Nov. 29 (Bloomberg) -- Jim Grant, Editor of Grant's Interest Rate Observer, discusses market manipulation by global central banks. He speaks on Bloomberg Television's "Bloomberg Surveillance." … [Read more...]
Archives for November 2012
VIDEO: ECRI’s Achuthan Defends Call for U.S. Recession
Nov. 29 (Bloomberg) -- Lakshman Achuthan, chief operations officer of the Economic Cycle Research Institute, talks about the U.S. economy. Achuthan speaks with Tom Keene and Sara Eisen on Bloomberg Television's "Surveillance." (Source: Bloomberg) … [Read more...]
Do Your Friends and Family Have a Better 401(k) Plan?
I was talking to a prospective client last week who wants help managing his 401(k). He is one of several doctors in a large practice in the Midwest, where he’s finally been promoted to a senior position that dictates how the practice runs its 401(k) plan. He persuaded the group to change the 401(k) to offer a self-direct option. It’s the only way to go. With a self-direct option, partners are able to use any firm they like to manage their money. They can work with one that invests in dividend-paying stocks, gold, foreign currencies, you name it. He said that in the past, this was not … [Read more...]
VIDEO: Stephen Roach : Quantitative Easing a Time Bomb
Reuters: Economist Stephen Roach worries that the Federal Reserve's approach to stimulating the economy will lead to a bubble. Roach also discussed with former FDIC Chair Sheila Bair and other panelists at Rand Corporation's Politics Aside conference in Santa Monica, Calif., whether the government will resolve the fiscal cliff. (November 23, 2012) … [Read more...]
VIX Index Signals Complacency
In this morning’s Wall Street Journal, Steven Russolillo and Kaitlyn Kiernan offer two perspectives on the low levels of volatility being telegraphed by the VIX Index. Some investors interpret the benign numbers as evidence that worries about gridlock in Washington and the slowing global economy are overblown. But others worry that the low readings are a sign of complacency, and that the potential for further declines in response to unexpected bad news isn't reflected in stock prices, even after the Dow Jones Industrial Average's decline of 4.4% since Oct. 5. You can put us in the category … [Read more...]
Americans: What do they Know about the Fiscal Cliff? Not Much it Turns Out
CNBC's Jane Wells goes to Fisherman's Wharf in San Francisco to find out whether Americans even know what the fiscal cliff really is … [Read more...]
A Sure Bet Gone Wrong
Fenway Sports Group is the parent company that holds John Henry’s ownership interests in the Boston Red Sox and the Liverpool Football Club. Last week, his money management firm, John W. Henry & Co., announced that it is closing. In its worst-performing programs, it has lost as much as 21% YTD and 32% over the past year. You can never afford to lose money, but it’s even more important not to lose it when you’re in retirement. What if you don’t own a baseball team or a soccer team to help you get through the tough times? I am sure there are a lot of people who used to be wealthy who … [Read more...]
It’s the Spending Stupid!
As congressional leaders and the White House begin to negotiate on the fiscal cliff we are hearing a lot about raising taxes on the “rich.” The debate has morphed from whether or not to tax the rich to how to tax the rich. Apparently, a majority of Americans bought into the President’s dubious campaign pitch about taxing millionaires and billionaires to solve the budget crisis. And based on the media’s coverage of the fiscal cliff—they did too. That’s a shame, because America doesn’t have a revenue problem. It has a spending problem. You don’t have to be a budget wonk to recognize that it … [Read more...]
Markets in the Age of Big Government
The economic data released post-election have not promised an easy return to office for President Obama. Jobless claims numbers (Chart 1) released today showed a spike in layoffs. True, some of these were Sandy related, but bigger losses came from Pennsylvania and Ohio where auto and manufacturing workers were laid off in large numbers. So much for that GM bailout. Trouble has also been showing up in the equity markets. Since the president was reelected, $650 billion dollars of wealth has disappeared from the value of S&P 500 companies (Chart 2). That’s in only six trading days. And … [Read more...]
Dr. Copper’s Diagnosis
The red metal is often called Dr. Copper, because it has a Ph.D. in economics. Copper seemingly knows before anyone else that the economy is headed into a recession. If that’s true, copper isn’t signaling a rosy forecast today. Take a look at our chart of the price of copper. Futures for the 1-month contract have been declining since a peak in February of 2011. The price has oscillated, but its peaks keep getting lower. Investors have been content to put a bottom on the price near $3.30/lb., but now prices are edging down once again. A drop below $3.30 could signal a coming recession. … [Read more...]