Last week, the markets rallied nicely, up 4-6%.  They were expecting something constructive from the G-7 finance ministers meeting this weekend in Poland, with the announcement last night.  That didn’t happen, and the markets are peeved this morning.  Europe is down 2-3% already.  Our futures indicate the Dow will lose about 130 points at the … Continue reading The Morning After . . .

This week, the Fed will meet for a special two-day meeting.  Normally only a one-day event, Bernanke wanted to make sure any disagreements were fully explored.  So, what should we expect? The market believes the Fed will announce Operation Twist, which means they will sell some of the shorter-term Treasury bonds (at a profit) and … Continue reading Reading the Fed

There are some people who watch every movement in the market and hope to glean some minute parcel of meaning from it.  Today will be a bad day for them! First, Fridays are traditionally more volatile than other days, as traders decide whether to remain in cash over the weekend.  If dramatic news should break … Continue reading Guilty As Charged!

In a remarkable piece of world-wide cooperation, many of the world’s central banks have agreed to provide liquidity funding for European banks, mostly dollar swaps.  Not surprisingly, the European and U.S. markets are up nicely, and gold is down about $40/oz.  The markets feels good now, because they got a shot of morphine. Unfortunately, this … Continue reading It’s Morphine . . . Not Penicillin

A few years ago, the Governor appointed me to the Virginia Public Building Authority.  Technically, the job is to issue all bonds authorized by the legislature to construct public buildings.  Practically, the job is to make sure the investment community doesn’t take advantage of the state bureaucracy. Today, I was in Richmond attending the meeting … Continue reading Contrary to Popular Belief

As predicted, the G-7 meeting of Finance Ministers and Central Bankers this weekend in France produced another “mealy-mouth” statement, and the world markets are dropping in response.  Asia and Europe both dropped sharply overnight, and the futures market indicate the Dow will drop about 140 points at the open, on top of the 303 points … Continue reading Pricing In Armageddon?

At the time, I was running SunTrust’s wealth management office in Olde Town Alexandria, a surprisingly deep pocket of wealth.  I was at work early that day to prepare paperwork for a loan to a long-time friend and client that afternoon in Newport News. About 9:30, an employee walked in my office, asking me if … Continue reading September 11, 2001

I sagely predicted the market would drop on Friday.  My thinking was that Friday is the most volatile day of the week anyway, and everybody would be disappointed with the Presidential address on Thursday night.  However, in addition to that, there were a number of rumors coming out of Greece and Brussels, which deeply unsettled … Continue reading The Austrian Perspective . . . Pain

We know gold has become expensive and that houses have become relatively inexpensive.  If you measure the average cost of a house divided by the price of gold per ounce, you get the cost of the house in ounces of gold, instead of dollars.  Now, take a look at this chart.  Does this suggest houses are … Continue reading How Low Can It Go?

One characteristic of existential observers is the tendency to see absurdity in many things and to find some wry humor in that.  I felt that way watching the Presidential Jobs Speech last night. First, he walks into a room where at least a hundred people truly hate him but nonetheless stand there applauding anyway.  Then, he asks them to … Continue reading The Jobs Speech

Imagine standing on the roof over your garage and tossing the dead carcass of a cat onto the driveway.  It will hit the driveway and bounce up somewhat before falling back on the driveway.  That disturbing imagery is what Wall Street calls a “dead cat bounce” . . . or what I call . . … Continue reading That Cat Don’t Meow

When our terrible Jobs Report came out on Friday, the Asian markets were closed.  They opened today and starting dropping . . . and dropping.  Overall, it dropped about 3%, with Korea leading the way down at 4.4%.  Over the weekend, Angela Merkel lost an important election in her home state, ramping up speculation that she would … Continue reading Brace Yourself . . . September in PREview