As the global economy has recovered, commodity prices have been trending higher. Whether one looks at crude oil, industrial metals, agricultural commodities or livestock, the price direction over the past year has been up. This spells inflation. At the same time, the Federal Reserve Board (Fed) has maintained an anti-DEFLATION stance. We would agree that … Continued

A long held maxim in the investment business is that bonds issued by stable governments have no default risk because governments have unlimited taxing authority. The ability to repay debt is simply a function of collecting tax revenues. The fact that the Greek government is presently discussing the terms of its “non-default” default challenges this … Continued

I have a Diet Coke almost every day with my lunch. Last Tuesday, I was shocked to read in the Wall Street Journal editorial page that according to the EPA guidelines, the artificial sweetener in my Diet Coke was treated as hazardous waste! If the FDA says it’s okay to consume, how could it be … Continued

Many of my blogs over the past few months have focused on government policy – fiscal and/or monetary. While this may seem to the casual observer somewhat removed from investment analytics, the reality is that government policy always impacts the financial markets (Ronald Reagan’s massive tax cuts in 1981 ignited the subsequent stock market rally; … Continued

Robert Frank writes in the New York Times on 11/28/10, that taxpayers who have incomes above $250,000 can handle the tax increases embedded in the expiring tax cut legislation from the Bush Administration because it would not “…affect their own standard of living.” He notes further that “Truly wealthy families wouldn’t have to alter their … Continued

Like a large number of their fellow Americans, the Democrats lost their house on Tuesday. The power has shifted in Washington with the Republican controlled house serving as a counterbalance to President Obama and the Democratic majority in the Senate. A major concern is gridlock in this weak economy. Gridlock would be a result of … Continued

Given expectations of material changes in the contours of Congress after next week’s elections, it is not inconceivable that the leader of the Democratic Party, President Obama, could launch a “November Surprise.” While this is pure speculation, our hunch is that it could be related to the Afghan war which is very unpopular with the … Continued

Washington DC policymakers continue to grapple with measures to spur job growth. The October 12, 2010 issue of the Wall Street Journal does a service to its readers with the inclusion of one of James Madison’s 222 year old submissions to the Federalist Papers (Number 62). His observations are every bit as insightful now as … Continued

The Dow Jones Industrial Average has been bumping up against the “11,000” level. While for those who are “long” stocks, the increase means their net worth has been enhanced, but there is still nothing particularly noteworthy about this level. However, investors and observers are riveted on these milestones and accept each as a barometer with … Continued

We haven’t talked too much about inflation here and have recently noticed concerns about inflation have been somewhat mitigated in the press and blogosphere. We get especially nervous about something when everyone else thinks it’s not worth worrying about. Inflation is a measure of a general rise in prices of goods and services over time. … Continued

The equity markets were quite weak in August, but the first week of September has brought strength. Investors are looking for clues, trying to assemble a series of statistics that might indicate the course of economic growth, and hence corporate profits which, over the long term, drive equity prices. Election season rhetoric will begin to … 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