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Category Archives: bond market forces US debt reduction

Short Economic Stories Jan 21 2012

Big Picture: Warning: The mini greedometer (tactical risk indicator) is displaying readings previously only seen when the S&P500 was within 5% of a secular (long term) top. The greedometer (strategic risk indicator) is approaching dangerous risk levels as well. There is very little upside and a great deal of downside to risk assets (stocks, junk bonds, commodities, REITs) at this time. A much more […] Read the rest of this entry »

Year End Letter 2011 (& 2012 Forecast)

Strategic Indicator:  Greedometer Last week, the greedometer registered 5400 rpm, a respectable but not unexpected jump from the previous week 4800rpm. And with that, we have the end of the year-end rise in the greedometer.  The 2011 set of greedometer readings resemble that of 2007. Indeed, both years saw the last or second to last week finish with a 5400rpm reading. Uncanny.  And foreboding.   (the […] Read the rest of this entry »

Short Economic Stories: US

Moody’s debt ratings service is threatening to lower their US sovereign debt rating if the Congress lets things slide until November 2012.  Rightfully so.  Speaking of debt ratings threats, Standard & Poors threatened to do the same to Japan.   S&P debt ratings service lowered ratings on most of the big US banks a couple hours ago.   Last week’s durable goods orders report was bad. Upward US GDP […] Read the rest of this entry »

What to expect, when you’re expecting financial system contagion.

Today, the IMF stepped into the fray to arrest the creeping financial system melt-down in Europe. The ECB refuses to ramp-up lending to its own, so the IMF is putting everyone’s money at stake instead. Let’s see….  European banks are being supported/ bailed out by their national governments. These national governments are being further bailed out by the supranational entity- the European Central Bank (ECB). The ECB is hitting […] Read the rest of this entry »

Short Economic Stories: US

The BEA lowered its estimate of 3Q GDP to 2.0%.  3Q is history and no ones cares. 4Q GDP is likely to start out strong as well (2% is strong?), but will drop towards 0 by year end. It is hard to see a 4Q GDP appreciably better than 1%. And it remains hard to see the US avoiding a recession kicking off in […] Read the rest of this entry »

Short Economic Stories: US

Consumer sentiment rose to the highest it has been in 5 months. Last week saw consumer sentiment rise to 64.2. This is a nice bounce from the 55.7 in August. But consumer sentiment is considerably below where it was earlier this year (77.5 in February). More importantly, the long term average is 86. So the recent improvement in consumer sentiment is a rise from depression-like levels to recession […] Read the rest of this entry »

Weekly Short Economic Stories

There’s an old joke:   If you can keep your head while those about you are losing theirs, you clearly don’t understand the situation. Last week was one of the most volatile weeks in the history of stock, bond, currency, and commodity markets. We kept a cool head and had an outstanding week until Thursday.  France announced a short selling ban, and Sarkozy announced yet […] Read the rest of this entry »

Monday August 8 2011 (morning after S&P downgrade of US debt)

Having been glued to the websites of Reuters and several others this weekend, several tactical plans were developed and disseminated to clients before Asian markets opened last night. Again, these were tactical tweaking, not strategic in nature.  As of late morning, our portfolios were solidly in the green (up nearly 1%) while the Dow flirted with a 400 point drop. No tactical tweaking needed […] Read the rest of this entry »

Latest deficit reduction plan is another sham

On Tuesday the US Congress passed a bill to address the budget deficit. The plan calls for $900B in deficit cuts, and $1.5T in additional cuts to be found by a bi-partisan committee by the end of the year. This is a sham! • As miniscule as this is, most of the cutting is going to happen in the later years. • $25B in […] Read the rest of this entry »

Weekly Short Economic Stories

Gold hit new record highs – approx $1630/oz.  Gold is increasingly functioning like a currency hedge (as opposed to inflation hedge). The reasons are obvious and well explained in previous articles. Gold is up nearly 4500% since 1967 — the year before the US Congress began making noise about walking away from the gold standard in the Bretton Woods agreement. Looked at another way, […] Read the rest of this entry »