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The Best of What They Said and I Read week ending 4/16/2017

Short excerpts from articles I found interesting.

I may not agree with the author and the following material is not intended as investment advice.

Barron’s – April 15, 2017 – Good Advice From Two Dead Economists by Thomas G. Donlan

  • “If Alfred E. Kahn and Julian Simon were alive today, they would be spinning in their graves – along with thousands of other economists who spent their lives preaching the rational use of markets to satisfy people.  Kahn, the economist-turned-bureaucrat, filled airliners by deregulating ticket prices in the 1970s; Simon was the economist who taught the airlines how to cope with overbooked airplanes by paying people to give up their seats. But the two were prophets without honor in their own field of expertise.”
  •  “Passengers are ungrateful for the low fares that Kahn made possible by ending government price-fixing and supply constraints… Many airlines, meanwhile, ignore Simon’s advice about using auctions to pry passengers out of their overbooked seats.  Last week United Airlines found that rejection of sound economics can carry a cost much greater than the cost of a seat.  The company richly deserves the bad publicity…”

 The Wall Street Journal – April 15-16, 2017 – Does Steve Bannon Have Something to Offer? – by Peggy Noonan

  • “…So let’s take a look at something impressive Mr. Bannon has done…In 2014 he did a live Skype interview for a conference on poverty at the Vatican.  BuzzFeed ran it during the campaign under the headline “This Is How Steve Bannon Sees the Entire World.”
  • “…The West is currently facing a “crisis of capitalism,” he said.  The world was able to recover after the world wars in part thanks to “an enlightened form of capitalism” that generated “tremendous wealth” broadly distributed among all classes.  This capitalism was shaped by the “the underlying spiritual and moral foundations …of Judeo-Christian belief.”  Successful capitalists were often either “active participants in the Jewish faith” or “active participants in the Christian faith.”  They operated on a kind of moral patrimony, part tradition, part religious teaching.  But now the West has become more secular.  Capitalism has a result has grown “unmoored” and is going “partly off track.”
  • “…Capitalists, he said, now must ask:  “What is the purpose of what I’m doing with the ability that God has given us…to actually be a creator of jobs and a creator of wealth?”

 Bloomberg Businessweek – April 10 – April 23, 2017 – Movers by Kyle Stock

  • “Hummus fever is now sweeping the country as U.S. farmers are expected to plant 53 percent more acres of chick peas this year than in 2016.  Consumers and snack makers are gorging on plant-based proteins.”

U.S. Global Investors – Investor Alert – April 13, 2017 – by Frank Holmes

  • “…National Association of Home Builders (NAHB) shared some of the significant contributions housing provides to the U.S. economy…“building 100 single-family homes in a typical metro area creates 297 full-time jobs and generates $28 million in wage and business income and $11.1 million in federal, state and local tax revenue.” The sector currently accounts for 15.6 percent of U.S. gross national product (GNP).”
  • “The major market indices finished down this week.  The Dow Jones Industrial Average lost 1.01 percent. The S&P 500 Stock Index fell 1.21 percent, while the Nasdaq Composite fell 1.26 percent. The Russell 2000 small capitalization index lost 1.41 percent this week…The 10-year Treasury bond yield fell 10 basis points to 2.24 percent.”


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