My mother died tonight. I guess a person can only say that once in a lifetime. Right now, we are scrambling to pack and leave shortly. She spent a long seventeen months in hospice and died a miserable death, begging the question of why a good God would make good people suffer so much . . . for so long? She deserved better! Somehow, it…
During the 1990s, corporate profits averaged 5.4% of GDP. Today, it has doubled to 11.1% How can you not be happy that corporations are doing so well? CNBC great Larry Kudlow likes to say that “profits are the mother’s milk of stock prices.” It is good for stock prices! From a historic standpoint, during the global financial crisis of 2008/9, banks shut off the flow…
I know I’ve said it too many times already, but doesn’t every good song have a refrain that is repeated over-and-over. Here is mine: we are over-regulated and under-punished! There, I feel better now . . . Bernie Madoff was exposed in 2009 after his Ponzi scheme collapsed. He could have been arrested years earlier by the SEC, which ignored both anonymous and non-anonymous tips.…
In the remote southwest corner of Texas, separated from Mexico by the muddy Rio Grande river, lies the vast Big Bend National Park. It is larger than the whole state of Rhode Island; a desert flatland of wide vistas colored in brown and tan, with a few smudges of green, smothered by a brilliant blue sky and punctured by the majestic Chisos Mountains. It is…
I’ve been a member of the National Association of Business Economists for many years now. They are mostly working economists, not academic economists. And, I always look forward to their economic survey of members. According to the latest: 1. Due to weather primarily, GDP growth in the first quarter was only 1.9%, but it is expected to accelerate to 3% for the next three quarters.…
It is for good reason that economics is not-so-lovingly referred to as “the dismal science,” because it is so focused on budgeting limited resources. As a result, economists tend to see the world dismally or at least differently. I appreciate those who can make the subject interesting, entertaining, and relevant. Therefore, I highly recommend an economist’s review on that dismal but Oscar-winning movie Dallas Buyers…
I’m trying to feel sorry, without much success, for Vladimir Putin. After all, he grew up in the old Soviet Union, with no understanding of capitalism. When communism fell, it was replaced with “cronyism” which created the oligarchs . . . but certainly not replaced with capitalism. Following his invasion of Crimea and imminent invasion of eastern Ukraine, the Russian people are going to pay…
Morgan Stanley is another highly respected investment firm on Wall Street and is NOT a huge vampire squid sucking on the face of mankind, as others are known. Their monthly updates are less concise than that of Goldman Sachs but more thoughtful. Here are some thoughts from their latest: At the end of 2013, analysts (including their own) were overly-confident that the market would continue…
Here are some of the latest forecasts from one of the most feared, I mean, most respected investment houses on Wall Street: 1. The lousy winter weather has probably taken a half percentage point off GDP growth in the first quarter, with the inventory correction taking off another half point. Still, they expect a healthy 3% growth rate beginning in the second quarter. Next year,…
Poor Janet Yellen! Americans lost billions of dollars yesterday, when she held her first press conference as Chair of the Federal Reserve System. But, she really did great! She explained that the unemployment rate alone will no longer be binding on the Fed’s decisions, which is smart. She explained the reasoning for the next $10 billion cut in quantitative easing (QE), which was expected. She…
I am often asked what I primarily worry about, or what keeps me awake at night. Certainly, I worry about the possibility of cascading defaults by counter-parties in the lightly-regulated, heavily-cloaked derivatives industry. After that, however, I have been worried about the economic consequences of a successful terrorist attack on our national electrical grid. A new report by the Federal Energy Regulatory Commission (FERC) states…
With so much conflicting information to study each month, it is already tough enough trying to rationalize and reconcile the behavior of both the economy and the stock market. Then, some geopolitical veil descends, making it even more difficult to foresee anything. Remember the European financial crisis? With the renewal of the Cold War by Russia, bad possibilities are now considered possible, such a nuclear…
Sometimes, it takes awhile to find and identify the devil hiding in the details. Back in December, demonstrators were in the streets of Kiev, pushing out the pro-Russian government. To make themselves less unattractive, Russia then agreed to make a $3 billion loan to the Ukraine. While it was odd that the loan was in dollars and agreed to be governed by the courts in…
It is hard to believe but it has been five years since the ugly days of March 9, 2009 when the stock market finally bottomed out, following a horrendous 57% drop. Since then, the market is up almost 180% — an object lesson to never panic nor to get 100% out of the market. However, because Wall Street climbs a “wall of worry” everyday, there…
Back in the early 1970s, there was a series of four full-length motion pictures loosely centered on the character of Billy Jack, who was a half-Indian, ex-Green Beret, who was a closet or “teepee” existentialist. Because death was his ever-present occupational companion, there was that easy familiarity, helping him to learn emotional detachment from everyday life — while enjoying the very tiniest pieces of it.…
Anytime you see the futures market indicate the Dow will open up about 25 points and then, within a matter of seconds, the futures indicate the Dow will instead open up 80 points — you know there is breaking news. If it happens on the first Friday of each month, you can bet the monthly “jobs report” was good. And, it was good today. Compared…
There are worse things than losing a war. One is to keep fighting a war that is already lost. The war to re-regulate the financial system has been lost, and we need to quit fighting it. Following the global financial crisis of 2008/9, it was not surprising that Congress laboriously constructed a new set of laws to improve regulation of financial institutions. That noble gesture…
Democrats argue we must mitigate the effects of climate change. Republicans agree — but add we shouldn’t spend any money until at least 100% of climate scientists agree on the causes and solutions. As someone who lives on a beach and doesn’t know a single climate scientist or climatologist, all I do know is that I have put my nose next to the exhaust pipe…
Everybody remembers the old Hasbro TV commercial that “weebles wobble, but they don’t fall down.” That’s how I felt when I watched stock markets around the world this morning. Virtually every market in every nation is down and down sharply. Of course, this is a reaction to the Russian invasion of Crimea over the weekend. Asia was down 1.0-1.5 percent overnight. Europe is down 1.5-2.0…
There is a serious effort underway to get more financial advisors to run for public office. It is a fairly safe assumption that the vast majority of financial advisors are at least vaguely familiar with sound financial practices, as well as investment vehicles. In fact, the fee-only financial advisors are even intimately familiar with the notion that they must do whatever is right for their…