tag:blogger.com,1999:blog-306116252012-01-28T13:53:35.294-05:00Keep up to date with our observations of the latest news and trends affecting the financial markets at our blog.Boomernoreply@blogger.comBlogger7161100tag:blogger.com,1999:blog-30611625.post-28608589440489835692009-01-01T15:57:00.001-05:002009-02-19T12:01:24.081-05:00

We have moved the Alhambra Investments blog to our own domain:Contrarian MusingsPlease come check out the blog and our new website:Alhambra Investments

Boomernoreply@blogger.com39tag:blogger.com,1999:blog-30611625.post-10097293654960077582008-08-27T00:51:00.002-04:002008-08-27T00:54:43.073-04:00

There are plenty of people who will tell you that we are in a recession and several more who will tell you we are headed for some kind of new depression. They may ultimately be proven correct, but so far the economic statistics haven’t cooperated. Most of these people will also tell you that the housing market is the key to stablizing the economy. If real estate stabilizes, the mortgages on the

Boomernoreply@blogger.com5tag:blogger.com,1999:blog-30611625.post-78434839192566957962008-08-25T13:36:00.002-04:002008-08-25T13:41:08.935-04:00

Richard Rahn has an article posted at the Cato Institute about the corporate income tax:Rank the following taxes from best to worst: individual income taxes; payroll taxes, corporate income taxes, sales or consumption taxes, and residential property taxes. The vast majority of economists would rank the corporate income tax as being worst and the sales tax and residential property tax as the

Boomernoreply@blogger.com1tag:blogger.com,1999:blog-30611625.post-19947555368726861612008-08-25T10:43:00.002-04:002008-08-25T10:48:18.670-04:00

Amity Shlaes has an article at Bloomberg that takes a different view of the housing problem:Aug. 20 (Bloomberg) -- Everything will be all right if we just fix the housing problem. That was the hope investors clung to as they watched Fannie Mae and Freddie Mac crumble this week. The presidential campaigns reflect a similar faith in housing's curative power. Senator John McCain recently suggested

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-70997390001907919012008-08-20T12:04:00.003-04:002008-08-20T14:16:48.491-04:00

I haven't done an update on the auction rate security mess for quite a while, but now that some firms are starting to settle with their clients, it seems a good time to review.The large brokers of auction rate securities, who were also the underwriters, have all mostly agreed to buy back auction rate securities from their clients. This was forced by Andrew Cuomo, the AG of the state of NY. Other

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-89402134402408184632008-08-20T10:13:00.002-04:002008-08-20T11:34:58.519-04:00

The Fannie Mae and Freddie Mac deathwatch continues today with the stocks both making new lows. It seems inevitable at this point that Hank Paulson will have to whip out the government check book and take these things over. The question seems more a matter of structure at this point.This week's selloff was spurred by an article in Barron's over the weekend:IT MAY BE CURTAINS SOON FOR THE

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-25042842376090486362008-08-19T10:41:00.002-04:002008-08-19T10:53:10.980-04:00

Amity Shlaes, author of The Forgotten Man: A New History of the Great Depression, lays out the non monetary mistakes made that turned the Crash of '29 into the Great Depression. They sound a lot like Obama's economic platform:Giving in to protectionism - In Herbert Hoover's time, Sen. Reed Smoot and Rep. W.C. Hawley proposed a tariff that was to raise effective duties by as much as half. More

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-58195660033313370822008-08-19T00:46:00.002-04:002008-08-19T00:53:40.864-04:00

Brian Wesbury's Op-ed in today's WSJ sounds familiar:The Fed's "dual mandate" -- to keep the economy strong and prices stable -- serves to support this mistake. In contrast, the European Central Bank has a single mandate: price stability. No wonder the dollar has been so weak relative to the euro. Imagine two football teams. One with a single mandate: win. The other with a dual mandate: win and

Boomernoreply@blogger.com5tag:blogger.com,1999:blog-30611625.post-51701851142071496482008-08-18T16:11:00.002-04:002008-08-18T16:14:42.492-04:00

Greg Mankiw quoting from a WSJ article cites a proposal by Alan Greenspan to aid in the recovery of the housing market:He did offer one suggestion: "The most effective initiative, though politically difficult, would be a major expansion in quotas for skilled immigrants," he said. The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting

Boomernoreply@blogger.com1tag:blogger.com,1999:blog-30611625.post-83482945926601292972008-08-15T18:08:00.001-04:002008-08-15T18:10:43.107-04:00

I have a new article up at RealClearMarkets.com:In less than one month, oil prices have fallen nearly 22%. That drop happened during a period when our leaders in Washington accomplished exactly nothing of importance that could account for the fall. Sure, President Bush lifted the moratorium on offshore drilling, but that action will have no effect unless Congress follows suit. Most likely the

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-63587665114717476792008-08-15T17:51:00.003-04:002008-08-15T18:08:02.938-04:00

The WSJ has an editorial today entitled, "American the Uncompetitive", which details the excessiveness of our corporate income tax:The new international tax rankings are out for 2008, and congratulations to Washington, D.C., are again in order. Our political class has managed to maintain America's rank with the second highest corporate tax rate in the world at 39.3% (average combined federal and

Boomernoreply@blogger.com7tag:blogger.com,1999:blog-30611625.post-86342540604157554982008-08-13T14:37:00.002-04:002008-08-13T14:47:05.640-04:00

Robert Reich has a post today lamenting the power of the Fed. Of course, he dislikes the power of the Fed for different reasons than I but at least he finally understands that they are the problem:Chinese authoritarian capitalism, on display this week in Beijing, has me thinking about America’s democratic capitalism and how we practice it.Start with the U.S. economy’s most powerful government

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-8887560851784876122008-08-13T11:05:00.002-04:002008-08-13T11:39:41.313-04:00

Retail sales, which account for about one-third of gross domestic product, have weakened further in July, as most of the tax rebate checks have been distributed and used. Retail sales dropped 0.1% in July, slightly ahead of expectations. Excluding a 2.4% decline in automobile purchases, sales were up 0.4%, the slowest since February. Excluding gas purchases, and that number falls to -0.2%.

