Lots of 'Love' for the Lowly Dollar
by Travis Pantin
Wed, 28 Nov 2007 at 12:40 PM
updated Wed, 28 Nov 2007 at 12:43 PM
On the Stalwart (thestalwart.com), Joseph Weisenthal has an unusual suggestion: Maybe it's time to start buying back those sickly dollars. Mr. Weisenthal understands that he might be relatively alone in this view.
"It's not that the Dollar has such great fundamentals behind it right now, but the Euro? Why all the love?" he asks. "It's not like there's any oil there, nor are the European governments paragons of fiscal discipline."
He goes on: "Stories like the ones yesterday, of European shoppers flying to the U.S. for a leather jacket coupled with the Euro currency becoming a pop culture phenomenon help to crystallize the idea that perhaps that perhaps this is a bit overdone."
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TRACKING THE S&P'S PERFORMANCE
Paul Kedrosky provides a list of the longest S&P 500 losing streaks, where the index failed to close on two consecutive days higher than it opened. Although Tuesday's market closing brings us into the 20th day of such a streak, Mr. Kedrosky points out that this is not a record.
Since 1950 there have been 23 other streaks numbering 20 days or longer. "Considering that there have been 14,565 trading days since January 1950," he remarks, "you can see how we're waaay out in the tail of this particular distribution."
Mr. Kedrosky also shows that by grouping the losing streaks by decade, "pretty much every decade has its share of longer streaks." His data shows that since the 1950s there have been at least three long streaks a decade, with the current streak being the third for the years 2000 through 2009.
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SAFE FROM INDIAN COMPETITION How much should service-sector workers in rich nations fear offshore competition? Are American call centers and software companies going to be eliminated by cheap Indian labor? On the VoxEU blog , Thierry Mayer of the University of Paris Panthéon-Sorbonne and Keith Head and John Ries of the University of British Columbia say: No, not really.
Although "pundits regularly invoke the notion of a world economy that is either 'shrinking' or becoming 'flat,'" their research suggests that
distance "still provides signification protection, almost as much in services as it does in goods. Once again the death of distance has been greatly exaggerated." Take that, Thomas Friedman.
Their report concludes because their estimates "reflect averages across a range of services, there are surely services where competition is especially acute. We suspect that persistent cultural differences, as well as locally-biased social networks, will maintain distance costs at a high enough level to forestall the small, flat world envisioned by some journalistic accounts."
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