14 Nov 2008

Posted at 13:29h in Briefs about our Process, The Friday Brief by
Information travels faster than ever now which tends to amplify panics and crises. The natural herd tendency to sell or buy is fanned by the rapid flow of news, often in its raw state. Globally linked computerized exchanges make buying and selling more efficient and faster than ever. What is crystal clear in this time of crisis and uncertainty is that we have no control of the markets (short of shutting them down). They are bigger and more powerful than any government and they will find their equilibriums in all circumstances. Predicting or timing them is all but impossible, especially over full cycles.

08 Nov 2008

Posted at 13:40h in The Friday Brief by
Those of us over 40 don’t need reading glasses to know how bad the news is; headlines are full of it. And there is plenty to come in the weeks and months ahead. The economy is collapsing at an astonishing rate as we enter the self-perpetuating recessionary cycle. Banks aren’t lending because they are afraid of the coming recession and the recession is growing deeper because banks aren’t lending. Businesses are firing because demand is evaporating and demand is evaporating because businesses are firing. House prices are falling because no one is buying, and no one is buying because prices are falling. The worse the news gets, the more the consumer hunkers down.

30 Oct 2008

Posted at 13:58h in The Friday Brief by
With each passing day more of the dark corners of uncertainty are illuminated. A few goblins lay in wait to surprise us in the coming weeks (like pension funds and corporate real estate), but most have reared their ugly heads by now. The world’s financial system is slowly and systematically being purged of its ills, though recovery will be a long and painful process.

24 Oct 2008

Posted at 16:35h in The Friday Brief by
Everyone is wondering if there is a bottom? Markets around the world tumbled yesterday on the same fears driving our markets down. How badly will a global recession hurt corporate profits? As investors sell on earnings fears, they exacerbate the fragile stability of the credit markets – a self-perpetuating spiral. Every drop in stock prices reduces further the assets of banks and corporations, suggesting that an increasing number of them will have trouble paying their debts.