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-4688114240496573022008-08-12T12:07:00.006-04:002008-08-13T14:50:49.550-04:00

Last week, Wall Street lost it's most erudite spokesman when Michael Metz, the longtime market strategist at Oppenheimer & Co., passed away. Mr. Metz was best known as a bear on Wall Street, especially during the internet bubble, but for those of us who had the privilege of Mike's counsel as Oppenheimer employees, he was much more than a perma bear. I spent 10 years at Oppenheimer & Co. and while

Boomernoreply@blogger.com1tag:blogger.com,1999:blog-30611625.post-33241781478917228822008-08-07T10:42:00.002-04:002008-08-07T10:51:46.387-04:00

The number of people filing for first time unemployment benefits held steady at recession levels in the week ending August 2nd, according to the US Department of Labor. Claims jumped 7,000, to 455,000, after an upwardly-revised gain of 45,000 last week. Economists were expecting 430,000 new claims for the week. Today's reading is the highest reading in six years.A large portion of [the recent

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-10846537091813601622008-08-05T14:28:00.002-04:002008-08-05T14:34:04.989-04:00

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent. Economic activity expanded in the second quarter, partly reflecting growth in consumer spending and exports. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing contraction, and elevated energy

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-73262984109060496992008-08-04T13:17:00.002-04:002008-08-04T14:56:18.221-04:00

Susan Ariel Aaronson, an Associate Research Professor of International Affairs at George Washington University, tries to defend Barack Obama on trade with an article at Voxeu.org:Around the world, the press has portrayed the 2008 US presidential election as a choice between freer trader John McCain and “protectionist” Barack Obama. That traditional paradigm has helped the media simplify the

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-25648996152590823702008-08-04T09:45:00.003-04:002008-08-04T10:21:33.959-04:00

Despite a better-than-expected gain in nominal spending, real personal spending decreased 0.2% for the month of June. Nominal spending increased by 0.6%, above the 0.5% expected by economists. But the increase was mainly due to a sudden spike in prices, as inflation increased 0.8% for the month. Adjusted for inflation, real consumer spending was down, by 0.2 percentage points. The spike in

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-89103369331599727652008-08-01T19:00:00.002-04:002008-08-01T19:07:26.716-04:00

The employment report today showed that the biggest jump in unemployment was in the 16-24 age group, up 0.8%. This group has lost 550,000 jobs in the last three months and the unemployment rate is up 2.4% during that time. The unemployment rate for those over age 25 is up by 0.5% during the same time. Is it possible that raising the minimum wage had something to do with the rise in youth

Boomernoreply@blogger.com1tag:blogger.com,1999:blog-30611625.post-44073604857753880092008-08-01T18:45:00.002-04:002008-08-01T18:59:32.664-04:00

Forcing big oil companies to take a reasonable share of their record breaking windfall profits and use it to help struggling families with direct relief worth $500 for an individual and $1,000 for a married couple. The relief would be delivered as quickly as possible to help families cope with the rising price of gasoline, food and other necessities.The rebates would be fully paid for with five

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-15016709598646729572008-08-01T18:33:00.002-04:002008-08-01T18:38:59.759-04:00

Larry Lindsay makes a fine point in his editorial today in the WSJ, Hank Paulson's Fannie Gamble, that I hadn't thought of:First, Congress rejected a proposal that Fannie and Freddie be barred from paying dividends if they are receiving injections of capital from the federal government. This idea would seem to be the first lesson in a course on Government Bailout 101. The government shouldn't be

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-79805602225106780082008-08-01T17:55:00.002-04:002008-08-01T17:59:35.305-04:00

Nancy Peolosi recently said that she didn't want to drill for more oil in the US because she was "trying to save the planet". Charles Krauthammer points out that not drilling here is only good for the parts of the environment that Pelosi can see:Does Pelosi imagine that with so much of America declared off-limits, the planet is less injured as drilling shifts to Kazakhstan and Venezuela and

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-18005065553820565832008-08-01T12:10:00.002-04:002008-08-01T12:21:01.246-04:00

Nonfarm payrolls in the US fell for the 7th straight month, as 51,000 more jobs were lost in July. Although negative, the consensus tabbed July for 70,000 job losses, so the report is somewhat bullish. The unemployment rate, in contrast, surged ahead of expectations,to a 5.7% annual rate. Economists were anticipating a number between 5.5 and 5.6%. The unemployment rate is at a 4-year high, and

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-48174195894867628712008-07-31T11:39:00.003-04:002008-07-31T11:53:51.974-04:00

According to the Bureau of Economic Analysis, US gross domestic product - the output of goods and services produced by labor and property located in the United States - accelerated in the latest quarter, to a 1.9% annualized pace. The number, reported by the Commerce Department, was slightly below expectations, as economists had expected a number closer to 2.3%. The increase in real GDP in the

