Blog

13 Jan 2012

Posted at 15:33h in The Friday Brief by
If the attack ads between the Republican primary candidates seem negative now, we need only wait until the general election ramps up full court and speed to plunge to new depths of attacks on person and ideas. Our leadership and candidates for replacement seem bent on stressing the negative. Pessimism seems to trump optimism at every turn. Did you ever wonder why negative attacks are so effective, especially when we claim to prefer ideas, values, and optimism to characterize the public debate?

06 Jan 2012

Posted at 11:31h in The Friday Brief by
As we begin a new year we naturally hope for a better one than the last. In fact, much of the economic news released this week supports our hopes. Today the government announced that the unemployment rate fell from 8.6% to 8.5% with the addition of 200,000 more jobs. The results were all the stronger given that the labor pool (those seeking work) did not shrink has it has in previous months. There was also strengthening indicated in manufacturing, factory orders, and the construction industry. These are promising trends, but will they endure?

30 Dec 2011

Posted at 12:34h in The Friday Brief by
While 2011 was not as bad as some recent years, it is fair to say that most will happily bid it farewell hoping for a better one in its place. And to help the ‘fates’ along many will be extra vigilant in observing some traditions and superstitions.

02 Dec 2011

Posted at 11:48h in The Friday Brief by
It’s been a busy week in the world of finance. As you have no doubt heard, no thanks is due to the Congressional ‘super-committee’ in their failure to agree on cuts to the nation’s swelling deficit. Fitch, the last of the big three credit-rating agencies lowered the US credit outlook to negative making the probability of a downgrade from AAA greater than 50%. Retailers and investors popped Champaign corks on the news of Black Friday’s $11.4 billion record sales. US unemployment fell to 8.6% on the strength of 278,000 new hires and 315,000 Americans leaving the workforce. Manufacturing, housing, and construction data show improvement while American and European political leaders do not. 

18 Nov 2011

Posted at 12:05h in The Friday Brief by
Global investors and credit rating agencies alike are closely watching dramas on two world stages. The first is playing a very small stage with no audience and a limited run. The final curtain call for the Congressional Super-committee to reach their plan for cutting $1.2 Trillion from the federal deficit is just four days away, if you count the 48 hours required by the Congressional Budget Office to score it. The actors are evenly divided between protagonists and antagonists (depending upon your political point of view of course) working from the same economic script. In stark contrast, the second stage spans an area roughly the size of the southern and eastern United States, the actors are all protagonists, but in this drama each actor must work both from his own economic script while crafting a common script to save their European Union, their banking system, and their respective economies. 

04 Nov 2011

Posted at 12:08h in The Friday Brief by
The Federal Reserve Open Market Committee met this week and held to the major tenets of its monetary policy. Rates will remain unchanged at near zero; Operation Twist will continue to extend purchases of longer-term Treasuries; language that rates will remain exceptionally low through mid-2013; and principal payments from its holdings of agency debt will be reinvested in agency mortgage-backed securities. The Committee anticipates “a moderate pace of economic growth over coming quarters and consequently anticipates that the unemployment rate will decline only gradually.” The statement also said that the FOMC “anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee's dual mandate (inflation and employment) as the effects of past energy and other commodity price increases dissipate further.” 

28 Oct 2011

Posted at 12:10h in The Friday Brief by
Global equity markets popped yesterday, intensifying their October rally to 15% for the MSCI US Broad Market Index and 21% for the FTSE All World Index (ex-US). The enthusiasm was sparked by two events that equity investors broadly took as good news. European Union leaders agreed on a deal to theoretically end the two-year financial crisis with Greece at its center. And in the US, Gross Domestic Product grew in the third quarter 2.5%, more than was expected and following a 1.3% rate in the second quarter. But while conditions may be improving ever so slightly, the disease remains without serious work for cure.

21 Oct 2011

Posted at 12:14h in The Friday Brief by
Markets yo-yoed this week on news of Europe’s progress and lack of it in addressing their increasing debt concerns. Domestic economic news, both good and bad had little impact indicating that Europe’s problems may ours for months to come.

14 Oct 2011

Posted at 12:20h in Briefs about our Process, The Friday Brief by
Psychologists have uncovered a fascinating phenomenon about people at the racetrack. The moment after placing their bet on a horse they become much more confident of their horse’s chances of winning than they were immediately before placing their bet. Is it possible that the very same thing happens the moment we invest in a stock or a mutual fund?