Ativo Capital

Rigorous Thinking


Financial and economic commentary reflecting Ativo’s world view:

THE CUBAN REVOLUTION, R.I.P.

Tuesday, December 17, 2013

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A revolution is like a rashomon, individual observers have their own visions. “The  Cuban revolution is about providing justice and full stomachs for the downtrodden.” “The revolution is about providing dignity to the oppressed, who had been marginalized by the capitalists and American business.” “The revolution is about introducing socialism and displacing the inequities that developed from private ownership of the means of production.” Cuba is shrinking; its revolution has hit the end of the road.  Its population growth is stagnant at the rate of 0.1 percent a year.  The female reproduction rate is 1.7, or 0.5 percent below…

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Trade, Labor, Capital, the Rich and "The Rich"

Tuesday, September 24, 2013

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Bloomberg writer Megan McArdle cites a recent Brookings paper addressing the long-term decline in labor’s share of U.S. national income. The Brookings paper refers to “import exposure,” which sounds like a fancy name for “cheap foreign imports.” Although there’s much more to the Brookings paper, and McArdle’s article, the bottom line seems to be that the U.S. share of wages is down because free trade allows offshore labor (in the form of imports) to undercut U.S. labor. So I asked myself the question, “What about cheap foreign capital?” Cheap foreign imports may hurt U.S. workers (although, yes, the pain…

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Bob Aliber’s Quarterly Update

Sunday, April 28, 2013

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Once every couple of years, I become extremely envious of the title of a new book because it dazzles and captures a lot of shelf space. So it is with The Physics of Wall Street, by James Owen Weatherall. . The title suggests a deterministic model, like Newton’s laws of thermodynamics or Kepler’s laws of planetary motion. I purchased Physics in the hope that there would be a discussion of the forces that lead to large changes in stock prices. One story line in Physics is the history of modern finance. (Thus the book is similar to Nicholas Dunbar’s…

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