but did not know basic facts about government.

I posed this very reasonable question:  Who is the second most powerful person in government?

If you are thinking it might be Ben Bernanke, your focus is too narrow.  There is more to government than the economy and the stock market.

The power may well reside with the person closest to the President — one who makes many of the actual decisions and has tremendous influence over who gets access to the Oval Office.  Without access, the President will never hear your story.

Still guessing?  If you ever watched The West Wing, you should know that the Chief of Staff has developed into the most important position.

If you realize the significance of the job, then you might want to know who has this power.  My guess is that fewer than 5% of Americans would recognize the name Joshua Bolten.  More might know Andrew Card because he held the position for 5 1/2 years, an all-time record in this stressful job.

Some think that the Chief of Staff is not as important in the Bush White House because of his ties to cabinet members.  It is difficult for outsiders to judge the power, but Bolten has already earned credit for helping to bring on board key additions to the Bush team, including Hank Paulson.

By the way, the better-known Karl Rove is a Deputy Chief of Staff.

Recession Odds

Market watchers are all interested in the odds of a recession.  You will not get an accurate view from stories making a big splash.  Since an economist is unlikely to be newsworthy by predicting a 10% chance, it is not surprising that Barry Ritholtz’s citations of recession odds predictions ranges from 30% to 70%.  (Roubini is getting a lot of publicity for his extreme viewpoint.)  Unless a reader of these stories has also read the Wall Street Journal economist poll, the impression will be misleading.

Enjoy Barry’s links (and thanks to him for the work even while in Denver).  Then take a look at our comments on the WSJ recession odds.

Link: Rocky Mountain Linkfest!.

Another week, another collection of mayhem: From the Fed pause to the not-so-friendly skys, indices lost between 1-1.5% this week, as investors digested lots of news this week. Surprisingly, the airports were not nearly as problematic as you might have …

Continue reading “Recession Odds”

Recession Odds

Market watchers are all interested in the odds of a recession.  You will not get an accurate view from stories making a big splash.  Since an economist is unlikely to be newsworthy by predicting a 10% chance, it is not surprising that Barry Ritholtz’s citations of recession odds predictions ranges from 30% to 70%.  (Roubini is getting a lot of publicity for his extreme viewpoint.)  Unless a reader of these stories has also read the Wall Street Journal economist poll, the impression will be misleading.

Enjoy Barry’s links (and thanks to him for the work even while in Denver).  Then take a look at our comments on the WSJ recession odds.

Link: Rocky Mountain Linkfest!.

Another week, another collection of mayhem: From the Fed pause to the not-so-friendly skys, indices lost between 1-1.5% this week, as investors digested lots of news this week. Surprisingly, the airports were not nearly as problematic as you might have …

Continue reading “Recession Odds”