Anyone with an investment portfolio is probably familiar with the well-worn phrase “past performance is no guarantee of future results.” Bill Gross goes a step further in his August Investment Outlook, writing that not only should we not expect big returns from equities any time soon, maybe we should never expect them again.
“The cult of equity is dying,” the founder and co-CIO of Pimco begins his monthly commentary, which goes on to [...]
The other global strategic thinker with a decent white beard, Bob Janjuah of Nomura, sees weaker growth, weaker earnings and a great deal more volatility in the short- and medium-term for the US. Not a fan of the decoupling miracle, Janjuah explains (following our last discussion of his thoughts) in this Bloomberg TV interview that US data is showing only a temporary improvement with the forthcoming fiscal drag into next year likely to slow the [...]
The entity remains a separate legal entity under the BAC capital structure with $3.8bn of direct Senior Unsecured and Senior Subordinated debt and an aggregate exposure around $6.5bn from all the sub-entities under the CFC entity. Of course, threatening the use of this legal route will not be a tidy process and will likely bring in doubt the rest of BAC’s capital structure to [...]
by Peter Tchir of TF Market Advisors
Reaching for Yield and Clubbing Baby Seals
With Greece “solved” and economic data topping expectations we are back in full risk on mode. Once again the quest for yield is on every fixed income investor’s mind. Reaching for yield is when investors make an investment based on wanting more current income. It may be a subtle differnce, but the mentality [...]
Dollar weakness hidden by Fed workings, litte bad press for the Fed despite a dismal track record, unbridled fraud, theft and criminality on Wall Street, ARMs are back, Barney Frank challenges white paper on housing finance to do better for Americans, rising food and fuel problems a question for everybody, Soros warns of Media co-opting politics, Fox news all made up.
Rather than have designation to [...]
? Washingtonâ€™s Blog
We are faced with a choice here.
We can either have a rational resolution to the foreclosure crisis or we can preserve the capital structure of the banks. We can’t do both.
In other words, we either let the giant mortgage and foreclosure crisis drag both the economy and the rule of law down, or we can rein in the giant banks.
Other great quotes from yesterday’s Congressional Oversight [...]
The current economic disaster is the result of the combination of negligence, hubris, and wrong economic theory. For decades, an economic and monetary policy has been practiced based on the illusion of, “It doesn’t matter.” At first it was, “Deficits don’t matter.” From that, the policy of “it doesn’t matter” got extended to money creation, the credit expansion, the stock-market bubble, and the housing boom. Now, we’re being told that [...]
Anyone who has studied economics knows that low rates, over time, systematically contribute to the buildup of financial imbalances by encouraging rampant speculation. It encourages investors and speculators to take on short-term sources of funds to invest in long-term assets, which are much riskier when backed up with a debt-heavy capital structure. There is absolutely no incentive for the public to save nor is there an incentive for people to [...]
The 149,268 consumer bankruptcies filed in March 2010 represented the highest monthly consumer filing total since Congress overhauled the Bankruptcy Code in 2005, according to the American Bankruptcy Institute. We have OVER 40 MILLION Americas on food stamps! Consumer spending is up but peel back the numbers Kate – wages adjusted for inflation are flat that means people are re-leveraging their balance sheets taking out more debt.
Year to date (fiscal [...]
The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short [...]