ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION
August 15, 2018 | Corporate Accountability Coming Back in Vogue
We have been working on this important topic for our upcoming month end client letter, and yesterday Senator Elizabeth Warren threw down the gantlet in a Wall Street Journal op-ed proposing an Accountable Capitalism Act requiring corporations with $1 billion+ in annual revenue to operate under a federal charter where their directors must consider the interests of […]
August 14, 2018 | GMOs, Glyphosate & Gut Health
So much to understand and improve in this area–but the upside of doing so is enormous. Zach Bush, MD is a triple board certified physician specializing in Internal Medicine, Endocrinology and Metabolism, as well as in Hospice and Palliative care. The director of M Clinic in Virginia, Dr. Bush has published peer-reviewed articles and book […]
August 13, 2018 | Emerging Market Defaults Loom on Slumping Currencies
As the US, European and UK central banks drenched the world in dollar, euro and pound QE liquidity 2010 to 2016, developed market interest rates fathomed record lows and their currencies weakened relative to many emerging market currencies. In response, emerging market borrowers reached for lower interests rates with foreign denominated loans (primarily dollars). Today, […]
August 8, 2018 | Concentrated Risks Glossed Over by Marketing Wrappers
The first exchange-traded-fund (ETF) was launched in 1993 as a low cost, passive way to enter and exit exposure to the top 500 US companies by market cap (the S&P 500) without the work and cost of buying and selling 500 shares separately. At inception, the idea was brilliantly simple, and the investment sales world […]
August 3, 2018 | Increasing Government Debt to Enable Share Buybacks is Dumb, it Should be Illegal
Another new study confirms what has been abundantly clear for years now: stock price manipulation via rampant share buybacks is weakening worker compensation, capital investment, innovation, productivity, corporate balance sheets, and future economic resilience. See The Atlantic’s Are buybacks starving the economy? for a worthwhile update: In recent years, with corporate profits high, American firms have bought […]
August 2, 2018 | Worthwhile read: US Stocks are in a Bubble
A useful piece with some illuminating charts from Jesse Colombo this week, read US stocks are in a bubble. This comment on passive investing is the critical point that long-always advocates recklessly ignore: The proponents of passive investing point out that the passive approach is much cheaper than the active approach in terms of management fees, […]
August 1, 2018 | Must Watch Doc: What the Health
With record government debt and expenses compounding out of control in most countries, higher consumption and corporate taxes, as well as spending cuts are necessary for financial viability. More efficient policy and operations around food and energy are the most obvious areas to focus. To eliminate unnecessary (and unaffordable) costs while increasing productivity and quality […]
July 27, 2018 | Over-Housed Boomers Looking to Downsize is a Secular Shift
Lower shelter costs, along with less consumption spending of all kinds, are necessary pillars to restoring financial viability for households in the post-debt-bubble world. As credit levels recede through a much needed secular contraction, home prices will have to realign with more historically normal income and saving rates. In the end this will be a […]
July 26, 2018 | More Anti-Trust Prosecutions Coming
The most stable systems have strong counter-veiling forces to help maintain balance rather than allowing any one party or interest to weaken the whole with domination and control. Last week Google received a record 4.3 billion-euro ($5 billion) antitrust fine from the European Union and was ordered to change the way it ties search and […]
July 24, 2018 | Ten Years After the Last Financial Crisis
Anat Admati’s presentation here is a good review of where we are 10 years after the last financial crisis. The bottom line: in the words of JP Morgan CEO, Jamie Dimon “Financial crisis is something that happens every 5, 7 or 10 years.” It’s now been 10, we should be expecting the next. Alas, few are […]
July 19, 2018 | ECRI: Stealth Slowdown Unfolding Well Before Trade Tariffs
While stock bulls talk up a “strengthening” economy, consumer spending growth (which drives 70% of GDP in America) has fallen to a 4 ¼-year low even before rising trade tariffs are noted in backward looking data. The below chart from ECRI shows that the income shortfall relative to spending is increasing, and since 2015 the […]
July 18, 2018 | Must read: Hoisington Q2 2018 Review and Outlook
Hoisington Management’s latest Q2 2018 Review and Outlook is now available here. For those trying to anticipate cyclical and secular forces moving the world economy and markets today, this is a must read. Succinct prose with 6 charts that speak volumes. In a massively indebted world, largely in US dollars, understanding dollar liquidity is critical.
