January 21, 2014
As we reflect on another year in the financial markets, whether you were deeply invested in equities or safely earning market-linked interest as they rose, it is once again enlightening to see who was right—and who was way off—in 2013, and what investors should have learned, but probably didn’t. Here goes: The Forecasters were wrong—again. At the end of last year, CNNMoney polled 30 of the major asset managers on Wall Street, asking them where they thought the S&P
November 11, 2013
Jim Cramer, host of MAD Money on CNBC, has a problem. The sound-effects specialist and equal-opportunity stock mocker has noticed a compelling trend on Wall Street. It seems those stocks and sectors that tend to do well in a recovery are declining, even as those which advance amid slowdowns are attracting capital. The cantankerous Mr. Cramer has finally tripped over the tip of the iceberg. Today we have two contrasting metrics. One the one hand, a recent Forbes survey of
October 15, 2013
$1.05 Trillion Printed, 1.3 Million Fewer Jobs Consider the following staggering statistic: Since 2008, Ben Bernanke has increased the Fed’s balance sheet from $480 billion to $3.5 trillion, a 730 percent increase in five years. So what did we get for all of those asset purchases? Predictably, it depends on who you ask. If you ask Wall Street, clearly they’re happy. Since March 9, 2009, after a 57 percent sell-off of the S&P 500, that index has posted a gain
September 23, 2013
Surprised Markets Rally To New Records, Then Retreat Is it just me, or does anyone else find irony and abnormality in the headline, “Fed Cuts Outlook Again, Cites Fragile Economy, Stocks Roar to New Records”? Welcome to The New Abnormal, friends, a surreal condition wherein bad economic news is cheered by the frat boys on Wall Street because it means that Professor Ben will continue to enable them by keeping their punch bowl filled with their favorite elixir: Free Money
August 20, 2013
Depending on which experts you ask, the stock market is either about to suffer another precipitous decline a la 2007-9 — or continue a rally with no end in sight. Both sides have their math (more on that in a moment), but the bears increasingly have statistics, history, and facts on their side. In early July, Americans learned that first quarter U.S. economic growth (GDP) was revised downward to 1.8 percent from the previously-estimated 2.5 percent annual pace—a massive overestimation
May 13, 2013
If you blinked, you missed it: the amount of time that the US financial media has spent analyzing the potential fallout from recent events in Europe, not just in Cyprus but in Italy, Spain, Slovenia and elsewhere. At this writing, US markets are up nearly 12 percent year-to-date, either unconcerned or oblivious to the multiple crises developing in the Mediterranean region on economic, political and military fronts. In Cyprus, the extortion that the Cypriot government agreed to with the European
March 22, 2013
In this 2011 analysis in Smart Money magazine, which remains timely and relevant today, author Glenn Ruffenach makes the point that the advisor who got you to retirement, is very often not the specialist you’ll need to get you through retirement. When we were in our thirties, forties, and fifties, an advisor’s mission was to get us to our target retirement date by growing our retirement savings subject to risk, primarily in the stock market. When the market grew, we
February 19, 2013
At the end of last year, CNNMoney took a survey (Stocks ‘need to be corrected’) wherein they polled more than 30 investment strategists and money managers as to where the S&P 500 would finish 2013. The realistic consensus was a valuation of 1,490, up just 4.5 percent for the year, given the multiple headwinds of debt, Europe, tensions in the Middle East, slowing GDP, and the pending implementation of ObamaCare at year end. That was the last week of last year.
January 25, 2013
Why the market’s upcoming milestones will not be gratifying for retirees Last week, the financial networks touted two of the three major market indices – the Dow Jones Industrial Average and S&P 500 – for their recent advances to within sight of their all-time highs. The S&P 500 is now just 5 percent shy, while the DJIA is but 3.6 percent below its top mark. (Meanwhile, the NASDAQ is nowhere to be found, still a stunning 38 percent below
January 4, 2013
What is the 10-Year Treasury Telling Us? As the Federal Reserve has “printed” money over the last 5 years, few Americans understand that the majority has been electronically generated (placed on the Fed’s balance sheet by the mere entering of a number in a computer), and “distributed” into the economy via mandatory loans to the major banks in 2008. The interest rate on these loans has ranged between zero and 0.25%, but these are loans nonetheless, and are therefore subject
