Monthly Archives: May 2009

Eight Notes on the Actions of the US Government on the Economy

1) I have said it before, but what are the limits of the US Government borrowing money?  Aside from God, everything has a limit.  I appreciate finem respice as she says: Of course, the next bubble (and perhaps the last for a while) is government. The state government bubble is beginning to burst even as […]

The First Priority of Risk Control

In early 1994, after the Fed’s first rate hike in what would be annus horribilis for the bond market, I was behind in my quota for selling Guaranteed Investment Contracts [GICs] at Provident Mutual.  Worse, my liabilities were running off faster than my assets.  My bosses gently nudged me about sales, and I told them […]

Fifteen Thoughts on Advantage in the Markets

1) I made the point last week when I talked about my experiences in the pension division of Provident Mutual.  The investment choices of 90% of individuals follows recent performance.  This is another factor in why markets overshoot, and why mean-reversion is a weak tendency.  Thus when I see many leaving the stock market for […]

Phase Change

Longtime readers know that my investing interests are broad.  I almost decided to name this blog, “The Investment Omnivore,” but took the name of the investment fund that I deeply considered creating in the 90s, and used that. So, when notable things happen, I tend to switch to where the action is.  On a day […]

Thirteen Aspects to our Current Economic Situation

1) Last night I started out with the concept of a “housing mismatch.”  Today, with a hat tip to Calculated Risk, I can make my case better.  The low end of the market is humming, as new buyers come in.  Makes sense.  Who get the capital together for a downpayment?  New homebuyers for homes on […]

Fifteen Notes on our Current Economic Situation

1) I don’t think that residential real estate prices are turning in general.  But even if residential housing recovers, and demand returns, there will be a “housing mismatch.”  There will be too many high end homes relative to buyers.  Financing for high end homes is sparse, and too many expensive homes were built during the […]

What is the Sound of One Hand Clapping? What is the Right Price when there is no Market?

No, this isn’t another discussion of SFAS 157, though there are some similarities.  There has been a bit of a brouhaha over repayment of TARP options.  Isn’t the government getting shortchanged? Maybe.  Maybe not.  This one is tough to answer, because at least as yet, there is no active market available for really long-dated call […]

Book Review: Financial Shock

Note to readers: for this review, I read the first chapter, and skimmed the rest of the book. (full disclosure)  I usually read the entirety of every book I review, but I did not this time.  Why?  Chapter 1 is the backbone of the book, and tells the whole story in a nutshell.  The remaining […]

Don’t Confuse Stupidity with a Bear Market

“So when are we coming out with a tasset fund?” “A tactical asset allocation fund?” I replied. “Mmm, it’s worth a thought, but you know what it takes to add a new product.  How much demand would there be for this?” “Are you kidding? In a bear market, people still want to make money.  We […]