Link: http://bit.ly/cfgy4N

The Wall Street Journal has posted an article on the higher rate of selection of Veterans for business schools in the recent year.

These business schools site respect, teamwork, and discipline among other aspects that appeal to the schools. Particularly the ability of Veterans to bring a wealth of experience into the classroom to enrich discussions.

Credit Suisse Group says “an internal study found that employees with military backgrounds tended to be highly successful due to a sense of discipline and ability to build camaraderie.”

As more experienced Vets leave the service, the work force and the US economy will benefit from their contributions. I hope to see more Veterans being chosen for their abilities to overcome adversity and positively contribute to whatever group they decide to participate in. Of course I have a very subjective opinion.

The new year is under way and many people have fallen back into the routines that they promised to change as part of a new years resolution.

Now is the time to take a look at how your grand plans have been progressing.  Whether you have fallen off the horse or not, take stock, and if you need to, gather yourself and start moving again in the right direction.

In retrospect, my endeavors have not been as successful as they could have been but I am making progress.  The progress I have made is similar to that of the stock market in this period – making significant gains even while suffering occasional set backs.  Learning new habits and making significant changes takes time and commitment.  But the most important ingredient is consistency.  Two steps forward and one step back will get you there eventually, it just takes longer.

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Google has announced that it will be considering closing up its operations in China (permalink).

In summary, after an attack on its corporate infrastructure that originated from China, Google is considering withdrawing from the Chinese market.  The attack was not limited to Google and also targeted many other companies from different sectors.  The attack on Google was an attempt to gain access to the accounts of persons who are advocates of human rights in China.  While the majority of the attack failed, Google reported that basic account information, such as: the name on the account; when the account was created; and email subject line information, may have been compromised for dozens of accounts.

It will be interesting to see how this move by Google unfolds.  I wonder if exiting the Chinese market is a viable option for any company in our globalized economy.  I also wonder if the Google’s request to run an uncensored search site in China will be dismissed immediately or considered by the Chinese government.

ZenHabits.net author Leo just put up another site on choosing and maintaining New Year’s Resolutions. The new site, 6changes.com, provides some interesting advice regarding success in sticking to behavioral changes after new years.

The slow and thought-out approach in 6changes.com certainly seems better than the full-bore attack we usually use when confronting personal improvement in the New Year. Leo suggests choosing 6 daily habits, which can be worked on singly for two months each. In the two months dedicated to each habit, eight baby steps are taken, one each week. By systematically breaking down the new habits you want to create, you are forced to gradually incorporate the habits instead of trying to change too much all at once. The process of breaking down the habits has an additional benefit of forming a solid plan with quantitative milestones.

Additionally, each of your new habits should be connected to a trigger that is already part of your day. Triggers are common in performance psychology and are created to help athletes enter a winning state of mind in times of stress. Their use in this program is similar and Leo suggests that by tying together an existing activity, like brushing your teeth or drinking coffee, with your desired habit, you can more easily make the habit a permanent part of your daily routine.

Check out the site for the complete process and in depth advice.  I certainly found it interesting.

Merry Christmas Eve!

In the study of economics and finance there are several theories that attempt to explain how interest rates affect economies and how they can be used to forecast future changes. These theories include classical, liquidity reference, loanable funds and rational expectations theories. Each of these theories makes assumptions regarding the behavior of aspects of the economy and focuses on the behaviors of other aspects as determinants of the prevailing interest rates.

The classical theory of interest rates applies the classical theory of economics to determining interest rates. Classical theory of interest rates compares the supply of savings with the demand for borrowing. Using supply and demand curves the equilibrium rate is calculated by determining the curves intersection point. Thus if savings are greater than investments the interest rate drops until they reach equilibrium and vise versa, if savings are less than investment the interest rate increases until the reward for savings encourages increased savings rates causing the market to again reach equilibrium. However the classical theory of interest rates fails to account for factors besides supply and demand that may affect interest rates such as the creation of funds, the importance of income and wealth and changes in the primary borrowers in an economy.

A second method of determining interest rates is the liquidity preference theory. Liquidity preference theory asserts that economic units have a preference for liquidity over investing. Applying this theory explains the premium offered in forward rates in comparison to expected future spot rates. This premium is used as payment for the use of scarce liquid resources. The preference for liquidity can be accounted for by the fact that economic units need to hold certain levels of liquid assets for purchase of goods and services and the fact that these near term future expenditures can be difficult to predict. Liquidity theory is limited by its short-term nature, the assumptions that income remains stable, and, like classical theory, only supply and demand for money are considered.

Loanable funds theory assumes that interest rates are determined by supply of loanable funds and demand for credit. In loanable funds theory the demand of loanable funds originates from domestic business, consumers, governments and foreign borrowers. While the supply is generated by domestic savings, dispersion of money balances, money creation in the banking system and foreign lending. With these factors determining long-term interest rates, short term interest rates are decided by financial and monetary conditions in the economy. The many factors considered in loanable funds theory mean that equilibrium will be reached only when each of the factors is in equilibrium.

The rational expectations theory of interest rates is based on the idea that people formulate expectations based on all the information that is available in the market. Rational expectation theory holds that the best estimation for future interest rates is the current spot rate and that changes in interest rates are primarily due to unexpected information or changes in economic factors. The rational expectations theory can be incorporated with the loanable funds theory in order to better consider the available information with the economy. The limiting factors of rational expectation theory are mostly related to the difficulty in gathering information and understanding how the public uses its information to form its expectations.

All of the described theories have shortcomings in some aspect. These limitations are based on the theories’ various assumptions which are necessary to understand the diverse aspects of economic influence and change. The most inclusive of these theories is the loanable funds theory and as such it is the choice of financial practitioners. The loanable funds theory includes many of the various factors that influence our markets. Because of the variety of influences included in the theory, any failure can be attributed to imbalances in the equilibrium of savings and investment, money supply and demand, the supply of loanable funds, or net foreign demand and exports.

Happy Holidays to all!

Check back soon as new posts will be on their way.

A recent Inc. Magazine article suggests making 100 cold calls this minute, in order to gauge your target market. The advice seems sound. There are many academic articles that indicate that the largest contributor to entrepreneurial success is the size of the market that is targeted. In fact, along with the entrepreneurial team, venture capitalists seem to look at the potential market as on of the largest factors in selecting ventures to fund.

Can you come up with 100 people to call right now, that may buy what your selling?