July 17, 2018 | Biodegradable Packaging is Next Boom Area
Some 600 billion one use cups end up in landfills and water systems each year. Most either won’t break down, or are toxic when they do. At the current rate of creation, there will eventually be no room left on earth for anything but stagnant waste. The business opportunity in creating and using non-polluting biodegradable […]
July 13, 2018 | The Wrong Way to Use an Economic Expansion
Thanks to liquidity-pumping central banks, the globe-driving US economy is now in the 109th month of expansion without recession–second in history only to the unprecedented 120 months of expansion between March 1991 and March 2001. Surely after this unbelievable period of emergency support, and unusual luck, the world has saved up enough rainy day funds […]
July 12, 2018 | Fines For Offending Mega-Corps: Cost of Doing Business, Zero Deterrence
This week Facebook was fined £500,000 by UK regulators for its part in the Cambridge Analytica scandal and failing to protect its users’ information. This was the maximum fine possible under the Data Protection Act of 1998. Meanwhile, in the first quarter of 2018, Facebook took in £500,000 in revenue every five and a half minutes. […]
July 11, 2018 | Brokers Still Selling Client Orders for Kickbacks and Exchanges Still ‘Selling the Flow’
Different sector than social media, but security exchanges (that used to be run like public utilities) have adopted a similar hi-tech, trust-abusing business model that sells customer information to be abused by third parties at the expense of the customer, and without their understanding or consent. To improve the necessary integrity and stability of public […]
July 10, 2018 | Physical Abuse Inherent in Food Products Fed to Children
This week brought news that the American delegation at the spring United Nations-affiliated World Health Assembly in Geneva, at the behest of big food lobby in attendance, attempted to block a resolution calling on governments to “protect, promote and support breast-feeding” as well as another passage calling on policymakers to restrict the promotion of food products that […]
July 9, 2018 | Nightmare on Main Street: Central Banks Reaching for Yield Too
When willfully blind, over-confident central bankers run monetary policy to serve their greed-engrossed-bank owners at all costs, prudence is extinguished and madness ensues. We are there and we are all vulnerable in the fallout. While central banks, like pensions, have historically and wisely focused on capital preservation above all other goals, today both are running […]
July 6, 2018 | Rising Waters: The Mounting Costs of Bad Choices and Inaction
Climate deniers and fossil fuel advocates are working hard to ban words and education on the science of our planet warming, but rising waters are showing us all who is actually in charge here. Only smarter technology, clean energy and dramatic changes in human consumption can help turn this tide or not. The longer the status […]
July 5, 2018 | Chinese Think Tank Warns of ‘Financial Panic’
Think tank to Chinese government: don’t just stand there, get a plan! Turns out that ‘add even more debt and stir’, has been the only plan everywhere for the last decade. A leaked report from a Chinese government-backed think tank has warned of a potential “financial panic” in the world’s second-largest economy, a sign that some members of […]
July 4, 2018 | Property Markets Sliding Together in 2018
Torrents of foreign capital seeking land banks in the west, misguided government policies that encourage real estate speculation, the lowest interest rates in centuries, excessive credit abuse enabled by central banks, debt securitization and yield-desperate, price indiscriminate funds buying everything in sight–all these factors served to temporarily hyper-inflate realty and security prices into 2017. Now […]
July 3, 2018 | Is the Oil Industry Canada’s ‘Deep State?
Justin Trudeau and Canada’s political elite is fighting for the Tar Sands and oil industry’s interests, even if it means Canada misses all of its climate targets. Kevin Taft, ex-Liberal Party politician and author of ‘Oil’s Deep State’. Here is a direct video link. For some more discussion on why the Trudeau government may have agreed […]
July 2, 2018 | China’s Heavily Levered Property Markets Headed South
Different side of the world, but very familiar themes here: real estate developers borrowed heavily in greenbacks and now face leaping service costs and defaults as the Yuan weakens against the US dollar. Chinese households have doubled their mortgage debt in just the last 4 years (to $3.5 trillion outstanding at Q1 end). Who would’ve […]
June 30, 2018 | Out of Sight, Out of Mind has Enabled Plastic Disaster
Being able to send trillions of tons of plastic waste out of sight, by shipping it to landfills in poorer countries, is an unsustainable disaster for our global environment. Meanwhile companies producing the waste are extracting their profits free of any accountability for the massive public costs being inflicted. It’s good that China is no […]
June 29, 2018 | Emerging Market Weakness Spreading, not ‘Contained’
The Chinese stock market entered a bear market this week (-20% since January) and the yuan is down 5.5% versus the greenback since February. A burgeoning trade war with the US is adding pressure, but the story here is not just about China. It’s about slowing global cash flows and strain building in leveraged emerging […]