For convenience, I have long divided the vast field of economic theory into three schools. First is the Austrian school, which requires balanced budgets every year. Second is the Keynesian school, which advocates deficit spending during weak economic conditions but surplus spending during strong economic times. (History shows elected politicians use strong economic times to expand entitlements instead of repaying debt.) Third is the supply-side…
I love my guns! If you use them frequently, you learn enough of their different characteristics that some seem to develop personalities. I’ve actually given names to some of them. To paraphrase some dead guy, “they” will take away my guns when “they” pry my cold dead fingers out of the trigger guard. Still, the NRA is crazy! The National Rifle Association (NRA) has caused…
“Neither a man nor a crowd nor a nation can be trusted to act humanely or to think sanely under the influence of a great fear.” – Bertrand Russell
Tuesday’s stock market action was bizarre. As indicated by the futures market, the Dow opened very strongly. At one point, it was up 441 points. Around 2PM, it started sinking – faster and faster. At closing, it was dropping like a rock and closed down 205 points. — a 646 point in one trading day — simply bizarre! This begs the question: what breaking news…
The main Chinese stock exchange lost another 7.6% last night, which is a slight improvement over the 8.5% loss the previous day. This morning, the futures market indicates that the U.S. stock market will open higher, much higher. One reason for the strong futures indication is that the People’s Bank of China (PBOC) just announced a cut in interest rates and an easing in bank…
The longest 36 minutes of my life began at 2:32 PM on May 10, 2010 as I watched the stock market lose 998 points, which was a whopping 9% of its value. Barely breathing, I knew it was irrational and therefore not sustainable. The economy had certainly not fallen 9% and showed no evidence that it might. The international flow of capital was stable. There…
If you are dieting . . . then taking a cruise is not for you. If you have claustrophobia . . . then taking a cruise is not for you. If you enjoy racial diversity . . . then taking a cruise is not for you. If you enjoy fine dining instead of mass feedings . . . taking a cruise is not for you.…
In 1968, I graduated from Infantry Officer Candidate School and then Parachute School. Earlier, I had also applied for Ranger School (8 weeks) or Special Forces School (21 weeks). To my surprise, I was given my choice and chose Special Forces. That decision has been on my mind this week, with the good news that the first two women have graduated from Ranger School. Twenty…
The U.S. stock markets are down almost 5%. Is the world falling apart? Well, we are halfway to a technical correction (down 10%) and may be facing a genuine bear market (down 20%). Does that mean we should be scared? I don’t know of any investment analyst who doesn’t think that corrections or bear markets are good for stock markets in the long run. But,…
The defense industry is not the most powerful industry in the world. It merely produces the means to kill millions of people. The most powerful industry in the world is the advertising industry. It changes the way millions of people think and make decisions. The objective of the advertising industry is to change the way people perceive reality and make decisions, usually buying decisions but…
It has been an old Wall Street adage that it is always “facing a wall of worry.” There is the normal run-of-the-mill crisis that rotates into and out of our focus, such as the Greece default or Chinese yuan devaluation. Then, there is the long-term overarching fear of the Fed. It is the default fear. If there is no crisis today, let’s all fret about…
As sure as Spring follows Winter, there will be stories of stockbrokers cheating their clients. The latest appeared in the local paper on Sunday. It was about a stockbroker who sold phony investments to his trusting clients. While there are certainly honest stockbrokers, when was the last time you heard about a NAPFA-Registered Financial Advisor who sold phony investments to their clients?? Stockbrokers are simply…
Brilliant professionally and affable personally, my favorite investment guru is Jeremy Seigel of Wharton. I follow his thinking often. While he is not yet predicting it, he would not be surprised if the stock market entered correction territory, which is a 10% fall. He feels this is possible due to the lack of breadth, that small cap stocks are lagging large caps, and that the…
For years, China was known as a “currency manipulator” which is a pejorative in international finance akin to “cop killer” in polite society. Never willing to admit they stopped doing something they always denied, China began unofficially pegging their currency, the yuan, against the dollar. Once the U.S. stopped quantitative easing and Europe, along with Japan, began quantitative easing, the dollar became much stronger. While…
The Newseum is a wonderful museum dedicated to explaining the industry that reports news (in exchange for advertising dollars, of course). Originally located in Rosslyn, Virginia, across the Potomac River from the nation’s capital, it was relocated inside the District a few years ago. One exhibit in particular fascinates me. They are able to download & exhibit some 20-30 newspapers from around the world, in…
After seven straight down days on Wall Street, which hasn’t happened in four years, it is time to remember a few definitions. First, there are both bull and bear markets, which means the trend is for the market to be going either up or down, respectively. Second, there are bull market corrections and bear market rallies. The upward trend of bull markets are almost always…
. . . will ever rival the breathtaking beauty of Alaska on a sunny day . . . WOW !!
Financial analysts fall into two broad, very broad, categories. First, there are the fundamentalists like myself, whose forecasts reflect their reading, their correlation of facts with data points,and that certain cynicism grown from long experience. Second, there are the technicians or chartists, whose forecasts reflect their ability to read many highly technical graphs. While I don’t rely on technical analysis, I do follow it. The…
