Blog

09 Jul 2010

Posted at 15:19h in The Friday Brief by
Economic data reported during this holiday-shortened week was particularly light; perhaps facilitating the market’s rebound of 4.5%. Global markets rebounded as well as investors realized the world’s economy was not cliff-bound. Europe’s credit implosion has dampened growth, but evidence so far indicates it will not stall the recovery.

02 Jul 2010

Posted at 15:39h in The Friday Brief by
Paul Krugman in a column in Monday’s New York Times shook up the financial press and investors alike with his claims that “The Third Depression” may be upon us because of the “triumph of orthodoxy” evidenced in the G20’s endorsement of deficit reduction. Krugman a liberal economist and staunch Keynesian believes that government stimulus is the only way to create jobs, and that belt-tightening at this time would be disastrous. Unfortunately, the bond and stock markets seem reflect a similar fear at present with the benchmark 10-year Treasury at just over 3%, a level not seen since April 27, 2009, and the S&P 500 Index sliding to a nine-month low yesterday.

25 Jun 2010

Posted at 15:47h in The Friday Brief by
The ‘green shoots’ of economic recovery characterized by Ben Bernanke in mid 2009 are withering as the housing slump drags on, unemployment remains chronically high, consumer spending remains stagnate, Europe’s debt crisis eludes resolution, state governments grow increasingly insolvent, and the economic and ecological catastrophe in the Gulf grows worse by the day. For the second time, the government revised downward their estimate of US gross domestic product from to 2.7%. The first estimate was 3.2%, followed by a correction to 3.0%. Year over year real GDF (inflation adjusted) is up 2.4%, compared to up .1% for the fourth quarter.

18 Jun 2010

Posted at 16:04h in The Friday Brief by
There are plenty of stories of how smart or lucky investors made millions of dollars through unique investment ideas, schemes, or methodologies. There are indeed still billions, even trillions to be made by those who make large gambles and bets. Our purpose is not to suggest that the pursuit of market-beating returns does not have its place. There are indeed many investors with talents, knowledge, and acumen to do so. Rather it is our purpose to demonstrate that the performance pursuit is unnecessary and even dangerous for any investor with more important goals; such as educating children, retiring comfortably, or funding scholarships, grants, or buildings.

11 Jun 2010

Posted at 16:17h in The Friday Brief by
Since falling steadily during much of May by 12%, equity markets have traded within a 4.5% trading range since May 21st. Investors are struggling to assess what impact the worsening European debt crisis and China’s lending curbs will have on the US and on the larger global economic recovery. Since the breaking news of each, $6 trillion has been erased from equity markets worldwide. 

04 Jun 2010

Posted at 16:43h in The Friday Brief by
Employment generally begins to rise a few months or quarters into a typical economic recovery. Businesses see demand for their products and services rise faster than they can fill orders. The last bit of productivity squeezed from their workers and plant, they must hire. But when will we reach that point? We are in recovery from the ‘Great Recession?’ European debt concerns, slowing growth in China, and the greatest man-made oil spill in world history all serve to derail the chugging recovery.

28 May 2010

Posted at 15:47h in The Friday Brief by
Events of the past few weeks have rattled the confidence of even the most stalwart of optimists and caused more than a few to question fundamental tenets of the economy. How can millions of gallons of oil flood the Gulf and not permanently ruin that ecosystem and the livelihoods of millions of people who depend upon it? How can markets be called efficient when an aberration can cause the loss of a trillion dollars in mere minutes? How can the Euro survive a potential default by Greece and survive?

21 May 2010

Posted at 15:57h in The Friday Brief by
Yesterday represented the seventh down day in a row for the S&P 500’s, putting the average just 6 points above the low it reached during the technical panic of May 6th. It is 10.2% off its recent high of April 23rd and 3.9% down for the year. Long term US Treasuries on the other hand are up 9.5% since the high and 11% so far this year. Selling over the past three days was amplified when German Chancellor Angela Merkel banned some types of speculation against government bonds and financial institutions. The move was ill-received by investors in general but particularly in Europe as traders there drove the Stoxx Europe 600 Index down 7.2% in just three days. Other governments have not followed suit with the ban.

14 May 2010

Posted at 16:08h in The Friday Brief by
As Europe wrestles with its own version of ‘too big to fail,’ speculation is rising that the Euro might not survive the sovereign debt crisis. Greece may not be able to repay its debt in full, but the problems of fiscal irresponsibility are broader and may take more than the almost $1 trillion already pledged.

07 May 2010

Posted at 16:12h in The Friday Brief by
Fears of a debt contagion in Europe got the attention of US investors this week. As of Friday morning the NASDAQ is off 7.2% the S&P 500 is down 6.2% and the FTSE All US Index is down 6.5%. The S&P Europe 350 is down 11.6% for the week and 16% over the past 30 days. Worried Bond investors flocked to the relative safety of US Treasuries driving intermediate and long-term bond indices up 2.2% and 5.6%, respectively, for the week. Concerns that severe fiscal problems in Greece, and growing pressures in Portugal, Spain, Ireland, and Italy might cripple the European recovery along with reports a few forecasts that China is months away from a burnout started a selling wave that grew throughout the week.