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Those funny media outlets are at it again
Happy Friday folks, Today was the release of January unemployment data. Not surprisingly the economy is estimated to have shed 598,000 jobs, bringing the unemployment rate up to 7.6%. This is the highest percentage unemployment rate since September of 1992. However, the media outlets that I follow are all reporting the job losses on an absolute, not a relative (%) basis. That then allows them to make true, but misleading and shocking statements such as: “Nonfarm payrolls, which are calculated by a survey of establishments, tumbled...
read moreNot for the first time Buffett and I agree
Yes, I know…no blog postings for 5 days and then POW, 5 in a row. Sorry folks, but good stuff is afoot. Fortune is running a story that can be found at http://money.cnn.com/2009/02/04/magazines/fortune/buffett_metric.fortune/index.htm that is saying that a metric of Warren Buffett’s is suggesting it is time to buy U.S. equities. Well, duh! Your’s truly has been saying that now for three weeks. Frankly, this is one of the best opportunities to buy equities since I have been an adult, lo these many years. So what the heck is...
read moreExecutive compensation caps, echo
Just after I posted my opinion of Obama’s proposed executive pay caps, CNNMoney.com published a story that confirms the most important point of the earlier post: “Importantly, I hope that this action on the part of the Obama Administration eventually leads to a national discussion about executive compensation practices and a change to the way most businesses currently reward their upper echelon employees.” CNN’s story, which can be found at...
read moreUpdate from the bottom, part II
OK, so now we are a month and a half past my December 16th posting “update from the bottom.” Recall that in that post I was updating you on the performance of the stock market subsequent to my having said a low was reached on November 20th. The closes of the three major stock market indices that day were: DJIA: 7,552.29 S&P 500: 752.44 NASDAQ: 1,316.12 These three indices have bounced all over the place, and there have been closes approaching these “lows” of November 20th, but none lower. I am not patting myself on...
read moreBoondoggle brokers conferences cancelled
As a former mutual fund portfolio manager I can tell you that one of the sources of (potential) corruption within the financial industry is the annual boondoggle conferences that major brokerage houses host. These conferences are sold to the institutional investor community as opportunities to meet with, and have private access to, the executive teams of major corporations and usually within a germane setting, such as Hawaii, or California, or Florida, or the Bahamas, or Mexico or…you get the idea. Not all of these...
read moreExecutive compensation caps
Happy Wednesday everyone! First of all, thanks for reading. I hope that you are still enjoying the blog. Today’s post is about President Barack Obama’s plan to cap executive pay at firms that receive Federal government assistance under the TARP. From the beginning of the blog I have been saying that executive compensation was one of the things that needed to change if we, as a Nation, are to avoid another future financial markets calamity. The reason is that financial incentives do work. So how does the Administration’s plan...
read moreNew energy policy
Good afternoon, President Barack Obama spent a goodly portion of his week on energy policy. Details of his proposal are as follows: Obama believes that his plan will create up to 460,000 jobs Over the long-term he hopes to create millions of jobs by investing $150 billion to help private companies further develop clean energy, such as: wind, solar and geothermal He plans on: investing in clean energy; increasing fuel efficiency standards in vehicles; and reducing green house gas emissions (hello Beano!) By 2025, 25% of U.S. energy will come...
read moreReally gross domestic product
Happy Friday everyone! I hope that this post finds each of you well. Today’s message is about the Fourth Quarter U.S. Gross Domestic Product number. In case you had not heard, the economy contracted at an annualized 3.8% rate. However, and this is the BIG however, most economists were expecting the decline to be around 5.5%. Either way, it is a big number. Consider that the economy typically averages growth of between 3-5%. So, effectively, one year’s worth of economic growth has been lopped off of the U.S. economy. Yet, most...
read moreUnderfunded SEC
The head of enforcement at the Securities and Exchange Commission (SEC), Linda Thomsen, testified before Congress today about her group’s handling of the Bernard Madoff Ponzi-scheme scandal. Particularly noteworthy is her having said, “While we appreciate and examine every lead we receive, we simply do not have the resources to fully investigate them all.” I have stated several times that Republicans have had as a goal since the Ronald Reagan era to intentionally underfund the SEC. Why would they do this? The goal is to have...
read moreReader of Wall Street Journal asks…
For today’s post I wanted to copy for you a question asked by a Wall Street Journal reader in their “Journal Community” section. The questioner is named Hector Caaballo and he asks: “I don’t get it. Day to day life has seemed to change little for the average American, but the financial markets are in an upheaval. I hear that ninety percent of homeowners pay their mortgage. And the crisis is due to falling real estate prices and loan defaults. huh? How can ten percent of homeowners spin the economy into such a...
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