views on markets, equities, bonds, derivatives, finance, investing, the economy

US Recession Began in 2012 says ECRI's Achuthan (Video)

U.S. Recession Began in 2012, ECRI's Achuthan Says: Video - Bloomberg: "July 30 (Bloomberg) -- Lakshman Achuthan, co-founder of the Economic Cycle Research Institute, talks about the U.S. economy. Achuthan speaks with Tom Keene and Sara Eisen on Bloomberg Television's "Surveillance." (Source: Bloomberg)"

Freud, Gold, the Fed, and the Dollar

Freud and the Fed - The New York Sun: " . . . Mr. Krugman would have his readers believe that the Sun and the Journal have objections to a woman chairman the Fed. That’s because he dasn’t open up the question of the value of the dollar in the terms the framers of our constitutional system intended. The fact is that the founders of America would be appalled at the monetary system that obtains in America today . . . So would the creators of the greenback and the founders of the Federal Reserve itself. One hundred years ago Congress established the Fed on the express condition that, as it was put by the Fed’s leading congressional supporter, Carter Glass, nothing in the bill should be construed as a repeal of the law “providing a gold parity for all forms of money.” We have our doubts about what Keynes himself would have made of a dollar valued at but a 1,300th of an ounce of gold. . . ." read more at link above

Successful Market Timing, Urban Legend, One Question, Eurocrisis Again

Successful Market Timing is an Urban Legend | Servo Wealth Management: " . . . . After the fact, it’s not uncommon to hear heroic stories of investors with perfect prescience in 2008—getting out of stocks prior to the worst of the decline, only to jump back in early on and participate in almost all of the recovery.  Upon further inspection, it turns out even a well-orchestrated entry and exit from stocks would not have proved profitable on a risk-adjusted basis compared to a more balanced asset class portfolio that was simply held and rebalanced periodically through the ups and downs.  As is so often the case, 2008 reminds us the legend of successful market timing is more of an urban legend." (read more at link above)

The One Question You Must Ask Before You Invest - Forbes: What is your edge as an investor? (read more at link)

Mish's Global Economic Trend Analysis: Former ECB Chief Economist Warns "ECB Will Soon Have to Support France with Bond Purchases": "The Euro crisis will worsen in late autumn" (read more at link)

Jeremy Grantham on the Charlie Rose Show (video)

Jeremy Grantham on Charlie Rose Charlie Rose, March 12 2013: Jeremy Grantham, co-founder and Chief Investment Strategist of Grantham Mayo Van Otterloo (GMO), discusses investing in a low-growth world and the outlook for the US economy.

Detroit Will Be In Bankruptcy For A Long Time (video)

Harvey Miller: Detroit Will Be In Bankruptcy 'For A Long Time'  July 24 (Bloomberg Law) -- Harvey Miller, partner at Weil, Gotshal & Manges, tells Bloomberg Law's Lee Pacchia that Detroit's recently filed Chapter 9 bankruptcy case will not be an easy restructuring. In addition to the profound economic challenges facing the city and the limited ability of a bankruptcy court to force changes on its government, the fundamental tension between bondholders, pensioners and taxpayers could mean Detroit will remain in tangled up in litigation for a long duration of time. "There's going to be a lot of legal fighting in this," he says.

"All bets are off in bankruptcy court because you cannot tax a hollow shell. And what is Detroit but a hollow shell? Triumph of Math Over Unions - As for pension claims and the Michigan constitution? Same thing: You cannot pay what you do not have. This is the triumph of math and common sense over union greed, arrogance, threats, and coercion. Future Rating Impact - The Bond Buyer says Detroit Filing Could Impact Future Rating Analysis Read more at "

Miami, magnet for gold, international banking

Miami is a magnet for gold - Business - " . . . Although Miami may have a reputation for glitz and bling, few people realize it is one of the hubs for the nation’s gold trade. Last year — for the first time — gold was both the top import and export from the Miami Customs District, which includes airports and seaports from Palm Beach County to Key West. But the reality is most of the gold entered and left via Miami International Airport. More gold arrived in Miami than any other U.S. customs district last year . . ."

