Last week I was listening to the business update on the local AM news station and the host was going and on and on about the NASDAQ hitting 3000 for the first time in over 10 years. It brought me back to the heady days of the dot.com boom in the late 90’s right into 2000. As a skeptical investor I always like to peel back a few layers and ...

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We get calls from journalists from time to time. Here are links to a few of our thoughts, as reported by online news sources: FoxBusiness had Rick as a guest again, talking about investing in 2012. "Invest cautiously in 2012. Preserve capital." The Chicago Sun-Times interviewed Rick about higher-yielding investments. September 2011. "In his view, the stock market is priced for 'a continued and unbroken economic recovery.”'But the bond market 'is priced for a ...

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The debt crisis that reared its head in 2007 is far from over. Yes, the crisis in the financial markets that peaked in late 2008 has passed, mainly due to hundreds of billions of public dollars being used to bail out the horrible mismanagement of major banks and brokerages. Regarding the billions in bonuses paid out of that bailout money: As the old bumper sticker says, if you're not mad ...

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As I write this, the yield on the 10-year Treasury Bond is 2.04%. Assuming you want a little income left over after taxes and inflation -- say, 1% or so -- then this bond price assumes that inflation over the next decade will average around 0.30%. An inflation rate of 0.30% in a modern developed country is akin to a flat-line economy, with declining standards of living. Looking at this interest ...

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Debt Reduction the Post-War Way In the 35 years following the end of WWII, the rate of inflation exceeded the interest rate on our government's debt about a quarter of the time. The so-called "real rate" of interest was negative, and materially so. In the estimation of Carmen Reinhart and Belen Sbrancia, in a paper published in March of this year, a negative real rate of interest resulted in America's goverment ...

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Our hearts and hopes are with Japan. The earthquake, tsunami and nuclear crisis are inflicting untold suffering on the people of a proud and noble nation. We wish them a quick and safe return to some semblance of normalcy. While our hearts think only of the human toll, with our heads we think about our clients' portfolios. We spent time over the weekend and these past few work days considering what, ...

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Nov
03

The monetary printing presses, that is. As expected, the Federal Reserve Board of Governors announced today the resumption of its "Quantitative Easing" program. That's a nice academic euphemism for "printing money." The Fed will be reaching out into the capital markets and buying six hundred billion dollars of Treasury bonds. For reference, that's about half of current annual federal borrowing. The objective of the policy is to pull down longer-term ...

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Gentle Ben Bernanke and his friends at the Fed once again reminded us the other day that they will do whatever it takes to rekindle inflation and, one hopes, rekindle hiring. One in 6 adults that want a full time job don't have one right now, and that's gotta stop. The bond market promptly rallied and the stock market is going nuts (and up). Since I spend too much time watching ...

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Rick appeared on CNBC to talk about Bernanke, Fed policy and the bond market on August 30.

Gentle Ben Bernanke gave a big speech yesterday at Jackson Hole. There were two main themes in the talk. The first was an overview of where the economy has come since the Panic of 2008. In paragraph after paragraph, he gives the little bit of good news, followed by an immediate, "however..." It's the "howevers" that have concerned us and continue to. His rhetorical pattern reminds of dealing with teenagers. "Hey, ...

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