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-27407516252843974642008-07-31T11:20:00.003-04:002008-07-31T11:38:50.407-04:00

The number of people filing for first time unemployment benefits rose sharply in the week ending July 26th, according to the US Department of Labor. Claims jumped 44,000, to 448,000, way above expectations. Economists were expecting 398,000 new claims for the week. Today's reading is the highest reading since April 2003.Having witnessed extremely volatile measurements in the past few weeks, it is

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-7788187263425757612008-07-29T13:49:00.001-04:002008-07-29T13:57:42.666-04:00

In 1976, Howard Beale, a character in the movie Network, urged Americans to get up, go to their windows, open them and yell out, “I’m mad as hell and I’m not going to take this anymore!” The preamble to Beale’s speech chronicles the problems of the 1970s: inflation, a falling dollar, unemployment, environmental degradation and crime. Here we are over 30 years later and we’re living another Howard

Boomernoreply@blogger.com1tag:blogger.com,1999:blog-30611625.post-21641938460719472302008-07-29T11:36:00.002-04:002008-07-29T11:43:44.745-04:00

The argument those opposed to opening ANWR and other areas to oil exploration use is that it won't have an impact on today's prices because the oil won't come to market for years. Of course, that argument seems silly since any plan they offer for alternatives also will require years to produce results, but even absent that argument, it is highly likely that opening these lands to drilling in the

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-58287789519027413342008-07-29T11:21:00.003-04:002008-07-29T11:29:36.937-04:00

A lot of economically illiterate people have blamed speculators for driving up oil prices. Will they now thank speculators for driving prices down?Crude Oil Long Change Short Change Large Speculator 198,019 -11,994 201,659 14,028 Commercial Hedger 641,265 -28,870 626,528 -60,219 Small Trader 55,452 -39,045 66,549 -33,718Speculators can go short as well

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-15483068669089053882008-07-25T13:40:00.002-04:002008-07-25T13:51:38.147-04:00

The number of scientist questioning the thesis that CO2 is the cause of global warming continues to grow. Considering the economic consequences of the plans for reducing CO2 emissions, it is time we had a serious debate about this. Up until now, the debate has been one sided and anyone who dared to question the Al Gore led consensus was ridiculed or worse. Now the consensus is starting to crack

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-9954209406425771362008-07-24T21:59:00.002-04:002008-07-24T22:06:36.216-04:00

As I pointed out in my last market update, despite all the bad news out there, the economy is not in recession and the 2nd quarter was likely much better than expected. We'll find out next week, but in the meantime, here's what Brian Wesbury has to say:Late next week the government will release initial estimates of real economic activity in the second quarter. Not long ago, in early April, when

Boomernoreply@blogger.com1tag:blogger.com,1999:blog-30611625.post-82229205178334382162008-07-24T21:53:00.003-04:002008-07-24T21:58:39.136-04:00

Futures markets are not infallible, but they are remarkably accurate at predicting future events. Prediction markets are now available from a variety of sources, including InTrade. Here's the current contract on the likelihood of a recession in 2008:Stock market investors may be worried about the economy but apparently no one is betting directly on that outcome. If you're convinced of the doom

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-36599460583440791552008-07-24T14:56:00.002-04:002008-07-24T15:07:42.425-04:00

The US housing market continued its downward slide into June, as resales of homes and condos fell 2.6% for the month. Sales fell from a seasonally adjusted annualized rate of 4.98 million in May to 4.86 million in June. It is at its lowest level in 10 years. The number was well below expectations, as economists estimated sales at a rate of 4.95 million. Resales of US homes have fallen 15.5% in

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-67651177839743350092008-07-24T14:46:00.002-04:002008-07-24T14:53:40.167-04:00

The number of people filing for first time unemployment benefits rose sharply in the week ending July 19th, according to the US Department of Labor. Claims jumped 34,000, to 406,000, way above expectations. Economists were expecting 380,000 new claims for the week. Today's reading is the highest reading since late March.Having witnessed extremely volatile measurements in the past few weeks, it is

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-5047637393928414462008-07-24T13:36:00.002-04:002008-07-24T14:36:26.000-04:00

The House of Representatives passed the The American Housing and Foreclosure Prevention Act and President Bush will apparently sign it into law. Congratulations, taxpayer! You've just been stuck with the bill for bailing out not only "homeowners" who bought something they couldn't afford, but also the institutions that loaned them the money to make the purchase.This bill will allow some

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-20109693491357918692008-07-23T14:25:00.002-04:002008-07-23T14:36:33.285-04:00

At an allegedly private fundraiser, President Bush had this to say about the cause of the current economic problems:"Wall Street got drunk -- that's one of the reasons I asked you to turn off the TV cameras -- it got drunk and now it's got a hangover," Bush said Friday, according to a video obtained by Houston's ABC affiliate KTRK. "The question is how long will it sober up and not try to do all

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-47585090086024432182008-07-23T14:02:00.000-04:002008-07-23T14:03:44.752-04:00

Reports from the twelve Federal Reserve Districts suggest that the pace of economic activity slowed somewhat since the last report. Five eastern Districts noted a weakening or softening in their overall economies, while Chicago characterized its economy as sluggish and Kansas City noted a moderation in growth. St. Louis said activity was stable and San Francisco reported little or no growth.