Sabadell buying Lloyds bank business in Miami - South Florida Business Journal: "The deal will require regulatory approval. It is related to the previous transaction in which Lloyds sold its business in Spain to Sabadell in exchange for a minority stake in Sabadell. The Banco Sabadell international branch in Miami, which serves foreign clients seeking to do business in the United States, generated $36.1 million in net income in 2012 – making it the most profitable of the 22 foreign bank branches in the state."

China, GDP crumbles, financial bind

China’s Financial Bind: "China’s slowing economy is challenging the government to enact reforms without exacerbating the problem."

China risks deflation trap as true GDP crumbles - Telegraph"“It is too late to avoid a hard-landing,” said Patrick Chovanec from Silvercrest Asset Management and a former professor at Beijing’s Tsinghua University. “To keep growth going they have to push extremely high levels of investment to even more extreme levels, and that is becoming very hard to do and very hard to finance.” “The economic return on credit is rapidly declining. They increased loans by $1 trillion in the first quarter, but growth slid anyway and is now below levels seen in early 2009 after the Lehman crisis. It is no longer out of the question that GDP will actually fall,” he said. . . ." (read more at link above)

Slow Moving Debt Crises, Bad Equilibria, Fiscal Policy Rules

Slow Moving Debt Crises and Fiscal Policy Rules - "a country may find itself in a self-fulfilling “bad equilibrium” with high interest rates"

Reduce Insider Trading with real-time continuous disclosures

James Surowiecki: Why Is Insider Trading on the Rise? : The New Yorker: " . . . “Insider trading is, by definition, based on information that is not known to investors,” Baruch Lev, a professor of accounting and finance at N.Y.U. and an expert on corporate disclosure, told me. “If you increase transparency, the gains for insider trading must go down.” Back in 2002, Harvey Pitt, who was then the head of the S.E.C., told Congress that companies should be providing investors with regular updates about their performance, rather than just making quarterly disclosures. More consistent, if not real-time, data about revenue, new orders, and major investments would help investors make more informed decisions and, into the bargain, would diminish the value of insider information. If companies tell us more, insider trading will be worth less."

Bill Gross on Central Banks including US Fed

"There comes a point when no matter how much blood is being pumped through the system as it is now, with zero-based policy rates and global quantitative easing programs, that the blood itself may become anemic, oxygen-starved, or even leukemic, with white blood cells destroying more productive red cell counterparts" --Bill Gross of PIMCO

Bill Gross: Hey Fed, your stimulus isn't working: " . . . . And to Fed chief Ben Bernanke's claims that once economic growth has been restored to normal levels, financial markets can also return to normal interest rates and returns, Gross has a few stern words: "Well it's been five years Mr. Chairman and the real economy has not once over a 12-month period of time grown faster than 2.5%," he disputes. "Perhaps, in addition to a fiscally confused Washington, it's your policies that may be now part of the problem rather than the solution.". . ."

The Federal Reserve and destruction of the dollar

Will The Federal Reserve Provide Us With The Next Abuse Of Power Scandal? - Forbes: " . . . Some analysts with libertarian and conservative leanings might fear that if they highlight the names of private sector actors who reap profits thanks to their privileged relationship with the government, they might provide ammunition to those who want even more government intervention in the economy. This is a reasonable concern, but it is a handicap for those who want to defend the free enterprise system, including banking, on moral grounds. This December the Fed will celebrate its 100th birthday. Under their authority, the dollar lost 98% of its value. Nevertheless, unless price inflation kicks in or a major scandal is revealed, it will not be easy to foil its party."

UCLA report gives dismal picture of economic recovery

UCLA Anderson Forecast paints dismal picture of economic recovery - "The country's tepid growth in its gross domestic product isn't creating enough good jobs to build a strong middle class, according to a UCLA report . . . "Growth in GDP has been positive, but not exceptional," UCLA economists wrote in their quarterly Anderson Forecast. "Jobs are growing, but not rapidly enough to create good jobs for all." The report, which analyzed long-term trends of past recoveries, found that the long-anticipated "Great Recovery" has not yet materialized. Real GDP growth — the value of goods and services produced after adjusting for inflation — is 15.4% below the 3% growth trend of past recoveries, wrote Edward Leamer, director of the UCLA Anderson Forecast. More robust growth will be necessary to bring this recovery in line with previous ones. "It's not a recovery," he wrote. "It's not even normal growth. It's bad.""

Business - Google News

Credit Writedowns

Central Banking