Pretend, for a minute, that you’re a money manager in today’s manipulated world. You understand that most of what’s happening is the result of governments and central banks forcing down interest rates and pumping up asset prices. You don’t trust this process but since “the markets are recovering” you’ve felt compelled to play along, putting…
Last week I penned that the BLS Jobs Situation Was Strong in November 2014 for the Establishment Portion But the Household Portion Shows Almost No Jobs Growth. The establishment portion showed job gains of 321,000 whilst the household portion showed job gains of 4,000. One question is whether this real discrepancy throws some cold water on the…
After years of exposing, month after month, the truth about the U.S. labor market – its conversion into a part-time (in 2010!), low-paying job market where Millennials refuse to work (as the job market reality is gruesome so instead they opt to load up on record amount of student loans) and where older Americans, instead of enjoying retirement are…
Prospect Capital Corporation (PSEC) got off to a rough start this month with a dividend cut. Prospect Capital cut its dividend to 8.33 cents per month from 11.1 cents. But even after the reduction, PSEC sports a dividend yield of 12.1%. Not bad. A 12% dividend is nothing to take lightly. Given that U.S. stocks are priced to…
Imagine walking into a store and the shop assistant walks over and says, “Hi Simona, here’s a cappuccino for you. It’s just the way you like it, with extra foam.” She consults her smart phone for a second and then says: “I know you put on two extra kilos over the holidays, but we have some…
The Financial Times ran a very interesting article last week called “China: Turning away from the dollar”. It got a lot of attention, at least among China analysts, and I was asked several times by friends and clients for my response. The authors, James Kynge and Josh Noble, begin their article by noting that we are going through significant…
At G20 last year, all governments agreed to report everyone everywhere to their host countries for tax purposes. The hunt for taxes is destroying the world economy at a staggering rapid pace and this is far worse than even I had anticipated when we first forecast BIG BANG would hit 2015.75 back in 1985….
On December 11, 2014, the U.S. House passed a bill repealing the Dodd-Frank requirement that risky derivatives be pushed into big-bank subsidiaries, leaving our deposits and pensions exposed to massive derivatives losses. The bill was vigorously challenged by Senator Elizabeth Warren; but the tide turned when Jamie Dimon, CEO of JPMorganChase, stepped into the ring….
In late 2006, default rates on lower-rate subprime private MBS began to rise considerably. Though not a very transparent market to the mainstream media-watching world, bankers knew trouble was brewing as this had not happened before in such a benign house price decline. Banks, knowing what they had on their books, what they had sold to others,…
Stocks have done exceptionally well over the last few years. But the scars of the 2008 crash are still making many investors question their long-held beliefs, including the virtues of ‘buy & hold’ investing. This shows up in weak money flows into equity mutual funds, which have yet to fully reverse despite the market’s strong…
