Category Archives: Financial Crisis

Over the weekend, the Greek Prime Minister broke off further talks with the European Union group over restructuring its debts. The European Central Bank froze funding to Greek banks, forcing them to shut their doors for a week to prevent a widespread bank collapse in Greece. This morning, stocks in all global markets are down, albeit not much more than we sometimes experience from time to time. US interest rates ...

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The Federal Reserve Board of Governors today released minutes from its January meeting, at which it apparently discussed the fact that it might not be able to continue its current pace of bond market manipulation. In case you've forgotten...the Fed is buying up hundreds of billions of dollars of public and private bonds in order to artificially hold interest rates low. It pays for this by flooding bank vaults with ...

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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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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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We are value investors. That means we tactically look for the chance to buy investments when we think they are cheaper than their true inherent value. It also means that we need to ready to act because whole asset classes can move from expensive to cheap and back again in a matter of weeks.Our outlook over the next 5-7 years is for lower than average GDP growth and a slow ...

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