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com2tag:blogger.com,1999:blog-30611625.post-51367691056155464422008-07-22T23:23:00.002-04:002008-07-22T23:30:34.394-04:00

This really doesn't require much commentary:The committee hosting the Democratic National Convention is using the city's gas pumps to fill up on fuel, avoiding state and federal highway taxes, officials said today."There's something there that just doesn't seem right to me because, in a sense, you're saying then that the officials who pass the laws are not willing to live by them, and that

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-79257415773496454112008-07-22T18:49:00.002-04:002008-07-22T19:29:40.248-04:00

I haven't said much about the search for a scapegoat on which to blame the rise in energy prices. Congress has held endless hearings and have alternately blamed oil companies and the undefined "speculators", but frankly I figured that the price would drop before our politicians did something stupid. That might not be a good bet in an election year. The Senate is considering a bill called the Stop

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-3069864895140540592008-07-21T14:13:00.003-04:002008-07-21T14:25:59.294-04:00

It is rare to find a financial writer who has the ability to see markets clearly and also write in a way that non financial types can understand. Jim Grant is one of the finest financial commentators alive today and his recent article in the WSJ linked above is one of his finest efforts:"Raise less corn and more hell," Mary Elizabeth Lease harangued Kansas farmers during America's Populist era,

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-7066772884984527762008-07-20T20:45:00.002-04:002008-07-20T20:52:20.868-04:00

Okay, so here's a question. Rank these countries according to total exports:Hong KongChinaJapanUKGermanyFranceUSClick here to find the answer.Exports are not magical; economic growth depends on many factors of which exports are just one.

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-79188415994141907432008-07-20T20:40:00.002-04:002008-07-20T20:44:50.321-04:00

It is not capitalism that causes all the turbulence that we see in financial markets. It is government intervention to prevent the proper functioning of markets that causes most of the problems. Foremost among these interventions is the setting of monetary policy by the Federal Reserve. The Fed causes the credit expansions which lead ineveitably to the corrections. Now comes some scientific proof

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-64307445611104825002008-07-15T16:40:00.001-04:002008-07-15T16:41:32.886-04:00

Considering the crap coming out of Hollywood, I'll put this in the Good News category:The credit crunch has hit home in Hollywood after Paramount Pictures, which has released a string of hit movies this year, was forced to suspend plans for a $450m film financing.The studio has been working with Deutsche Bank on financing that would have provided funds for up to 30 films, including possible

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-86253935605229654802008-07-15T16:25:00.001-04:002008-07-15T16:35:22.193-04:00

Here's the entire statement from Jim Bunning today:Thank you, Mr. Chairman. I know we have a lot of ground to cover today, but I want to say a few things on the topic of this hearing and of the next. First, on monetary policy, I am deeply concerned about what the Fed has done in the last year and in the last decade. Chairman Greenspan’s easy money the late nineties and then following the tech

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-27823825648990699842008-07-15T14:44:00.003-04:002008-07-15T14:46:41.628-04:00

My wife pointed out the resemblance of Bernanke to a gnome. Put a pointy hat on him....

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-19314005401589731952008-07-15T13:26:00.002-04:002008-07-15T13:29:00.510-04:00

For those of you who don't want to watch the entire video of Jim Bunning below, here are some excerpts (via TMTGM):I'm deeply concerned about what the Fed has done in the last year and in the last decade. Chairman Greenspan's easy money in the late 90s and then following the tech bust inflated the housing bubble and created the mess we are in today. Chairman Bernanke's easy money in the last year

Boomernoreply@blogger.com6tag:blogger.com,1999:blog-30611625.post-44701771782248439512008-07-15T13:05:00.002-04:002008-07-15T13:09:24.437-04:00

WASHINGTON (Reuters) - The Federal Deposit Insurance Corp has temporarily halted any foreclosures on the $15 billion of bank-owned mortgage loans found in IndyMac's portfolio, FDIC Chairman Sheila Bair said on Monday.Bair has scolded mortgage lenders for being too slow to help distressed borrowers restructure their home loans.If Ms. Bair thinks this is how banks should be run, might I suggest she

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-13077238852701203672008-07-15T12:52:00.002-04:002008-07-15T13:00:34.590-04:00

Ludwig Von Mises published Human Action in 1949, but this sounds quite relevant today:The boom produces impoverishment. But still more disastrous are its moral ravages. It makes people despondent and dispirited. The more optimistic they were under the illusory prosperity of the boom, the greater is their despair and their feeling of frustration. The individual is always ready to ascribe his good

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-55195471911135897362008-07-15T12:41:00.003-04:002008-07-15T12:47:09.064-04:00

As the only Senator to vote against the nomination of Ben Bernanke as Fed Chairman, Jim Bunning is the only Senator who can honestly say he saw this mess coming. He spent years criticizing Greenspan, so he's not new at this. Today, he threw nothing but strikes (Bunning spent 17 years as a major league pitcher) in his questioning of Bernanke. Watch the video.

