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You can’t win if state won’t pay
Is nothing sacred?… The Chicago Tribune reports that Illinois is considering suspending payouts to lottery winners in excess of $25,000: Lottery to again delay large payouts due to Illinois budget woes… The State did it once before, in 2015, with disastrous results…
Traders hit snooze on central bank alarms
One of the oldest sayings in finance is very simple, “Don’t Fight the Fed”… As Bloomberg points out in today’s story Central Bankers Tell the World Borrowing Costs Are Headed Higher, the world’s central bankers (including the Fed) are signaling higher interest rates… The markets have not yet gotten the message, lulled to sleep by […]
US stocks toddling for a tumble?
TIAA Chief Investment Strategist Brian Nick makes an awesome analogy to Bloomberg: U.S. Equities Are Risky Like a ‘2-Year-Old on a Jungle Gym’… “The higher the climb, the worse the fall”…
Trouble in paradise?
Puerto Rico is in bankruptcy… The Virgin Islands may be next, according to the New York Times article After Puerto Rico’s Debt Crisis, Worries Shift to Virgin Islands… All the same problems, on a smaller scale… Hard to believe that all the special tax breaks in these jurisdictions will survive…
The Sasquatch of macro indicators
Economic theory says that there is a perfect “neutral interest rate” where everything stays in line… Mohamed A. El-Erian discusses this in his Bloomberg opinion piece What You Should Know About r*… There’s just one small problem… “r* is not directly observable”… This means that the correct level is only know with 20/20 hindsight…
Ink-stained wretch earns star turn
Diana Henriques of the New York Times broke many of the key stories on Madoff in 2008 through 2010… And then she was the only journalist to interview him in prison… But she outdid herself this year, when she played herself in the HBO movie Wizard of Lies… iNews in its story Diana Henriques: the […]
NY Post floats the ‘R’ word
The New York Post is asking the right question today: A New Recession?… With some good observations by Aparna Mathur, an AEI resident scholar… The U.S. birth rate is down… Immigration is down… New family formation is down… Older people are consuming less because they are concerned they may outlive their retirement savings… And labor […]
Madoff dishes in depo
Bernie Madoff has given a three day deposition, as part of civil suits in the ongoing liquidation… Bloomberg reports in Bernie Madoff: ‘I Always Wanted to Please Everybody’ the big reveal, which is that his core investors (Picower, Shapiro, Chais and Levy) knew from the start that he was a fraud… Although Bernie is not […]
Banco Popular deal symptom of ongoing reckoning in Europe
Gretchen Morgenson of the New York Times in her piece Lessons From the Collapse of Banco Popular reminds us of the continued perilous state of the European banking system, which never properly deleveraged after the Financial Crisis…Banco Popular, Spain’s fifth largest bank, was suddenly sold in a government-sponsored rescue to Banco Santander… This was the […]
Survey: US investors living in Lake Wobegon, where all returns above average
Lisa Abramowicz of Bloomberg Gadfly has a thought provoking article today: Stop Fooling Yourself About 8% Easy Returns… Legg Mason surveyed 900 investors in the United States, whose average expected rate of return was 8.64% (non-retirees had even higher expectations, at 9.27%)… The current dividend yield of the S&P is 1.9%, investment grade bonds yield […]
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