Have you been to http://www.usdebtclock.org lately? This website is complex but fascinating. Most people focus on the total debt of the U.S. government, which is now over $19 trillion. While that has continued to increase during the recession, the more important ratio of that debt to GDP has been decreasing . . . until now. Please find that number of the website, near the middle but…
Saturday was my second attempt to avoid political news on television, with all its breathless hyping of trivia, for a single day each week. It was easier than the first attempt last week. Between social duties, I watched The Golf Channel and almost finished reading another book. Three times during the day, I checked the Bloomberg website, to make sure there were no economic or geopolitical…
Some of the latest predictions from the good people in the research department of investment giant Goldman Sachs are: 1. The S&P 500 will rise to 2,025 over the next three months and 2,100 over the next twelve months, which would be an 8.2% increase!2. European stocks will rise even more – up 11.1% over the next twelve months.3. Asia will rise 12.1%, with the…
Liberty requires autonomy or independence of the individual. One of the things I enjoy about New York City is the knowledge that I can glide through masses of other people unseen and unknown. I don’t know them, and they don’t know me, and that’s okay. The middle of crowds can be a very lonely place, but that can also be very enjoyable. I am autonomous…
Ever vigilant for another financial crisis, I have fretted about the possibility of a simultaneous commodity crisis, currency crisis, and credit crisis. My conclusion was that the possibility of another recession may have increased but not necessarily the possibility of another financial crisis. Part of my thinking was that the much-discussed Chinese banks are not the zombie banks that we all fear, despite all that…
Yesterday was my first attempt to minimize my intellectual and emotional pollution by avoiding television news for one day each week, normally Saturdays. The day got off to a bad start. When I turned on the TV, a news channel popped up. Not to be a purist, I learned that I need to change channels before I go to bed at night, so a news…
Are we going to have another financial crisis? Absolutely, but we will survive it, just like all the others. More importantly, are we going to have another financial crisis in the near future? A month ago, I was worried. Today, I am less so. My concern was that a perfect storm of a commodity crisis, a credit crisis, and a currency crisis were hitting us…
Everybody knows about recessions, as we normally have one every 4-8 years and are due for another. The conventional definition is that GDP must drop two consecutive quarters, usually at an annualized rate of about 3%. Despite the fact that investors invariably over-react to the first hint of a recession, the really scary thing out there is not a recession . . . but a…
The novice investor tries to buy a stock when it hits a low and sells it when it hits a high. What could be wrong with that? After all, doesn’t everybody say “buy low and sell high?” As wonderful as that sounds, numerous studies have shown that “market timing” seldom works in the short-term term and never works in the long-term. As Warren Buffett has…
Some of us are expected to be mind-readers at best or soothsayers at worst. Because of that, we are usually more forgiving when others in our profession are proven wrong . . . unless it is the legendary Goldman Sachs, of course. On January 28th, Russia called for talks with other oil-producing nations to limit production in order to raise the price of oil. Goldman…
At first, I felt guilt . . . then quite quickly, I felt relief . . . great relief. I had forgotten to watch the presidential debates at 9PM on Saturday night. I wasn’t surprised by the guilt, as I’ve always tried to be an analytic, dispassionate voter and do try to watch such events. But, I was surprised at the sense of relief. It…
Excess emotions produce bad decisions. Did you feel bad when the Dow lost 300 points on Thursday? How bad?Did you feel good when the Dow rose 300 points yesterday? How good? I’ll bet the strength of your bad feelings on Thursday was greater than the strength of your good feelings on Friday. That’s because the pain of loss far exceeds the joy of gain. You…
Readers know I have no fear of recessions nor bear markets. We have experienced many of both and know they always end. There is no “sky is falling” concern to recessions or bear markets. However, I have been very worried about a financial crisis, which is like a heart attack. It comes suddenly, and recovery is slow. The usual channel for a financial crisis is…
What’s the difference between a doctor and a financial advisor? The obvious difference is that the doctor is worried about your physical health, while the financial advisor is worried about your fiscal health. Another difference is that doctors are frequently asked for free advice at cocktail parties and other places. Financial advisors are also frequently asked for free advice. The difference is that there is…
An old rule of thumb on Wall Street is that corrections (down 10%) can end with a roar, while bear markets (down 20%) end with a whimper. In other words, there has to be capitulation or surrender by the investors, when they can no longer take the pain. Getting to capitulation sooner rather than later means the pain ends sooner rather than later. Bring it…
I attended a disturbing lecture on Saturday. About 30 minutes into the lecture, the speaker stopped abruptly, producing an awkward silence. His facial expression became trance-like. Finally, he said “I’ve been diagnosed with stage 4 cancer.” There was an audible gasp among the hundred or so attendees. He went on to say that, while he recently learned the cancer is in-remission, his doctor also told…
Tucker Carson is an industrial-strength Republican, and Paul Begala is an industrial-strength Democrat. While I hold no great respect for partisans of either flavor, I did attend a debate between them recently and actually enjoyed the experience. There was the obligatory hyperbola, of course. Carlson predicted Trump would never win the nomination, because he is “emotionally incontinent,” meaning his ego will eventually overwhelm political good-sense.…
There are lots of geopolitical “experts.” Ian Bremmer is one of them — the one who created The Eurasia Group, a highly regarded consulting firm, However, he specializes in that intersection between geopolitical events and stock markets, worldwide. I had the pleasure of attending a lecture by him today. In no particular order, here are some of the things I learned about the Mideast: 1.…
The “wild and crazy” stock market is testing some critical support limits. Take a look at this chart: From a technical viewpoint, if it pierces the green line, it will go much lower. My expectation is that it will pierce the line and go lower, almost entirely because we pay too little for gas at the pump. The oil industry is huge and hurting. More…
Now that the Iowa caucus is over, I have only one question — is it November 8th yet?? It would be refreshing to see news coverage again, without such breathless coverage of The Election!