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Yellen’s Trip off the Reservation

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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

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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

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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

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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...]

Flash Boys

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I downloaded my copy of bestselling author Michael Lewis’ new book Flash Boys today. Lewis appeared on 60 Minutes last night: … [Read more...]

How to Lose a Billion Dollars

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That's what's happening over at Pimco as money continues to exit the bond fund managed by Bill Gross. The Pimco Total Return Fund, the world's biggest bond fund, is on track to end the first quarter trailing 87% of its peers, the latest setback for high-profile portfolio managerBill Gross. The $236.5 billion fund posted a year-to-date total return of 1.28% through Thursday, according to data from fund tracker Morningstar Inc. MORN -0.78% The benchmarkBarclays BARC.LN +0.32% U.S. Aggregate Bond Index, which serves as a gauge for a wide variety of bonds but is dominated by highly rated debt, … [Read more...]

Candy Crushed

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Who' buying this crap? Nice open for Candy Crush. SAN FRANCISCO (MarketWatch) — “Candy Crush” got crushed. That was the popular way to describe the social game maker’s public trading debut, as King Digital’s stock tumbled from the opening trade. King KING +1.46%  shed 15.6% to close at $19, the worst trading debut this year, according to data from Renaissance Capital. The company priced its initial public offering at $22.50. The drop was so steep that analyst Scott Sweet, senior managing partner at IPO Boutique, said the IPO was hit by “extremely fast money,” as investors appeared to … [Read more...]

Welcome to America!

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Following the money is always a good idea. Ian Talley of The Wall Street Journal explains that rising stock prices led to a new record in the value of foreign owned assets in America in the fourth quarter of 2013. Foreign investment in the U.S. hit a fresh record in the final quarter of 2013 as rising stock prices boosted the value of American assets, according to figures released Wednesday. The value of foreign investment in the U.S. hit $26.54 trillion the fourth quarter, up $777.8 billion from the previous quarter and far surpassing a $372.1 billion increase in U.S. investments abroad, … [Read more...]

Dow Theory Breakdown

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There's trouble a brewing according to Dow Theory. The Wall Street Journal's Paul Vigna reports here. This time it's Dow theory adherents, who are troubled that there's been a breakdown this month that could spell trouble for the bull market, according to research the Wall Street Journal cited Tuesday. The market looked weak on Monday, saved only by a late spurt of buying that narrowed the losses. It may not be the last time it looks weak. The much ballyhooed Dow Theory is flashing a warning sign: While the Dow Transports made a new high in March, the Dow Industrials did not. The … [Read more...]

Bitcoin Tax Grab

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The latest in the Bitcoin tax grab. Bloomberg's Richard Rubin and Carter Dougherty explain how the IRS has made it more difficult for Bitcoin users to make purchases by classifying the crypt0-currency as property for tax purposes. The U.S. government will treat Bitcoin as property for tax purposes, applying rules it uses to govern stocks and barter transactions, the Internal Revenue Service said in its first substantive ruling on the issue. Today’s IRS guidance will provide certainty for Bitcoin investors, along with income-tax liability that wasn’t specified before. Purchasing a $2 cup of … [Read more...]