Michael Lewis' book Flash Boys has kicked the hornet's nest. Concern over high frequency trading (HFT) has never been higher. In one section of the book, Goldman Sachs execs express concern over HFT and the potential for a flash crash times ten. HFTs lurk in dark pools such as Goldman's Sigma X. It's more than coincidence that Goldman is talking about closing down Sigma X after the release of Flash Boys. Reuters reports: Executives at the brokerage firm have raised the subject of closing the dark pool trading operation, according to the Journal. Executives are evaluating whether the … [Read more...]
Archives for April 2014
Tax Freedom Day 2014
The Tax Foundation illustrates Tax Freedom Day 2014: … [Read more...]
Gold Signals Trouble
Gold prices signal distrust with Putin and the future of Ukraine. Reuters reports: Gold rose 1 percent on Tuesday on a sharply lower dollar and as renewed tensions between the United States and Russia over Ukraine burnished bullion's safe-haven appeal. The metal was also underpinned by official-sector buying after Iraq's central bank said it might buy more gold in the next few months, having bought 60 tonnes over the past two. Bullion prices have sharply pulled back from a six-month high near $1,400 an ounce in mid-March as geopolitical tensions eased after Russia officials said the … [Read more...]
Bitcoin the Right Idea
The only way the U.S. government is going to pay down its mountain of debt is to inflate away the U.S. dollar. With that in mind, it’s thievery that the IRS has ruled that Bitcoin transactions, with net gains, will be taxed as capital gains. The government hates any alternative to the smoke and mirrors trick they play with the U.S. dollar. A replacement currency would hinder the government’s profligate spending and prevent them from sticking it to their creditors. A replacement currency is exactly what we need. Here’s more on the cap gains issue from the Tax Foundation: The price of the … [Read more...]
Vacation Homes are Booming
One of the many possible joys of retirement is owning a vacation home. It’s nice being able to look for a place to live where you actually want to spend your free time, as opposed to targeting the best school zone. But don’t worry, the kids will visit. Here in the LA Times we get a glimpse of the recovering vacation home market. These buyers tend to have money. The market for a place at the lake is hopping. Sales of vacation homes jumped nearly 30% in 2013, the National Assn. of Realtors reported Wednesday, and second-home purchases made up their biggest share of the housing market since … [Read more...]
Yellen’s Trip off the Reservation
As if there was any doubt that the Federal Reserve is a political beast, Chairwoman Janet Yellen confirmed it with these comments: "Jermaine Brownlee was an apprentice plumber and skilled construction worker when the recession hit, and he saw his wages drop sharply as he scrambled for odd jobs and temporary work. He is doing better now but still working for a lower wage than he earned before the recession." Well if the Federal Reserve had kept rates at a normalized level through the good and bad times then we wouldn’t have this stop and go economy/real estate market. Someone in Washington has … [Read more...]
The Three Most Important Words in Investing
According to the man who taught Warren Buffet how to invest the three most important words in investing are: margin of safety. In his book, The Intelligent Investor, Benjamin Graham wrote: “The margin of safety is always dependent on the price paid. For any security, it will be large at one price, small at some higher price, nonexistent at some still higher price.” From The Telegraph’s “How to Invest Like…Benjamin Graham”: Graham brought this idea to life with his invention of a character called “Mr Market”. Imagine, he said, that you own a small share of a business in which one of the … [Read more...]
The Most Surprising Map of the Year
I was keyed into the most surprising map of the year while reading this article in the Financial Times. If you put your finger on a map of the U.S. where do you feel you’d need to live to justify renting a three-bedroom, three-bath apartment for $4,500 per month? How about a 700 square foot one bedroom for $2,000 per month? This may not be where you had in mind, courtesy of the Apartment Guide Blog: Welcome to Williston, North Dakota, where the oil industry has caused the population to more than double in the past five years. And, according to Apartment Guide data, you’ll pay more to live in … [Read more...]
As Rich as Bill Gates
What do Bill Gates, Warren Buffett and Paul Krugman have in common? Higher taxes for you. Mr. Gates believes that when tax rates are below 50 percent there’s room for additional taxation. That’s just great. As long as they've made their money, right? Rolling Stone interview: Rolling Stone: Let's talk about income inequality, which economist Paul Krugman and others have written a lot about. As a person who's at the very top of the one percent, do you see this as one of the great issues of our time? Bill Gates: Well, now you're getting into sort of complicated issues. In general, on … [Read more...]