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-40037559698669368792008-07-15T12:32:00.003-04:002008-07-15T12:44:58.638-04:00

Despite the help of Uncle Sam and his $50 billion in rebate checks thus far, retail sales managed only a 0.1% gain for the month of June, well below expectations. Excluding automobile purchases, sales were up 0.8%, the slowest in three months. Excluding autos and gas purchases, and that number falls to 0.2%. Economists were expecting a 0.3% gain in total sales and a 1.1% gain ex-auto.In the past

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-41653149588233268702008-07-15T11:17:00.001-04:002008-07-15T11:19:06.556-04:00

The Onion has a classic satire about the economic situation:WASHINGTON—A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest."What America needs right now is not more talk and long-term strategy, but a concrete way to create more

Boomernoreply@blogger.com1tag:blogger.com,1999:blog-30611625.post-43073394827489884972008-07-12T14:59:00.004-04:002008-07-22T17:02:40.559-04:00

E.J. Dionne says that capitalism is ailing:WASHINGTON -- The biggest political story of 2008 is getting little coverage. It involves the collapse of assumptions that have dominated our economic debate for three decades.Since the Reagan years, free market cliches have passed for sophisticated economic analysis. But in the current crisis, these ideas are falling, one by one, as even conservatives

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-9936323898427240652008-07-10T11:28:00.002-04:002008-07-10T11:35:56.463-04:00

The number of people filing for first time unemployment benefits fell sharply in the week ending July 5th, according to the US Department of Labor. Claims fell by 58,000, to 346,000. Economists were expecting 399,000 new claims for the week. It is the lowest reading since April and the largest one-week decline in more than 2 years.Having witnessed extremely volatile measurements in the past few

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-17091917360939324722008-07-04T12:11:00.002-04:002008-07-04T12:28:09.544-04:00

Via MisesThe former St Louis Fed president, William Poole, now consultant for California-based Merk Investments, made an interesting statement on the Fed policy tradition. In an interview with Germany's n° 1 daily, the Frankfurter Allgemeine Zeitung, Poole stated:"In historical perspective inflation is a means to diminish the stress felt by debtors. The policy of the US central bank is construed

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-53964870808659323862008-07-03T00:50:00.002-04:002008-07-03T00:55:46.848-04:00

Alan Greenspan inflated a real estate bubble to ward off the effects of the popping of the stock bubble. Now Bernanke has inflated a commodity bubble. Don't think so? Read this:Trevor Walczak is concerned about the environmental impact of natural-gas companies drilling on his land in eastern Pennsylvania, but $342,000 in this economy was too good to pass up."This type of windfall gives everybody

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-4180713642358396392008-07-02T21:01:00.002-04:002008-07-02T22:31:30.883-04:00

Robert Reich has an entry at his blog about the regressive nature of rises in the price of gas:In a society like ours is now -- in which most of the gains from growth are going to the top earners, and the very top 1 percent has about 20 percent of all income (and a far greater share of all wealth) -- almost every major issue has a large distributive consequence. But because economists and policy

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-18378513388859781552008-07-02T11:33:00.002-04:002008-07-02T11:48:33.050-04:00

US employment in the private sector fell by 79,000 in June after a downwardly revised May, according to the ADP employment report released Wednesday. The number was way below estimations, as analysts were expecting a 40,000 decline in both private and public sector payrolls. The loss was the biggest since November 2002.Employment in the services sector fell by 3,000, the first decline in six

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-17612187607762269272008-07-02T00:06:00.002-04:002008-07-02T00:14:56.550-04:00

It's an election year, big parts of the Midwest has flooded and farmers are trying to decide whether to replant or not. With prices high, some will:OAKVILLE, Iowa -- Farmer Keith Ball is taking a gamble.Mr. Ball, 53 years old, said he will try to replant 80 acres that were flooded in mid-June when the Iowa River breached a levee.So much of the growing season has passed that any soybean seed he

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-36892437245714608512008-07-01T18:51:00.004-04:002008-07-01T19:30:08.711-04:00

Frank Shostak gives the Austrian view of inflation in this article. Inflation is not the rise in the CPI. The rise in the CPI is a symptom of inflation in the Austrian view of things. Very simply, an increase in the supply of money is inflation. As Mr. Shostak puts it:In the modern world, money proper is no longer gold but rather paper money; hence inflation in this case is an increase in the

Boomernoreply@blogger.com1tag:blogger.com,1999:blog-30611625.post-65056411782390725822008-07-01T00:50:00.002-04:002008-07-01T01:04:49.286-04:00

Prince Charles, in a stunning display of sacrifice for the environment, has converted his Aston Martin to run on biofuel. The car only gets 10 miles to the gallon but he only drives it about 300 miles per year. Of course, the rest of the time he's producing tons of CO2 by running off at the mouth and doing whatever useless things an old Prince with no chance of ever becoming King does, but I

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-76743817544684519562008-06-27T15:10:00.002-04:002008-06-27T15:28:56.010-04:00

I've seen some commentary recently about how bad the market is, comparing it to the previous worst start to a year, 1933. That sounds ominous since everyone knows that 1933 was in the middle of the Great Depression. Unfortunately for the gloom and doom crowd, 1933 also proved to be the bottom of a bear market and stocks subsequently returned 195% over the next 3 years. History never repeats

Boomernoreply@blogger.com2tag:blogger.com,1999:blog-30611625.post-54770662117250809152008-06-27T14:38:00.003-04:002008-06-27T14:54:54.577-04:00

Marc Faber has been right about a lot of things when it comes to investing. He was way ahead of the curve on the credit problems and called the commodity bull about the same time as Jim Rogers. In this interview on CNBC, he rips the Fed and recommends gold:The Fed has been "misleading" investors on wanting a strong dollar, Faber said, as it kept lowering the interest rates. "When it comes to

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-79751904833541054412008-06-27T14:25:00.002-04:002008-06-27T14:31:07.028-04:00

Paul Krugman's editorial on oil speculators is actually technically correct, but when he says that the price of oil is supported by fundamentals, well that is to me prima facie evidence of a bubble. Krugman's track record since he started writing for the NYT is terrible and betting against him would have been very profitable.He does have one good line though:Many economists scoffed: Mr. Masters

