Macro

• Once again, Mark Zandi and his team at Moody’s Economy.com (MCO) comes through with something interesting. Click through on the image below and interact with the map to find out if your state and county is in risk of recession. My home state of California is definitely at risk, dragged down by rapidly falling housing prices. I currently spend most of my time in Utah, one of the few places that has seen strong economic expansion and even strong real estate price appreciation. Forbes recently named Salt Lake City first in its “Best Cities for Jobs in 2008″ rankings.

• BRICs (Brazil, Russia, India, China markets and stocks) call temptingly to investors frustrated by the recent turmoil in domestic equities markets. They have dominated the issuance of global depositary receipts, accounting for 50% of the record $55 billion raised in 2007. Executives at the Bank of New York Mellon (BK), a large operator in the ADR space, say the trend is expected to continue as BRICs companies are anxious to tap into capital from developed economies as well as listing shares in their own countries’ exchanges. Caveat emptor, while these depositary receipts must pass some regulatory and compliance hurdles, their accounting and reporting standards do not match the rigor of domestic stocks.

• Life, Liberty, and the Pursuit of Happiness: Questions exploring the link between income and happiness are not new. Recent studies show that per-capita GDP is an imperfect measure of welfare. No really? Any attempt at measuring “happiness” will, by definition, be subject to inaccurate opinion and “self-perception” – we humans are an idiosyncratic lot. Furthermore, when income inequality expands (a necessary symptom of meritocracies), large portions of a country’s population loses satisfaction. We live in interesting times (read turbulent) and envy is either a sin or a highly irrational emotion.

Micro

• Building BRICs on education: The national Chinese universities are notoriously competitive and accept only a tiny fraction of China’s brightest students. In the past, the next brightest were relegated to factory jobs and other less “prestigious” careers. As China’s wealth grows, the citizenry will demand more social mobility. Enter private, for-profit educational institutions like New Oriental Education & Technology Group (EDU). I suspect we’ll see more such issues coming to our public equities markets from the BRIC economies. Full Disclosure: I currently have a long or short position in EDU in one or more of my private investment partnerships.

• The Tiger bets on the Dragon in the Year of the Pig: Julian Robertson has served as a great role model for me especially for his legacy of mentoring numerous “Tiger Cubs” at his now defunct Tiger Management who have gone on to run highly successful hedge funds of their own. His influence cannot be measured only on the returns he generated. Now Charles Coleman’s Tiger Global reported a knockout 2007 in which the Tiger Cub generated a 71% return. Big technology names such as Google (GOOG) and Research in Motion (RIMM) fueled the outstanding performance. A large portion of the portfolio benefited from the strong performance of Chinese stocks. Big winners included Baidu.com (BIDU), Longtop Financial Technologies (LFT), Focus Media Holding (FMCN), the aforementioned New Oriental Education & Technology Group (EDU), and Gushan Environmental Energy (GU). Julian Robertson established a reputation for rigorous fundamental analysis coupled with insightful contrarian strategies. That begs the question; when does China become too expensive? Full Disclosure: I currently have long or short positions in RIMM and EDU in one or more of my private investment partnerships.

• Conservative lending principles will hold banks steady through the credit crisis. Even when the yield curve is more positively sloped, giving in to the temptation to relax credit standards will come back to bite undisciplined management. A few banks off the top of my head that have reaped the benefits of prudent lending include Wells Fargo & Company (WFC), US Bancorp (USB), and even Oriental Financial Group (OFG). Oriental belongs to the group of banks that serve Puerto Rico, a small group that has underperformed for so long that Wall Street expectations cannot go much lower.

Technology

• Charlene Li, an analyst with Forrester Research (FORR), writes a good piece on the future of social networks. She impresses me with her forward thinking and ability to simplify some deep concepts. The future of social networking will feature universal identities, a unified social graph, deeper social context for “activities” and a new business model where social influence defines marketing value. These predictions are very relevant to my work at SocialOptimize and I especially like marketing value defined by social influence. Fortune 2000 companies would do well to heed Charlene’s prognostications. Why is Charlene working for a big stodgy publicly traded company? She ought to jump ship and join SocialOptimize.

• Apple (AAPL) takes a serious run at Research in Motion (RIMM) and its Blackberry devices. The iPhone debuted to much fanfare, but Wall Street has been relatively unimpressed with the product and results. Apple recently announced the release of the iPhone SDK, essentially opening up the iPhone as a platform for outside developers to create software for the iPhone. Predictably, this has gotten the tech industry very excited, but Wall Street continued to respond with ambivalence. The day of the announcement, Apple’s stock actually dropped. Kleiner Perkins Caufield & Byers also announced a $100 million venture fund devoted to backing iPhone focused startups. Full Disclosure: I currently have a long or short position in RIMM in one or more of my private investment partnerships.

• Space is still the final frontier. If global warming continues, we’ll need to find alternative places to inhabit. The Europeans launched a humongous “cargo ship” into space to resupply a space station. Live long and prosper!