(investmentnews.com) The U.S. government’s response to the economic crisis has been “financially imprudent and irresponsible,” Robert L. Rodriguez, chief executive of First Pacific Advisors LLC of Los Angeles, said today.
Rather than help the economy and the markets recover, the government’s moves to prop up failing companies and get consumers spending again may actually make matters worse, he said during a keynote presentation at the Morningstar Investment Conference in Chicago, which was sponsored by Morningstar Inc., which is based in that city.
Read the entire story
Friday, May 29, 2009
Still Working, but Making Do With Less
The new consumer is more frugal and likely to stay that way
(nytimes.com) LINCOLN, Calif. — The Ferrells have cut back on dance lessons for their twin daughters. Vaccinations for the family’s two cats and two dogs are out. Haircuts have become a luxury. And before heading out recently to the discount grocery store that has become the family’s new lifeline, Sharon Ferrell checked her bank account balance one more time, dialing the toll-free number from memory.
Read the entire story
(nytimes.com) LINCOLN, Calif. — The Ferrells have cut back on dance lessons for their twin daughters. Vaccinations for the family’s two cats and two dogs are out. Haircuts have become a luxury. And before heading out recently to the discount grocery store that has become the family’s new lifeline, Sharon Ferrell checked her bank account balance one more time, dialing the toll-free number from memory.
Read the entire story
Top Buffett Aide Says There's No Sign Of A Recovery
Berkshire not seeing the same "green shoots" as the media......
(www.businessinsider.com) During the recent Berkshire Hathaway (BRK) annual meeting, Warren Buffett admitted that signs of an economic recovery were few and far between, at least at his businesses.
His close advisors are saying the same thing. Speaking at the Ira Sohn investment conference in New York, top aide David Sokol, the head of Mid-America energy holdings said there were no signs of a rebound ("We're not seeing the green shoots.") in housing or the economy and that the housing mess might persist through 2011.
Read the entire article here
(www.businessinsider.com) During the recent Berkshire Hathaway (BRK) annual meeting, Warren Buffett admitted that signs of an economic recovery were few and far between, at least at his businesses.
His close advisors are saying the same thing. Speaking at the Ira Sohn investment conference in New York, top aide David Sokol, the head of Mid-America energy holdings said there were no signs of a rebound ("We're not seeing the green shoots.") in housing or the economy and that the housing mess might persist through 2011.
Read the entire article here
Wednesday, May 27, 2009
Mortgage Rates Soar As Quantitative Easing Fails
(www.businessinsider.com) $1.25 trillion of quantitive easing hasn't been enough to keep mortgage rates down. Will the government double down again?
Bloomberg: Yields on Fannie Mae and Freddie Mac mortgage bonds rose for a fourth day, after yesterday for the first time exceeding where they stood before the Federal Reserve announced it would expand purchases to drive down loan rates.
Yields on Washington-based Fannie Mae’s current-coupon 30- year fixed-rate mortgage bonds climbed to 4.3 percent as of 10:25 a.m. in New York, the highest since March 10and up from 3.94 percent on May 20, data compiled by Bloomberg show.
Read the entire story
Bloomberg: Yields on Fannie Mae and Freddie Mac mortgage bonds rose for a fourth day, after yesterday for the first time exceeding where they stood before the Federal Reserve announced it would expand purchases to drive down loan rates.
Yields on Washington-based Fannie Mae’s current-coupon 30- year fixed-rate mortgage bonds climbed to 4.3 percent as of 10:25 a.m. in New York, the highest since March 10and up from 3.94 percent on May 20, data compiled by Bloomberg show.
Read the entire story
Saturday, May 23, 2009
The Last Hurrah and Seven Lean Years
(www.gmo.com) Another must read from Jeremy Grantham...this time his May letter
Read the letter here
Read the letter here
TARP Warrants Show Banks May Reap ‘Ruthless Bargain’
(bloomberg.com) Banks negotiating to reclaim stock warrants they granted in return for Troubled Asset Relief Program money may shortchange taxpayers by almost $10 billion if Treasury Secretary Timothy Geithner’s first sale sets the pace, data compiled by Bloomberg show.
While 17 financial institutions have repaid TARP funds, two have come to terms with the U.S. on the value of the rights to buy stock that taxpayers received for the risk of recapitalizing the industry. The first was Old National Bancorp in Evansville, Indiana, which gave the Treasury Department $1.2 million last week for warrants that may have been worth $5.81 million, according to the data.
Read the entire story
While 17 financial institutions have repaid TARP funds, two have come to terms with the U.S. on the value of the rights to buy stock that taxpayers received for the risk of recapitalizing the industry. The first was Old National Bancorp in Evansville, Indiana, which gave the Treasury Department $1.2 million last week for warrants that may have been worth $5.81 million, according to the data.
Read the entire story
Yale’s Swensen Recommends TIPS to Hedge ‘Substantial Inflation’
(bloomberg.com) May 23--David Swensen, the top-ranked college endowment manager in the past decade, said individual investors should own inflation-protected Treasuries because U.S. economic recovery efforts may lead to an increase in consumer prices.
“We’ve had this massive fiscal stimulus, massive monetary stimulus, and it’s hard to see how that doesn’t translate into pretty substantial inflation, or at least pretty substantial risk of inflation,” Swensen, Yale University’s investment chief, said in an interview on the “Consuelo Mack WealthTrack” television show that aired yesterday. Treasury Inflation- Protected Securities “should be in every investor’s portfolio," he said.