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-73880176767647440672008-06-27T14:16:00.002-04:002008-06-27T14:21:56.268-04:00

Steve Hanke explains how the oil market functions and why prices are high. He also provides a way for politicians to do something useful about high prices rather than just hold hearings. First, he explains the role of the dollar:For example, if the greenback had held its January 2001 value against the euro, oil would have traded at about $76 a barrel in May 2008. This is almost $50 below the

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-62492960415876706572008-06-27T13:37:00.002-04:002008-06-27T13:53:33.629-04:00

Money magazine is the Time or Newsweek of the investment world. By the time an investment fad makes it to Money, it is probably nearing a top. A recent example would be their stories about real estate in June of 2005. Now, Money has a story on inflation and how to protect your assets, including an allocation to commodities (HT: Tim Iacono at TMTGM):One way to beat inflation is to own the stuff

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-87363048075734715692008-06-26T23:03:00.003-04:002008-06-27T01:07:43.951-04:00

I wonder if Ben Bernanke will ask for do overs on the FOMC meeting yesterday. Whatever reaction he expected from the inaction and statement of continuing belief in the future moderation of inflation (a belief that at this point is akin to the belief in unicorns) I'm guessing it wasn't a near 400 point sell off in the stock market, a dollar mugging, a $30+ spike in gold and a record close in the

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-67955329536367769362008-06-25T14:36:00.002-04:002008-06-25T14:38:58.054-04:00

The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.Recent information indicates that overall economic activity continues to expand, partly reflecting some firming in household spending. However, labor markets have softened further and financial markets remain under considerable stress. Tight credit conditions, the ongoing housing

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-66177288423629682612008-06-25T09:24:00.004-04:002008-06-25T09:43:31.787-04:00

Orders for durable goods were unchanged in May, as orders for airplanes and defense goods offset weaker demand for machinery and metals. Economists were expecting a decline of 1.0% for the month. It is the second straight monthly decline, but, considering orders remain unchanged since January, some economists were quickly questioning if the U.S. economy would experience a recession.Orders for

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-953391789970180122008-06-23T21:21:00.000-04:002008-06-23T21:22:08.238-04:00

"Well, housing prices are falling and many banks have bad loans and if prices fall much further the borrowers won't have the money to pay the loans back." Click on the title of the post to find the answer.

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-24751232516145597612008-06-19T10:19:00.002-04:002008-06-19T10:27:10.234-04:00

The cure for high oil prices is......high oil prices. This story from the IHT is about the boom in buidling offshore drilling rigs. Day rates have risen dramatically due to current shortages so ship builders are scrambling to build new drilling ships:As President George W. Bush considers repealing a ban on drilling off most of the coast of the United States, a shortage of ships used for such

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-38997695237569189222008-06-18T22:20:00.001-04:002008-06-18T22:27:04.235-04:00

Senator Chris Dodd is the chairman of the Senate Banking Committee. He's also a "friend of Mozilo" who got a special rate on his home loan. I can't figure out for the life of me why the CEO of a mortgage company would want to provide a cut rate mortgage to the chairman of the Senate Banking Committee and apparently neither can Dodd:And apparently the chairman of the Senate Banking Committee has

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-67237077336994626132008-06-18T21:53:00.002-04:002008-06-18T22:12:00.076-04:00

Victor Davis Hanson at the Corner:There is something pathetic about Americans begging the House of Saud to produce another 300,000-500,000 barrels of oil per day, while in mindless fashion repeating the mantra, “We can’t drill our way out of this problem” — as if anyone suggested absolute oil independence was the goal rather than more supply to deflate tight conditions that encourage speculation.

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-70687432690448969952008-06-18T00:54:00.002-04:002008-06-18T01:15:16.015-04:00

That's the title of a post at Cafe Hayek. Don Boudreaux:According to today's Wall Street Journal, Barack Obama alleges that "Globalization and technology and automation all weaken the position of workers." If this presidential wannabe is correct, then some of the world's most prosperous workers must be the people in that newly discovered tribe in Brazil -- persons with absolutely no contact with

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-38139921197808019532008-06-17T09:14:00.002-04:002008-06-17T09:18:51.636-04:00

The bad consequences of a weak dollar are well known. But there are good consequences as well. The US needs to attract foreign investment and a weak dollar makes US investments look attractive to foreigners. Many bemoan this fact thinking that it matters if it is foreigners rather than Americans doing the investing. I don't worry about that much; the source of the investment is less important

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-9557780658287288402008-06-17T00:41:00.005-04:002008-06-17T01:12:30.967-04:00

Senator Obama gave an interview today to the WSJ about his economic plans. I'll post something later about the whole plan, such as it is, but this part caught my eye:Sen. Obama has proposed a variety of measures that would raise taxes on individuals at the top end and provide tax relief to middle- and lower-income households. Under his plans, those in the middle would see their after-tax income

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-48797810274558280592008-06-16T22:54:00.002-04:002008-06-16T22:57:08.940-04:00

Petrobras is able to drill off the Florida coast, why can't US companies?HAVANA, Cuba (Reuters): Brazilian state oil company Petrobras is studying a block in deep Cuban waters for possible exploration as part of broader cooperation with the Caribbean island, a top advisor to the company said on Friday. "We are planning to cooperate not only in exploration and production, but lubricants, refining

