17 Jun 2011

Posted at 14:30h in The Friday Brief by
Rising incomes and asset prices cover a lot of sins. For decades, consumers, businesses, and most notably our government, enabled by a steadily expanding standard of living, have adopted excess as an entitlement. The overwhelming impact of years of excessive spending and over-borrowing is becoming increasingly acute as none of the usual remedies is working. Wasteful government stimulus (with a few possible exceptions from T.A.R.P), Fed-controlled interest rates at near zero for years, and quantitative easings 1 & 2 (Fed buying US debt) have all fallen well short of their usual potency. We seem to have hit the wall; our excesses have finally caught up to us. 

10 Jun 2011

Posted at 14:32h in The Friday Brief by
George Bernard Shaw once said “if all economists were laid end to end, they would not reach a conclusion.” Someone later added that laying them end to end would not necessarily be a bad thing. At any rate, Bloomberg news reports that 67 of them recently polled, called for economic growth to resume in the second half of this year. The median estimate is for 3.2% growth following a disappointing 2.3% this latest quarter. They say that “rising exports, stable fuel prices, record levels of cash in company coffers and easier lending rules will be enough to overcome the damage done by one-time events like poor weather and the disaster in Japan.” They also expect that the Fed will wait even longer to raise interest rates next year.

27 May 2011

Posted at 14:40h in The Friday Brief by
There were a few bright spots in an otherwise gloomy week for economic data. New home sales in April jumped over 7% and drew down new-home supply to 6.5 months. Corporate profits were up an annualized 25.6% for the first quarter. And personal income rose 0.5% in March as wages and salaries rose a modest 0.3%. But, from there the news was less encouraging. The government’s second estimate of economic growth for first quarter GDP was no higher than it’s initial estimate of only 1.8% annualized. Initial jobless claims rose 10,000 last week to a 424,000 level. And on the manufacturing front, damage from interrupted Japanese supply lines began to show in the numbers. 

20 May 2011

Posted at 14:48h in Briefs about our Process, The Friday Brief by
If you’ve invested long enough, it’s almost certain that you’ve been made to feel less than knowledgeable, either by your advisor (unwittingly, of course) or by ‘Mr. Market.’ People invest for as many reasons as there are people. Today’s Brief addresses the purpose of the vast majority of investors; that of saving to replace the paycheck. Some call it retirement, some call it freedom from salary, others refer to it as their second half, and still others call it doing what you really want to do, or were meant to do all along. Whatever you call it, it happens when you begin depending on your investments to see you through life, no longer relying on what is commonly referred to as ‘your day job.’