Q. What happens when you put three Republicans in a room to write a report? A. BSQ. What happens when you put three Democrats in a room to write a report?A. BSQ. What happens when you put a Republican, a Democrat, & a Independent in a room to write a report?A. Sadness I salute the efforts of Republican Hank Paulsen, former Treasury Secretary under Bush,…
My father was a proud veteran of World War II and participated in the liberation of the Auschwitz concentration camp, where countless Jews were murdered. He never talked about the horror of it, except to recall how hard the ground was (as only a farmboy would) . The fact that he wouldn’t talk about it and chose instead to focus on the hardness of the…
In the vein of Freakonomics or finding economic principles in everyday life, please enjoy this review of the Oscar-winning movie: http://econstories.tv/econpop-dallas-buyers-club/
Suppose you own $200 million of XYZ Company stock and want to sell half of it. If you simply hit the SELL button and flood the market with stock, the price will go down, reducing the value of the stock you sold, plus the stock you kept, plus the value of stock held by other stockholders. That is because all transactions on the public stock…
After a ten year bull market, gold has been leaking value for the last three years. However, technical analysts think it may be getting ready for another bull run, because it is pushing up against the red resistance line in this graph. To a fundamental analyst like myself, I see the recent strength in gold as a normal reflection to increased anxiety in Iraq .…
For most of us, there is no greater pain than the loss of a loved one. Fortunately, psychologists assure us that the pain decreases over time. But, what about the loss of a right? Felons tell us that losing the right to vote, for example, is always an annoyance. The elderly tell us that losing the right to drive is an annoyance. However, since losing…
Let’s see . . . the labor market is improving, albeit slowly but steadily improving . . . corporations are highly profitable and sitting on a trillion dollars in cash . . . May home sales were the highest in seven years . . . consumer confidence is at the highest point since the global financial crisis . . . what, the Dow lost 119…
Some twelve years ago, I read The Clash of Civilizations and the Remaking of World Order by Samuel Huntington. It was a brilliant book and became a framework for much of my thinking, even for more mundane things. He argued that civilizations have become more important than nations or states. An example would be our Western Civilization speaking romance languages, compared to the Eastern Civilization or…
The Conference Board has been around since 1916 and is a private, non-governmental research body funded mostly by corporate contributions to do economic research. It is well-respected and well-known for two reports in particular. One is the Index of Consumer Confidence. The other is the Index of Leading Economic Indicators or LEI, which predicts economic conditions during the next few months, generally assumed to be…
Just imagine that your congressman stood on the House floor and proposed spending another $175 BILLION that is not providing any new service to Americans nor enhancing any existing service nor building any infrastructure nor financing any new wars. Would you ever vote for him/her again? A one percent increase in interest rates on our national debt will cost us an additional $175 BILLION every…
Asset Protection Trusts (APT) are designed to protect assets from lawsuits and ex-spouses and have existed for many years. During my trips to Switzerland in the 1990s, I studied them closely and also became convinced that there are more crooked financial advisors pushing these trusts than any other field in financial planning. Normally, I urge clients to avoid APT for a host of reasons —…
Wednesday is a Fed Day, which means the stock market will continue to simply churn, as it waits for some statement from the Federal Reserve Bank, usually at 2:15 PM. As is normal, they have to make an important decision based on incomplete and contradictory economic data. And, by the way, they are also human. You’ll recall the Fed is the only central bank that…
I avoid listening to either Republicans or Democrats talk about ObamaCare. Both have their spinning points and sound bites. Thank God for Carolyn McClanahan, who is both a medical doctor and a financial planner. I promise you that she understands ObamaCare better than Obama does. You can read her latest blog at: http://www.forbes.com/sites/carolynmcclanahan/2012/05/03/what-happens-to-the-train-that-left-the-station-on-obamacare/#post_comments