Boomernoreply@blogger.com1tag:blogger.com,1999:blog-30611625.post-38867592259533566162008-06-16T13:18:00.001-04:002008-06-16T14:25:50.965-04:00

It has recently been revealed that Countrywide Mortgage had a special loan program for the so called "Friends of Angelo". Angelo Mozilo was the CEO of countrywide and his group of friends included several politicians, two CEOs of Fannie Mae and a plethora of well connected individuals. Mozilo waived points and reduced the rates on mortgages for his group of "friends". This is raising ethical

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-18519623978577452962008-06-16T12:45:00.002-04:002008-06-16T13:13:34.120-04:00

A few weeks ago, I noticed an article (I think it was in the WSJ, but I can't remember now) about a Chinese company that was expanding - in South Carolina. The costs associated with the expansion were comparable even with higher labor costs. Land and transportation costs were cheaper in S.C. than China. That is a major shift that I don't think most people recognize. Now, here's another article

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-77274395763925121782008-06-16T11:17:00.002-04:002008-06-16T11:25:13.044-04:00

Bill Fleckenstein is bearish about the market and the economy. That is not exactly news since Fleckenstein has been bearish since I started in the business and he makes his living as a short seller. Fleckenstein always makes some good points in his commentaries and his view of the Fed is not that different than mine, but his permanent bearishness is getting old. Here's an excerpt from his latest

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-48155421881529121102008-06-14T16:27:00.003-04:002008-06-14T16:30:31.887-04:00

I don't want to minimize the effects of the housing crisis - I feel your pain - but this does get to the heart of the matter (HT Adam Smith):(2008-06-13) — The U.S. housing crisis reached fever pitch this month, with potential foreclosures up 48 percent compared with May 2007. The devastation of receiving foreclosure notices has now swept through a full 2/10ths of one percent of American homes.

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-44883952138911033532008-06-14T11:41:00.002-04:002008-06-14T11:42:10.167-04:00

I dont' believe oil prices are high because of a lack of supply but this may spook some of the speculators:Saudi Arabia, the world’s biggest oil exporter, is planning to increase its output next month by about a half-million barrels a day, according to analysts and oil traders who have been briefed by Saudi officials.

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-78453956453233294492008-06-13T10:38:00.002-04:002008-06-13T11:53:14.738-04:00

The US consumer price index gained significantly in May, as today's monthly report showcased a worrisome 0.6% increase. The report was above the 0.5% expected by economists. Core CPI, which excludes energy and food prices because of their volatile nature, increased 0.2%. That was inline with expectations. Year-over-year, consumer prices have increased 4.2%. Core CPI gained 2.3% in the same

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-70068333609117881842008-06-13T00:08:00.003-04:002008-06-13T01:06:22.271-04:00

Thomas Kostigen writes a column for Marketwatch called Thomas Kostigen's Ethics Monitor. I've never seen the column before, but I ran across his latest article called Moore or Less. In the article, Kostigen attempts to make the case that the US auto industry is unethical. Or at least I think that is what he's trying to do. His logic (or rather the lack of logic) in the article makes it difficult

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-25403640902820451142008-06-12T18:50:00.002-04:002008-06-12T19:05:47.022-04:00

Excerpts from the Milken Global Conference economic roundtable:Ed Phelps: Our friends in the financial sector have given capitalism a black eye. Suddenly capitalism is held in less awe around the world. That is a very serious impact.Phelps is right that capitalism has a black eye right now, but I disagree with who delivered the blow. It should be central banking that gets the black eye not

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-66846969183007719402008-06-12T13:29:00.002-04:002008-06-12T13:41:28.248-04:00

There are a limited number of H1-B visas available to foreign workers each year. Here's the Wikipedia entry about H1-B visas:The H-1B is a non-immigrant visa in the United States under the Immigration & Nationality Act, section 101(a)(15)(H). It allows U.S. employers to employ foreign guest workers skilled in specialty occupations if a U.S. citizen or resident is not available. [1]The regulations

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-66252655333707156972008-06-12T13:20:00.002-04:002008-06-12T13:26:53.492-04:00

Megan McArdle has a followup post on financial regulation (here's the original post). As usual she makes some good points:But assuming arguendo that the regulators are every bit as smart and well-trained as the analysts they regulate. This is adequate only for certain kinds of regulation: the kind where the goals of the regulators are fundamentally different from those of the regulated.If they

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-34564147541641567212008-06-12T13:05:00.003-04:002008-06-12T13:10:35.266-04:00

Far from being an environmental panacea, ethanol is turning out to be an ecological disaster. There is no free lunch and ethanol is just one more example of the unintended consequences of interfering with the market:From his Cessna a mile above the southern Amazon, John Carter looks down on the destruction of the world's greatest ecological jewel. He watches men converting rain forest into cattle

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-49160235366689321162008-06-12T12:20:00.002-04:002008-06-12T12:35:58.764-04:00

Many people are comparing the current economic environment to that of the stagflationary 70s. As I have pointed out in my commentaries and blog posts, this comparison is overwrought at best. Steve Chapman at Reason agrees:Critics insist that the Fed has surrendered on inflation, pumping money out in a desperate attempt to prevent a full-fledged downturn. Exhibit A in the charge is the weakness of

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-1873180928946737322008-06-12T11:38:00.000-04:002008-06-12T12:25:40.150-04:00

The number of people filing for first time unemployment benefits rose sharply in the week ending June 7th, according to the Labor Department. Claims jumped by 25,000, to 384,000. Economists were expecting 365,000 new claims for the week. Having witnessed extremely volatile measurements in the past few weeks, it is wise to consider the four-week moving average of initial claims, which smooths out

