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Subject: risk

Risk concerns the expected value of one or more results of one or more future events. Technically, the value of those results may be positive or negative. However, general usage tends focus only on potential harm that may arise from a future event, which may accrue either from incurring a cost (“downside risk”) or by failing to attain some benefit (“upside risk”). (Wikipedia Feb 2010)

Phony financial reform

Dodd-Frank won’t make better markets

Financial markets can be extremely complex, with many areas that can fail and break.

Unfortunately, instead of a ‘game-changing’ confidence-inspiring reform, the Obama administration presented the United States with the Dodd-Frank Act — a legislative miscarriage that has the potential to hold back recovery and impair the position of New York as a world financial center for decades — unless repealed or drastically amended.

This is a 'game-changer'

Economic recovery may wait until 2016

Economic systems and institutions tend to gradually corrode and become increasingly inefficient and unstable

The current economic crisis, which started with the market crash of 2008, is a ‘game-changer’ that requires effective leadership with a firm grasp of economic reality and a willingness to introduce sensible bipartisan reforms in many areas of financial markets.

Unfortunately, these conditions are unlikely to be met before 2016. In the meantime, history suggests that there are likely to be many false rallies and dashed hopes before true recovery begins.

The coming storm:

Will gold protect you against inflation?

Will Obama's exit crash gold?

In 35 of the last 50 years, gold prices have fallen relative to inflation. On four occasions, gold has fallen 50% or more. Gold does not track inflation, but rather anticipation of hyper-inflation or war.

In 2010, gold prices were soaring, reflecting fear of inflation from fiscal excesses of the Obama administration and continuation of war in Iraq and Afghanistan. If Obama is a one-termer, gold prices could fall.

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Featured articles on inside pages

Stock buybacks

Stock buybacks, refusing to die, live on

In Q1 2009, stock buybacks came back, driving up equity prices and sparking a rally by dominating a thin market. These equity repurchases were financed from depreciation and bond issues. More ...

Securities Analysis

Crowd sourcing investment research

Free, easily available investment information is largely unexploited. This is because there is too much of it. Information, to be useful, must be processed. This processing has a time cost. This article describes how new technology allows securities research to evolve beyond the industrial techniques of the 20th century.
More ...

US Politics

President Obama and the Lincoln Bible

The Crash of 2008 put Barack Obama in the Oval Office and was the culmination of two secular financial trends. Americans now have an untested, inexperienced leader, with strange radical friends and a leftist deficit spending agenda. More ...

US equities

Households save more and invest in equities

Government economic stimulus programs that have sent money directly to US households have resulted in more saving and less spending. Low interest rates have encouraged individuals to move from debt instruments into equities. More ...

US Bonds

The collapse of the dollar and US bonds?

The extreme spending of the Obama government, combined with irresponsible bank lending policies promoted by Barney Frank and Chris Dodd, portend rising interest rates, the collapse of the bond market, and the end of dollar supremacy. More ...

World Economy

What Is ‘International Liquidity’?

It used to be that the term 'international liquidity' meant the relative amount of resources available to a nation's monetary authorities that could be used to settle a balance of payments deficit. In the days of the gold standard, this would mean access to gold that could be used to redeem a nation's currency held by foreigners. More ...

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2010-11-11 14:29