Read the entire article
“We’ve had this massive fiscal stimulus, massive monetary stimulus, and it’s hard to see how that doesn’t translate into pretty substantial inflation, or at least pretty substantial risk of inflation,” Swensen, Yale University’s investment chief, said in an interview on the “Consuelo Mack WealthTrack” television show that aired yesterday. Treasury Inflation- Protected Securities “should be in every investor’s portfolio," he said.
Read the entire article
CHART OF THE DAY: Credit Card Debt Swallows American Households*
(Clusterstock.com) *UPDATE: As several readers have noted, this chart compares an aggregate national figure with a per-household figure. This is an apples-and-oranges comparison. We apologize for the illogic and thank to our readers for catching it. We'll fix the chart on Monday.
EARLIER: Americans built up a lot of spending power over the last three decades, but it wasn't because they started earning more money. As today's chart starkly illustrates, credit card debt has exploded, making up for more modest gains in median household income. As you can see, for the very first time in history, credit card debt is creeping down, though it has a long way to go. And of course, this doesn't even include home all the home equity loans Americans used in place of the ATM. (Both lines are based on non-adjusted numbers)
Read the entire article
EARLIER: Americans built up a lot of spending power over the last three decades, but it wasn't because they started earning more money. As today's chart starkly illustrates, credit card debt has exploded, making up for more modest gains in median household income. As you can see, for the very first time in history, credit card debt is creeping down, though it has a long way to go. And of course, this doesn't even include home all the home equity loans Americans used in place of the ATM. (Both lines are based on non-adjusted numbers)
Read the entire article
Wednesday, May 20, 2009
Breakfast with David Rosenberg
(pragcap.com)The bulls enjoyed and the bears endured a massive 37% rally in the S&P 500 from the March 9th lows to the May 8th highs. Both in terms of duration and magnitude, this proved to be the most intense rally during this 20-month long bear market. And, the bounce has been so impressive that it has taken what was widely considered to be a massively undervalued stock market in early March to one that is now at least moderately expensive. (The FTSE All-World market P/E ratio on forward earnings estimates is now around 15x, well above pre-Lehman collapse levels and nearly double the lows for the cycle.)
Since the rebound from the March 9th lows was again led by the four sectors that led the decline during the bear phase – financials, consumer discretionary, materials and industrials – it stands to reason that this was just another counter-trend rally. What we know about history is that the sectors that led the downturn are never the ones to emerge as leaders in the next sustainable bull market.
Read the entire article
Since the rebound from the March 9th lows was again led by the four sectors that led the decline during the bear phase – financials, consumer discretionary, materials and industrials – it stands to reason that this was just another counter-trend rally. What we know about history is that the sectors that led the downturn are never the ones to emerge as leaders in the next sustainable bull market.
Read the entire article
Benefits of Being Benchmark Agnostic
(firsteaglefunds.com) Excellent piece by Jean-Marie Eveillard about benchmarking and closet indexing.
Read the article here
Read the article here
Sunday, May 17, 2009
Charlie Munger's got a billion words of wisdom
(latimes.com) About an hour before Charlie Munger, the Oracle of Pasadena, is set to speak, the pilgrims start filling a ballroom at the Pasadena Civic Center.
I am one of them. As I settle in, I meet Imelda McCarthy, retired and "a bit over 21," who is here from Dublin, Ireland, and attending with her 34-year-old son, Darrach, who lives in West Los Angeles. Bush Helzberg, an investment manager, flew in with his wife from Kansas City, Mo. Michael McGowan, author of "The Guide to Gold," comes every year from just down the street in Pasadena.
Read the entire article
I am one of them. As I settle in, I meet Imelda McCarthy, retired and "a bit over 21," who is here from Dublin, Ireland, and attending with her 34-year-old son, Darrach, who lives in West Los Angeles. Bush Helzberg, an investment manager, flew in with his wife from Kansas City, Mo. Michael McGowan, author of "The Guide to Gold," comes every year from just down the street in Pasadena.
Read the entire article
Saturday, May 2, 2009
One on One with Charlie Munger, Vice Chairman Berkshire Hathaway
(www.pbs.org) SUZANNE PRATT: Warren Buffett says he wants tough questions from shareholders at Berkshire Hathaway's annual meeting tomorrow. Investors will certainly ask about the company's stock. It has tumbled more than 30 percent in the past year. Also answering questions, Charlie Munger, Buffett's business partner for half a century and Berkshire's vice chairman. Munger keeps a low profile, but today in Omaha, he sat down for an interview with Susie Gharib. She began by asking him what he'll say to shareholders tomorrow to restore confidence in Berkshire.
CHARLES MUNGER, VICE CHAIRMAN, BERKSHIRE HATHAWAY: I think the reality is that if you hold a stock for a long long term even though it's screamingly successful as an investment, you will have huge declines in the value of that stock two or three times in half a century. And I don't think that should bother long term holders all that much.
GHARIB: Mr. Munger, shareholders will certainly have questions tomorrow on why Berkshire took such large positions in derivatives especially since you and Mr. Buffett have warned for years that derivatives are dangerous investments. What are you going to tell them?
Read the entire article
CHARLES MUNGER, VICE CHAIRMAN, BERKSHIRE HATHAWAY: I think the reality is that if you hold a stock for a long long term even though it's screamingly successful as an investment, you will have huge declines in the value of that stock two or three times in half a century. And I don't think that should bother long term holders all that much.
GHARIB: Mr. Munger, shareholders will certainly have questions tomorrow on why Berkshire took such large positions in derivatives especially since you and Mr. Buffett have warned for years that derivatives are dangerous investments. What are you going to tell them?
Read the entire article
Subscribe to:
Posts (Atom)
Posts
