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Wednesday, December 02, 2015

Old School Is Outdated School In Modern Times

There are moments when I think I need to go back to college and get re-educated.  The changes in the financial environment is one such area.  It is tough trying to understand how lending institutions assess capital needs compared with any particular business.  Accounting possibilities is a science unto itself.  Read this this morning.  This is so different from my Econ classes from years ago.

"Businesses appear reluctant to step up spending on the basic building blocks of the economy, such as machines, computers and new buildings. A stronger dollar and falling commodity prices are prompting caution among some, while thousands have decided to bolster share prices by spending money on stock buybacks and dividends, rather than plow funds back into facilities and equipment, moves that would boost worker productivity and ultimately wages. Meanwhile, the average amount Americans spent in some key product categories declined on Thanksgiving and Black Friday, as mobile shopping drove smaller orders, and aggressive discounts pushed down prices."

Add to this the IMF embracing China'a Yuan by adding it to its basket of reserve-lending currencies while Hong Kong (granted that's not Beijing) is distancing itself from that currency. It seems impossible to assess risk in a global economy.  

When in the Army serving in Germany in the early 70s, I played in the currency exchange market.  I had little to invest but came out on top more than I lost and I didn't have access to the system so my earnings had the cost of local exchanges to deal with.  It was scary fun.  Got a damn good stereo out of it too.

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