Opinion

Argentina and the Frog

Argentina and the Frog

Like many classic fables, the story of the frog and the scorpion can be traced back to many cultures, each with their own twist.  Aesop’s version is here. A scorpion and a frog meet on the bank of a stream and the scorpion asks the frog to carry him across on its back. The frog asks, “How do I know you won’t sting me?” The scorpion says, “Because if I do, I will die too.” Argentina was once the rising star of the global economy.  By 1913 it was the world’s 10th wealthiest country per capita owing to abundant natural resources and governance that emphasized economic growth.  After a military takeover in 1930, Argentina experienced constant political change.  From 1930 to 1983, the country averaged a new president every two years.  Argentina defaulted on its international debt in 1956, 1989, 2001, and 2014.  The 2001 default resulted in a highly…

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HBTM: 12-27-2016 Dow 20,000 Edition

How ‘Bout That Market?  This is a question I hear at social gatherings often enough that it makes sense to make it a regular entry on this website. The Market The last week of the year is usually pretty sleepy.  This year’s final week is book-ended by holidays which means a terrific drive in to work for me as everyone takes advantage of long weekends.  I don’t usually expect financial news this week, but this year the Dow Jones Industrial Average is bumping up against 20,000 which is a MAJOR MILESTONE/PSYCHOLOGICAL BARRIER.  Will we hit 20k?  It wouldn’t take much, but it really wouldn’t mean much either. 20,000 is just a number.  Don’t forget that the DJIA is just 30 stocks and the index is price-weighted rather than market cap weighted.  This means that even though Apple is the largest public company on the planet, eight other stocks have a…