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-10282938832481878122008-06-12T11:16:00.002-04:002008-06-12T12:02:12.540-04:00

With the help of Uncle Sam and his $50 billion in rebate checks thus far, retail sales managed to beat expectations for the month of May, gaining 1.0%, after an upwardly revised April. Excluding automobile purchases, sales were up 1.2%, the largest increase in six months. Economists were expecting a 0.6% gain in total sales and a 0.8% gain ex-auto.In the past year, retail sales are up 2.5%, while

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-90334580885607976052008-06-12T09:20:00.002-04:002008-06-12T09:27:41.855-04:00

Gold and oil tend to be highly correlated but recently the two commodities have diverged. This has happened before of course, but over time, the two commodities have a positive correlation. So, will oil fall or will gold rise? My guess is the former.

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-76255543505159172192008-06-11T14:35:00.002-04:002008-06-11T14:37:18.443-04:00

Reports from the Federal Reserve Districts suggest that economic activity remained generally weak in late April and May. Three Districts described economic activity as softer, weaker, or lower, with an additional four Districts reporting slower, sluggish, or modest economic growth. The remaining five Districts of Philadelphia, Cleveland, Atlanta, St. Louis, and San Francisco described activity

Marcelohttp://www.blogger.com/profile/10835573785471660961noreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-31242290070380040642008-06-10T16:57:00.002-04:002008-06-10T17:04:48.121-04:00

Now that investment banks are borrowing from the Fed via the TSLF, many are calling for increased regulation of these companies. Austan Goolsbee, an economic advisor to Barack Obama recently said:"If you can borrow money from the U.S. taxpayer at a moment of crisis, that is a very sacred insurance policy underwritten by the U.S. taxpayer," said Mr. Goolsbee in an interview last week with Dow

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-18778975154264004972008-06-10T15:20:00.002-04:002008-06-10T15:24:51.090-04:00

There's been a lot of press about the "wealth effect". Supposedly, if people feel wealthier, such as when house prices rise, they spend more. More recently, we've heard a lot about the inverse wealth effect. As people feel poorer, such as when house prices fall, they spend less. This is certainly true to some degree, but what is the real impact?Yet the idea of a wealth effect doesn't stand up to

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-46852646046497002952008-06-10T13:30:00.002-04:002008-06-10T13:32:24.668-04:00

John Bartelson, who smokes Marlboro Lights through fingers blackened with tractor grease, may look like an average wheat farmer. He isn't. He's one of North Dakota's new oil barons.Every month, he gets a check for tens of thousands of dollars from Houston company EOG Resources, which drilled two oil wells on his land last year. He says the day his first royalty check arrived was one to remember.

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-7145880314027230892008-06-10T12:02:00.002-04:002008-06-10T12:13:37.320-04:00

This is one of the most significant stories to come out of Washington in a long time:Year after year, decade upon decade, the U.S. Senate's network of restaurants has lost staggering amounts of money -- more than $18 million since 1993, according to one report, and an estimated $2 million this year alone, according to another. The financial condition of the world's most exclusive dining hall and

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-10872300669054236352008-06-10T11:34:00.002-04:002008-06-10T11:38:19.906-04:00

I sent the following letter to the editor of the NYT today in response to this Op-Ed by David Brooks:David Brooks, like many Americans, sees the explosion of debt over the last 30 years as a moral issue. This is apparently one instance where it is considered acceptable to blame the victim rather than the perpetrator. Public policy is the source of our debt addiction. The tax code explicitly

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-32429741197272063702008-06-10T00:08:00.003-04:002008-06-10T00:51:01.487-04:00

From my latest market update:It appears now as well that the mandarins of the Federal Reserve have finally discovered that a weak dollar may be complicating their policy making. Ben Bernanke delivered a speech recently where he acknowledged, finally, that the falling dollar was having an effect on inflation and pledged to make it part of their future deliberations. The dollar is part of the

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-72273800977853399232008-06-09T18:20:00.002-04:002008-06-09T18:52:24.630-04:00

Our firm is organized as a Registered Investment Advisor. We are not brokers and we don't sell investment products. We organized this way because we wanted to eliminate any conflicts of interest between our firm and our clients. As fee only investment advisors, we have to act in the best interests of our clients.Brokerage firms do not function this way. When you go to Merrill Lynch, Morgan

Boomernoreply@blogger.com1tag:blogger.com,1999:blog-30611625.post-51334063357799426982008-06-09T17:58:00.002-04:002008-06-09T18:06:39.085-04:00

The Swedish Central Bank today announced that they will no longer be using a measure of "core" inflation to set monetary policy. To my knowledge this is the first central bank in the world to acknowledge that depending on "core" inflation is a worthless exercise:”Our target variable is the CPI. We want to be clear about this. Our strategy and our inflation target stand firm. Over the years,

Boomernoreply@blogger.com0tag:blogger.com,1999:blog-30611625.post-19425105151002287322008-06-09T15:42:00.002-04:002008-06-09T15:50:20.861-04:00

Warren Buffet has made a bet with Protege Partners (with the winnings going to charity). Buffet's bet is that an S&P 500 index fund will beat the results of a Fund of Funds hedge fund, after fees over the next ten years. I think Buffet will probably win the bet and we can only hope he's around to see it. Funds of Funds are known in the business as Funds of Fees for a reason.

Boomernoreply@blogger.com0