Sunday, March 31, 2013
Friday, March 29, 2013
Wednesday, March 27, 2013
€100,000 invested with Madoff 5 years ago would still be worth €79,000. If you deposited it in Laiki Bank, you now have €20,000 <cough>
— Grant Williams (@ttmygh) March 27, 2013
Tuesday, March 26, 2013
Monday, March 25, 2013
Sheila Bair with Bill Moyers
Sunday, March 24, 2013
Friday, March 22, 2013
"Have they no grandchildren?"
--Jeremy Grantham, interviewed by Charlie Rose
Investment adviser Jeremy Grantham (GMO) worries that the human population has surpassed the carrying capacity of planet Earth. We are seven billion going on ten by 2050; we need to be on our way back down to four. We survive at the moment solely because of fossil fuels, representing "millions of years of stored energy" and affording us "an amazing, but short, time-out." How short? Let's say 250 years, and we are well into the second half.
In the competition for resources, "the rich half of the world is pricing out the other half." Crude oil has quadrupled in price since 2000. Indeed, "resource prices are squeezing the rest of the system," likely constraining economic growth to little more than 1% annually for the foreseeable future. The world's phosphorus, essential in sustaining animal and plant life, will be exhausted in 50 years, assuming an annual increase of 2% in consumption. Most portfolio managers don't care. They live in a "paper world," not the real one, and are too busy chasing short-term returns to worry about long-term consequences.
Grantham advises that we not confuse human ingenuity with a resource bonanza. To those confident that we will somehow figure things out, Grantham observes that throughout human history robust civilizations, prior to the mining of coal, routinely collapsed. After the time-out, they may again.
Thursday, March 21, 2013
Sunday, March 17, 2013
Friday, March 15, 2013
In the crosshairs: JPM CEO Jamie Dimon
--N.Y. Times DealBook [full article here]
Full Senate report here.
Senate hearing begins in one hour.
Tuesday, March 12, 2013
Sunday, March 10, 2013
Tuesday, March 5, 2013
Monday, March 4, 2013
The man with a plan.
"Further deficits are not a viable option, and threaten undesirable long-term consequences. The ideal solution is to pair deficit reduction efforts with policies to stimulate gross domestic investment. 'Investment' in this context does not mean financial investment, but real investment in factories, equipment, capital goods, research, and development. Policies to stimulate investment include investment tax credits, accelerated expensing of investment, R&D incentives, and similar programs....[emphasis author's]
"The only sustainable course to a higher standard of living is to encourage productive investment. Policies like those currently pursued by the Federal Reserve attempt to encourage consumption, but do so by distorting savings and investment decisions toward speculative activity rather than productive investment. Unfortunately, the reluctance of consumers to spend is tightly linked to existing mortgage and consumer debt burdens, many of which remain unserviceable and have not been restructured. Attempts to squeeze greater consumption demand from these individuals, without a strategy to increase productive activity and income, is likely to produce continued failure.
"While policies to stimulate gross domestic investment may be viewed as unwanted 'tax expenditures' in deficit reduction efforts, these policies are critical to prevent the unintended consequence of economic contraction."
John Hussman's commentary appears in full here.
Saturday, March 2, 2013
"It's very painful to be a borrower in a refi or a purchase position...it's the relatively small number of approvals. And I hate to say this, but it's probably going to get a little bit worse along those lines before it gets better."
--Rick Sharga, Carrington Mortgage Holdings, in a recent radio interview