Pension, Election and Hurricane Reflections
Pension: There was a provision in the Highway Bill passed in July that allows companies to calculate their future pension obligations by using longer-term interest rates instead of the current low interest rates. The impact of this is that current earnings will be overstated for those companies that choose to use this method and pension […]
The problem with socialism is that sooner or later you run out of other people’s money – Margaret Thatcher, Prime Minister of Great Britain
In our last update, we talked about the Bavarians and Catalonians’ desire to separate from Germany and Spain respectfully. There is now a separatist movement in of all places – Belgium. Recently, in local elections, separatists had sweeping gains in Belgium. Venice now also wants to separate from Italy. What is interesting to note is […]
Self-determination – the EURO's end?
Saving the Euro, at any cost, has been a mainstay of politicians throughout Europe. It has been our contention that the Euro will eventually collapse because of the social stresses caused by the economic stresses of keeping it together. The unemployment rate in Spain is almost matching that in Greece and more people are forced […]
Our Open Letter to Ben Bernanke
Dear Ben: When the financial crisis hit in 2008, we were glad to have your expertise at the helm of the Federal Reserve because of your keen knowledge of the Great Depression. Your courageous moves of 0% interest rates and QE1 were steps in the right direction to ensure there was enough liquidity in the […]
Thoughts on Economy – Market Implications
We have all heard the saying “this time is different”, and in this case it may be. On the other hand, it may not be. The stock market has been heading higher the past few months despite economic data that continues to show global weakness. Below is a chart showing the Purchasing Managers Index (“PMI”) […]
Where to make money – Patience is key
Just like in 1998 when Asian markets and currencies collapsed, Europe might be the next best investment once the Euro falls – if it doesn’t drag on in such a way that it destroys the social structure of Europe. There is, in our opinion, another investment idea that might be more potent. This idea is […]
Dividend paying stocks – Are they a safe bet?
What a difference a decade makes. At the beginning of 2000, if you mentioned that you should be buying high dividend paying stocks at a cocktail party, you would have been laughed at as a complete idiot. Now, many pundits advocate buying mega cap, dividend paying stocks. These stocks are also being touted as a […]
Market Update
“Insanity: doing the same thing over and over again and expecting different results” – Albert Einstein Countries in Europe are trying to tackle their economic problems with announced austerity measures. Some of the proposed austerity measures include: – Increase the VAT (Value Added Tax on goods consumers buy) from 21% to 23%. – One time tax […]
The Last Dance
Who can blame the Greeks for voting to stay in the Euro. Their credit cards are maxed out and this vote will give them another card. Even if it is for a short time, it keeps the party going. The Titanic – in this case the Euro – is getting closer to the iceberg and […]
"We Don't Get Fooled Again" – The Who
Many thought that the Spain bailout would lift the markets higher, and it did temporarily. Yesterday, 10-year rates on Spanish bonds dropped from 6.20% to 6.00% in the first few hours of trading, but quickly rose to 6.48% by the close. This morning, the rate is already over 6.7%. The bond market is voting and […]