learn

Saving is not the Key to Financial Success

You’ve probably heard it a million times from financial “experts” – the key to financial success is saving.  The idea is that if we save more now then we’ll have more to spend later.  And while that’s true at the individual level it’s actually disastrous advice in the aggregate.   Saving isn’t…

Read More→

macro1

Jack Bogle & Cliff Asness on the Markets

If you missed the Jack Bogle and Cliff Asness interview on Bloomberg TV just now then you missed a pretty great discussion.  Bogle and Asness are, arguably, the two most important people in the investment business today.  Bogle is the founder of Vanguard and the leading voice in the “passive…

Read More→

crash-ahead

Would a Repeat of the 1987 Crash Really Be That Bad?

“The intelligent investor realizes that stocks become more risky, not less, as their prices rise, and less risky, not more, as their prices fall.” – Jason Zweig

bank

The Full Monty on Naked Short Selling

JP Koning has written an interesting post that depicts banks as engaging in “naked short selling” when they simultaneously create new loan assets and new deposit liabilities. For example, he compares the idea of systemic deposit creation with the case of selling Microsoft stock without owning the stock (shorting the stock) and also without borrowing the stock (naked shorting the stock).

think

Three Things I Think I Think

Some weekend thoughts….

z14

Some Important Z.1 Takeaways

Just some brief thoughts here following the release of yesterday’s Z.1 Flow of Funds:

gold-bars-india

Why is the Price of Gold Falling?

A reader writes in asking about the price of gold and why it keeps falling despite surging US government debt.  The thinking here is that gold prices will hedge against a collapse in the US Dollar when the government defaults or “prints money” to the point where it causes hyperinflation…

Read More→

risk121

What’s the Safest Investment Strategy?

By Seth Masters and John McLaughlin, AllianceBernstein Many investors with little appetite for risk think cash is the safest asset class. After all, if you have no investments, you have no investment risk. That’s true enough, but it’s reassuring only if you ignore inflation and taxes.  And of course, most…

Read More→

Fail_WP

Why Can’t Academic Economists Understand Endogenous Money?

“The process by which banks create money is so simple that the mind is repelled.” – JK Galbraith

flation

Global Inflation Continues to Fall

This strange new world of disinflation continues.  Yesterday’s CPI reading in the USA came in at 1.7% which was down from 2%.  Core inflation (minus food and energy) was also 1.7%.  Most interestingly, this isn’t just a conspiracy by the BLS to manipulate the way inflation is gauged.  We know…

Read More→

learn

On Being Right for the Wrong Reasons

Bill Fleckenstein was ripped into by a CNBC commentator this morning for “being wrong” about monetary policy.  That is, Fleckenstein has been very vocally against the Fed’s QE policy citing the risk of a currency collapse and a bond market debacle.  But the CNBC commentator is a little unfair with Fleckenstein….

Read More→

buybacks

The Buyback Boom is Slowing

One of the primary drivers of the ever higher stock market has been the boom in stock buybacks.  A recent report from FactSet shows that Q2 buybacks are down -1.1% on a year over year basis and down -23% on a quarter-over-quarter basis: “Quarterly Buybacks Declined Year-over-Year: Dollar-value share repurchases…

Read More→

think

Peter Thiel’s Thoughts on Capitalism, Macro and Entrepreneurship

Peter Thiel has been in the media quite a bit in recent days following the release of his new book Zero to One.  I haven’t read the book yet, but I do have some brief thoughts so far based on some media interviews I’ve heard: Thiel takes a rather alternative…

Read More→

myth

William Vickrey’s 15 Economic Myths Debunked

This is an oldie but a goodie.  William Vickrey was a Canadian economist and Nobel Laureate.   He was well known for being critical of most things out of the Chicago School of Economics.  This piece on 15 economic fallacies has been largely ignored, but the lessons are important and…

Read More→

rear-view-mirror

Be Careful Relying on Historical Market Returns

If you read just about any document published by a Wall Street firm you’ll inevitably run across some form of this statement: “Past performance is not indicative of future returns” We all seem to implicitly know that the future will not necessarily look like the past.  But there is, arguably,…

Read More→