Decline of the dollar
By John Schroy, on June 20th, 2007 |

Since 2003, the US dollar has fallen almost 50% against the Brazilian Real. What caused this to happen and what does it mean for the future of the dollar?
The reason for the strong real is the excess of Brazilian exports over imports. Government policy resulting in extremely high internal interest rates attracts holders of these dollar reserves to invest in short-term Brazilian debt.
However, not all is rosy in Brazil.
Buybacks rule
By John Schroy, on June 10th, 2007 |

According to Federal Reserve flow of funds accounts, a large portion of today’s stock buybacks are financed by borrowing heavily and dipping into depreciation reserves. Even the slowest of minds should be able to grasp the fact that borrowing to finance buybacks results in interest costs that will reduce, not improve future profits.
Corporate executives have thrown caution to the wind, touting buybacks as ‘good for investors’ without regard for the truth or laws against securities fraud.
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