Encore of Financial Collapse?
"...it is remarkable to watch the same financial institutions that almost wrecked our nation’s economy work to heighten risks in the system." AGREE. Along with efforts to hand out cheap money to home buyers who cannot afford a home, the Federal government is moving us closer to an encore of the financial collapse of 2007-2009. I plan to chronicle this steady movement toward the next financial crisis with postings such as this. Although it may be many years distant, the next crisis is inevitable and leveraged banks and real estate will almost certainly be involved.
Kicking Dodd-Frank in the Teeth
NY Times | By Gretchen Morgenson Jan 19, 2015
The 114th Congress has been at work for less than a week, but a goal for many of its members is already evident: a further rollback of regulations put in place to keep markets and Main Street safe from reckless Wall Street practices. The attack began with a bill that narrowly failed in a fast-track vote on Wednesday in the House of Representatives. It is scheduled to come up again in the House this week. Read More
China Bans Uber
What due Red China, the Cities of San Francisco, New York and Las Vegas, to name a few, have in common? They ban Uber the quintessential free market innovation, most likely due to pressure from unions and the politicians who collect fees and limit access to transportation for citizens.
"China bans private drivers in taxi app clampdown"
Reuters | SHANGHAI Thu Jan 8, 2015 9:29pm EST
(Reuters) - China's transport ministry has banned taxi hailing apps such as Uber Technologies Inc and local rivals Kuaidi Dache and Didi Dache from using cars and drivers without taxi licenses in a bid to regulate the rapidly growing sector. The nationwide ban comes after authorities in the Chinese city of Chongqing began investigating Uber in December over concerns that its drivers were not properly licensed. Read More
Far-reaching Implications of Swiss Bank Decision
The author of this article has a diplomatic (or elliptical) way of expressing that, because European politicians have failed to change policies that make it very expensive to start new businesses or hire (or fire) workers, economic activity is stuck in neutral there. Most European nations are socialist, taxing businesses, especially small businesses in the form of high benefits, short work weeks, long mandated vacations and severe penalties for laying people off during difficult times. This discourages creative entrepreneurs from bothering to take the risk of starting new ventures.
"Implications of the SNB decision extend far beyond Switzerland"
By Mohamed El-Erian January 15, 2015 5:57 pm
You need only look at the immediate reaction of the foreign exchange markets to the Swiss National Bank’s announcement on Thursday that it was dismantling its one-sided currency peg against the euro to get a sense of the momentous and surprising nature of the decision. Read More
Consistency Is a Virtue for Financial Advisors
Does anyone remember Elaine Garzarelli? Henry Kaufman? Martin Zwieg? These were widely quoted market gurus of the '70's and '80's who got one or two predictions right, then became media darlings. None were successful actually handling real money for real people. Consistency is an under appreciated virtue in my business. Trusted Financial Advisors values this virtue.
"Whitney's Fund Said to Drop 11% as Office Put on Market"
By Max Abelson Dec 21, 2014 6:36 PM PT
Dec. 22 (Bloomberg) –- Meredith Whitney, who started a hedge fund after becoming one of Wall Street’s most famous analysts, is facing tough times. Bloomberg’s Max Abelson reports on “In The Loop.” (Source: Bloomberg)
Read More
Today’s Eisenhower Economy
Emerging from the scariest Recession (note the capital “R”) in three generations, America seems to be enjoying a well- mannered economic recovery the likes of which were probably last seen in the 1950’s. Let’s summarize the good news, for those of you too impatient to read this entire blog post:
- Low inflation -- should continue
- Low interest rates -- little risk of a sharp rise
- Rising employment -- New jobs are being created at the rate of over 200,000 per month
- Good consumer confidence -- people are spending on cars, remodeling, dining out and vacationing again
- Buoyant stock market
- Buoyant housing market
- Buoyant retail sales
- Complacency - there does not appear to be a likelihood of some great social upheaval as in the 1960’s and 1970’s
Big Day & Week for Kinder Morgan Investors
This energy transportation company was the financial headline du jour on Monday August 11. The company is really a “family” of companies all under the oversight of Richard Kinder who once was CFO at Enron, which became a House of Fraud after his departure. Over the past 18 years he has overseen the growth of his company from a handful of natural gas pipelines to what is now the third largest energy company in the world. We have invested our clients capital in one or more of the Kinder Morgan entities since early 2004, enjoying average annual returns in the double digits with steadily rising dividends all along the way.