Readers know I have long been fascinated by the writings and philosophy of Ayn Rand. They may remember my blog entry on December 5th of last year called “The Little Russian Girl Who Changed America.” This weekend, I have overdosed on her! First, I watched a DVD entitled “Ayn Rand: The Prophecy of Atlas Shrugged,” which was her landmark book published in 1957. This DVD, however,…
Investment analysts from the Warren Buffet school of investing often say that corporate earnings are “the Mother’s Milk of stock markets.” If true, the babies must be getting fat and healthy. In the 2008 crash, corporate earnings for the S&P 500 dropped a staggering 92%. But, take a look at this chart: Corporate earnings have rebounded just as sharply as they fell. In a mere…
During the fourth quarter of last year, our economy expanded at a 3% rate, and there was a collective sigh of relief. We knew there was a slowdown during the first quarter. A survey of economists expected the GDP growth rate for the first quarter would be only 2.5%, which is not great but certainly acceptable. Unfortunately, it only increased 2.2%. It would have been…
You heard it here first — something stinks in the long-term-care insurance industry! Long-term-care insurance provides funds for some of the expenses related to nursing home care and other end-of-life expenses. Insurance companies saw the massive baby-boomer generation headed into their golden years and smelled an opportunity to sell insurance. A brilliant marketing move by them to sell insurance was to argue convincingly that financial…
Unfortunately, Sarkozy came in second in Sunday’s nationwide election. This means he will face a run-off election with Socialist candidate Francois Hollande in two weeks. Sarkozy has been instrumental in the effort to impose fiscal discipline on Europe. Unfortunately, he was also caught in the undertow of the European crisis. Despite being a conservative, the debt-to-GDP ratio for France has risen from 67% to 90%…
Last night, I found myself watching The History Channel, which is normally excellent. However, I was watching a show on the predictions of Nostradamus, a 16th century Frenchman who was trained as a pharmacist. Everybody has heard of his prediction, based on Mayan lore, that the world will end 12-21-2012 or in about eight months from now. Long ago, when I lived in Texas, I became…
There has been a good deal of discussion about the slowness or the weakness of this recovery. My analysis is that recoveries from financial collapse take longer than a normal garden-variety recession, because it takes so long to de-leverage or reduce debt levels. But, here is another take on the slowness of this recovery. If we define a “massive bear market” as one where an…
That is an old adage from the Wall Street days before air-conditioning, when New York was insufferably hot during the summer, and the Robber Barons who controlled the trading spent the summer on the shore. Indeed, for the last two years and three of the last four years, the market reached its high in May and then drifted down the rest of the year. Just…
A few nights ago, we watched the new movie Iron Lady about Margaret Thatcher. I expected an inspiring story about the rise of a grocer’s daughter to become the first female prime minister of England. Instead, it was a touching study of dementia, i.e., that slow descent into madness before death. Hearing others talk about things she didn’t understand, her fears rose. Seeing others talk among…
Living in America, any discussion of taxes and fairness seems to revolve around high and low income earners, i.e., rich vs poor in terms of income. In Europe, that discussion tends to revolve around high and low net worth statements, i.e., rich vs. poor in terms of asset amounts. However, I think England and Canada may have the proper framework for the discussion. They see…
For those few folks who do not subscribe to Inside Business, my latest quarterly column can be found here: http://insidebiz.com/news/great-first-quarter-lousy-recovery I don’t know why the online version never looks as good as the print version, but that is just another reason to subscribe.
Sometime ago, I bought a DVD on the PBS website called “The Crash of 1929” and watched it last night. (I really do have to get a life! That’s no way to spend a Friday night, according to my wife.) Despite the ever-present fear that “it could happen again,” there are at least three differences that make a repeat of the 1929 crash very unlikely.…
Last night, I toyed with writing a blog that said the market would open today — up or down — depending on four things that would occur before the opening. On Thursday night, Google would announce its earnings and China would announce its GDP growth rate for the first quarter. This morning, both JP Morgan and Wells Fargo would also announce their earnings. All three…
For the third year in a row, the rites of Spring include a European panic attack. Today, it became clear that Spain is going down the same trail as Greece. While their interest rates have not reached earlier highs, the spread between their rates and the rates of Germany have reached a record high. The message is that investors prefer the relative safety of…
Maybe it is because this is the weekend of the most hallowed of golf tournaments in Augusta or maybe it is because I met the author at dinner Thursday night at the Town Point Club in downtown Norfolk, but I actually read a book on golf today. It is titled King of Clubs: The Great Golf Marathon of 1938 by Jim Ducibella, the long-time sports editor…
Congress is very good at one thing, i.e., borrowing from the future. Apparently, so does the weather! The Department of Labor released their monthly Jobs Report this morning, and it was disappointing. Most expectations were that the economy created about 200 thousand jobs in March, down from about 240 thousand in February. Instead, only 120 thousand jobs were created, the smallest gains in five months.…
The conventional wisdom among economists is that capitalism is rational, because people act in their own best interest. However, among investors, there is an old adage that the stock market can be irrational and stay irrational longer than you can stay solvent. The market was irrational yesterday and today. In the short run, the stock market is a contest between expectations and results. The expectation…
For those readers old enough to remember privacy, you might just need something to smile about, and I’d recommend you click on or copy/paste this link: http://online.wsj.com/article/SB10001424052702303816504577309562257097438.html?KEYWORDS=eric+hague It is a humorous column written by Eric Hague about Google’s relentless pursuit of every piece of personal information about you. By the way, I no longer search the internet with Google and highly recommend you…
The most enduring contribution of the almost memorable Occupy Wall Street movement to the American lexicon is . . . the notion of the 1% vs. the 99%. You know — that is the notion that 99% of Americans suffer because the 1% has all the wealth and repress the poor 99%. Now, suppose you have worked hard, as well as been lucky, and you are…
