Read the article from this week’s Barron’s Magazine – “Was The Flash Crash Rigged?” The expert cited in the article implies market manipulation by high frequency trading (hft) firms. If they have not done so already, the SEC needs to immediately launch an investigation (and be more rigorous than when investigating Madoff). Capitalism thrives because … Continued
The August 22, 2010 New York Times carried an article (In Striking Shift, Small Investors Flee Stock Market) noting that investors resumed their net liquidation of common stock holdings in a material fashion (over $33 billion) during the first seven months of 2010. As we interpret price charts, the last secular bear market in common … Continued
Jeremy Siegel and Jeremy Schwartz write in the Wall Street Journal today that common stocks are attractive and bonds are not. With regard to bonds, this appears to be a blinding glimpse of the obvious, with interest rates at generational lows. But, we tend to use bonds for their capital preservation characteristics as opposed to … Continued
The burgeoning growth worldwide of unfunded liabilities has received a lot of press lately. Defense spending (future blog), pension liabilities and public sector salaries have been drawing the most ire from both sides of the aisle. Public debt concerns across the world have been much in focus, with the Greek debt crisis and public spending … Continued
Einstein famously said his theory of relativity applied to physics, not ethics. We’re reminded of this quote when reading Nassim Taleb’s blog recently on the Huffington Post. Taleb tells a story of being pitched a financial product by former Fed Governor Alan Blinder. Blinder was able to use his knowledge and experience as a former … Continued
The price of gold declined rather sharply over the past several days. The July 26, 2010 Wall Street Journal Commodities headline read “Gold Sinks as Market Worries Ebb.” Investors typically use gold and the common stocks of gold mining companies to hedge their portfolios against inflation and/or political risks. Political risk can take many shapes … Continued
On July 14th, we hosted a group of clients and friends at one of our favorite places, the Detroit Institute of Arts. We had the good fortune of being able to view the DIA’s current special exhibit “Through African Eyes” with a preview by curator Dr. Nii Quarcoopome. Dr. Quarcoopome gave us some perspective on … Continued
On July 2, 2010, the Campbell Soup Company re-marketed its 3.5% bonds due 2015. Stunningly, the yield represented NO PREMIUM versus what US Treasury Bonds were paying on that day for the same maturity! Campbell is considered a very strong company and, if the ratings agencies can be trusted, its bonds are considered investment grade. … Continued
An amusing chart courtesy of our friends at WallStreetCheatSheet.com. http://wallstcheatsheet.com/trading/your-cheat-sheet-to-the-psychology-of-market-cycles-infographic/?p=13570/ Funny how true it is!
The debate over Keynesian orthodoxy is raging. Most recently, in a NYT op-ed, Paul Krugman suggested we are in the beginning stages of The Third Depression. http://www.nytimes.com/2010/06/28/opinion/28krugman.html We do not fully subscribe to Krugman’s analysis for a number of reasons. First and foremost, the Keynes prescription to spend to spur aggregate demand assumes borrowing capacity … Continued
This blog has precious little to do with the economy or markets. I will start by saying that human error is present every day in markets. We sell when we should have bought or bought when we should have sold. We order too much inventory. Perfection is never guaranteed. One of my “bucket list” desires … Continued
This discussion relates to our blog posting of May 26, 2010 about the unraveling social contract in Europe. Since that time, “austerity” has become the policy prescription of choice by the governing classes to fix the budgetary ills of Europe generally and Greece specifically. Elected officials, for the most part, do not like to impose … Continued
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