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Government and Economics

Corporate America

government-and-economics

David and the Corporate Goliath

As the Bible story goes, the lowly but courageous David found the weak spot on the forehead of the mighty Goliath and 'slew him dead'. Will the individual investor vs. the corporate giants be so lucky? Probably not. First of all there is no single forehead to aim for. The corporate scandals of late have many legs and, arguably, less than one functioning head. So where does the slingshot aim? The finger of blame has pointed to all but the rank and file of the corporate team. Is it the... more

Monetary Policy and the Federal Reserve

government-and-economics

Money Supply and the Markets

Our problem today in analysing the economy and markets is that we have just experienced a 10 year avalanche of excessive money supply growth. If you have any doubt about this, take a look at the chart in Market Notes 63, titled 'Who's the Patsy'? The idea that we or even the central banks have any clear idea of where we currently stand given the magnitudes is simply unrealistic. For now central banks have finally started an attempt to reduce liquidity by gradually raising interest rates. But... more

Government Regulations

government-and-economics

How Secure Is Social Security?

Unless you're close to retirement age, whether you can count on Social Security benefits to help fund your retirement is a concern. Currently, the system collects far more in Social Security taxes than it pays out in benefits, but that will change drastically as growing numbers of baby boomers retire. At the end of 2003, the Social Security system had excess assets of $1.5 trillion, invested in special-issue Treasury bonds. Starting in 2018, the system will start paying out more in benefits... more

Behavioral Finance

government-and-economics

Behavioral Finance

An industry leading research firm, DALBAR, reports that investors have certain behaviors which lead them to buy, sell and switch in and out of mutual funds. They just produced a study called the Quantitative Analysis of Investor Behavior (QAIB) and I'd like to share some of the main points with you so you'll hopefully avoid these pitfalls. The investor's behavior is the number one determinant in performance over the long haul as it relates to investments. There are terms that define the... more

World Economic Trends

government-and-economics

What the Oil (over)Supply Means for the Markets

Oil prices are down due to an oversupply, but this time it isn't all good news. By Anna B. Wroblewska   The stock market is having the worst January on record. At the same time, oil prices are sinking. These two asset classes -- which historically don't have much in common -- are moving together and going south.   But why? At the heart of the matter is an oversupply of oil, which is, in turn, related to a major economic shift in China. Here's what you need to know, why it matters,... more