First you have to recognize it.

It is difficult to intelligently manage risk if you don’t even know how to measure that risk. What are the units?

The media talks today about “tapering” as if it is going to be news. Yet they fail to report the actual reality of the market consequences of the Fed’s Asset purchases.

First, a graph of the Fed Balance Sheet:

fed balance sheet

One result of this is a Volatility beyond our awareness.

Last week,  the yield on the 10-year Treasury hit 2.855%.

On April 26, the yield was 1.64%.

That is an astounding 74% increase. In Treasury yields.


For perspective, if the Dow had gained as much over the same time frame- it would now be  in the  25,551 neighborhood!

The media is missing the story.

We have unprecedented volatility in our financial system today.

So how do we see it as manufacturers?

DGORDER_July 2013

The Commerce Department said on Monday (July) durable goods orders dropped 7.3 percent as demand for goods ranging from aircraft to computers and defense equipment fell. That was the biggest decline since last August and snapped three consecutive months of gains.”- Reuters

Contrast that to the gushing ISM report for July from the Economic Populist blog: “The July ISM Manufacturing Survey shows PMI had a blow out increase of 4.5 percentage points to 55.4%.   Manufacturing has moved into sold growth with new orders increasing by 6.4 percentage points and production roaring in an 11.6 percentage point gain.   Even the employment index increased.”

These are Volatile, Uncertain, Complex and Ambiguous times. We need to look for the story behind the story behind the story.

I am reminded of a classic Richard Pryor/Groucho Marx line  “Are you gonna believe me or your lyin’ eyes!?”

When it comes to economic indicators, It is in our best interest to try to recognize and challenge the underlying assumptions.

How do you intelligently manage risk in the current economy?

But I’d still be careful about what I was doing…

The FAA wants your comments regarding  in flight Portable Electronic Device policy.

The FAA seeks comments on current policy, guidance, and procedures that aircraft operators (ranging from pilots of general aviation aircraft up to and including air carrier certificate holders at the major airlines) use when determining if passenger use of portable electronic devices (PEDs) may be allowed during any phase of flight on their aircraft. “

Read their announcement here PED NOTICE

Why do they have the policy? Here is the current FAA Fact Sheet.

No they don’t want your seat mate to be gabbing on their cell phone the entire flight.

But they are opening up the possibility that real scientific evidence, rather than just all encompassing paralyzing fear that “something,” “could,” “happen.”

In this case I am rooting for the committee that is to be established.

We just might get some “Intelligent Management of Risk” out of this.

How to comment:

  • Send comments identified by docket number FAA-2012-0752 using any of the following methods:
  • Email: Submit your comments via email to vog.aaf@tnemmocDEP
  • Federal eRulemaking Portal: Go to and follow the online instructions for sending your comments electronically.
  • Mail: Send comments to Docket Operations, M-30; U.S. Department of Transportation (DOT), 1200 New Jersey Avenue, SE, Room W12-140, West Building Ground Floor, Washington, DC 20590-0001.
  • Hand Delivery or Courier: Take comments to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue, SE, Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.
  •  Fax: Fax comments to Docket Operations at 202-493-2251.

If enough people comment, we might just get to the point that it won’t be illegal to take photos out of the window during takeoff and landing.

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