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Monthly Archives: April 2008

Investment Update

Let’s roll-up all this financial data and comment on what it means to your investment portfolio. We are facing a period in investing that will at best materialize as 3-5 years of no /low gains in the US and Europe. At worst, we could see an economic calamity that encompasses the world economy and takes even longer to sort out – and with deeper […] Read the rest of this entry »

The Fed’s uphill battle

The Fed is working overtime to try to forestall an economic slump in the US. In it’s most recent efforts (past few months), it has slashed the Fed funds rate from 5.25% to 2.25%. This means real short term interest rates are negative since the core CPI is only 2.3%. As of the date writing this, fed-funds futures contracts are pricing-in a near term […] Read the rest of this entry »

China Growth

China’s economy has been growing at an astounding rate, and there seems to be good reason for continued growth. This unprecedented growth is driving up the cost of commodities and just about anything that has to do with construction and transport. Let’s put some figures out to shed some light on the scope of the growth: The world’s largest airport terminal was built in […] Read the rest of this entry »

The collapse of Bear Stearns

Bear Stearns is the 5th largest investment bank in the US. A little more than 12 months ago, its share price was $170. JP Morgan is now positioned to buy it for $10/share. What went wrong, and why should you care?                                   Investment banks are a key player in the public markets. They work with companies and governments to help them raise financing – […] Read the rest of this entry »