As a strapping young soldier, I was a paratrooper and “jumped out of perfectly good airplanes.” Most jumps were from 800 feet, although a few were from 4,000 feet. Yesterday, 90-year-old former President George H. W. Bush jumped from 6,000 feet. (Sure, it was a tandem jump, meaning he was harnessed to somebody else, but his legs are now useless. It is all good!) Mr.…
It is just sad! Nobel Prize-winning economist Joseph Stiglitz has estimated the cost of the Iraqi War at more that ONE TRILLION DOLLARS. In addition, almost five thousand Americans died in that rat-hole. And, what about the tens of thousands of young Americans still dealing daily with the physical and emotional wounds from that war? My father was just a young farm boy, when World…
Society gives a great deal of respect to doctors, and they deserve it! They spend many years studying our bodies, our ailments, and our medical needs. However, I just attended a class on medical insurance and now wonder whether the practice of medicine is really more difficult than medical insurance. For example, a doctor must learn that the gall bladder produces bile that empties into…
President Harry Truman famously wished for a “one-armed economist.” He was tired of economists who say “on one hand . . . and on the other hand.” Unfortunately, that is the nature of discussing the myriad aspects of economics. There are 130 economic data points released most every month. Economic data always contains reasons to worry about something. Currently, most economic data is looking…
Long-time readers know I value most lawyers as being one step below mafia hit men. (Unfortunately, lawyers are blinded to their own banality by the respect given to their education.) And, I respect courts only because they command little men with big guns. But, sometimes I do appreciate our courts, at least a little. As part of the economic restructuring in the wake of the…
The stock market is hitting record highs — YEA! Is it time to break out the champagne? No, but you can always celebrate NOT hitting record lows. But, are these record highs really record highs? No, not on a real inflation-adjusted basis! Take a look at this graph: Readers know I am not a fan of “technical analysis” which relies on graphical relationships to study…
Which of these truths is untrue: (1) we leave no troops behind, (2) we don’t negotiate with terrorists, (3) innocent until proven guilty, or (4) spin is more important than truth. Answer: None! As a soldier, it means so much to have confidence you will not be left to rot in some God-forsaken rat-hole forever. But, we have left troops behind before. If I was…
The U.S. entered the global financial crisis of 2008 first. Remember Lehman Brothers? Tim Geithner, who was Treasury Secretary for much of the recovery, has been strongly criticized for saving the banks instead of saving the taxpayers. He bailed-out bank after bank with one hand. However, with the other hand, he and Ben Bernanke raised the capital requirements for U.S. banks, making them stronger. In…
It is a rare month indeed that the U.S. “jobs report” is NOT the most important report of the month. It is always released on the first Friday of the month, which would be this Friday. However, the European Central Bank (ECB) will make an announcement on Thursday that over-shadows our “jobs report.” Europe’s GDP growth has stalled. One reason is that the euro has…
One afternoon, as a 13-year-old paperboy, I was riding home on my bicycle, with the big metal basket over the front wheel for the newspapers, when a pick-up trust drove by. In the back, there were four black boys about my age, who had obviously been picking walnuts as the pick-up truck was loaded with them. They slowed down and began pelting me with the…
Over the years, I’ve met several economists at the Institute of Supply Management and found them to be as nerdy and humor-challenged as most academic economists. Each month, they publish the closely watched ISM Index of Manufacturing. Anything above 50 means the economy is expanding. Anything below 50 means the economy is contracting. Yesterday, the market was expecting 55.5 for May. Promptly at 10 AM,…
I have always believed there is a God, but I just realized he is European. Last week, somebody actually had the courage to stand up to Google. Since only a God could stand up to the power of Google, the European high court must therefore be God? Google, whose official motto is “Do No Evil,” has arguably done more to shred the privacy of individual…
There has long bee considerable argument within the investment community as to whether active management outperforms passive management. In other words, is it worth it to pay higher expenses for an active mutual fund with a manager who buys and sells stocks frequently, when you could reduce your expenses by investing in a static or passive exchange-traded-fund that mimics, say, the S&P 500 or the…