There are a fair number of truths in this story. For me it’s the lack of bank mergers that are an awaking. The benefit to the society, reminds us all that banks are a service to the rest of society, not an economic engine in and of itself. Why supports again my frustration at the size and outlandish activities in the name of bonuses, todays bankers consider a right and just reward.
Hardheaded Socialism Makes Canada Richer Than U.S. – Bloomberg.
Recent financial market trends support my belief that the engine for the global economy has moved to Asia. The recent article in the New York Times Asia Leads the Global End to Cheap Money, seems to support my view as well. The implications for investors feel straightforward. Globally, there will be relatively less money Read more
Protecting Consumers Will Undermine Capitalism: Susan Antilla – Bloomberg.com.
There are many points in Susan Antilla’s article that I agree with. Namely that a consumer financial protection agency is needed. However, one key argument seems understated. Read more
Fed Pledges to Keep Rates Low for ‘Extended Period’ Update5 – Bloomberg.com.
Thus, we can expect relatively low interest rates, until the rest of the world causes inflation in the US. The most likely scenario to cause inflation for the US—growth in the rest of the world out pacing the United States. There are two conditions that Read more
Everyone has reacted to the recession. One implication for the food industry is that many brands’ value proposition—the reason consumers feel good about spending their money—have been permanently altered. Adweek published a story (A New World for Grocery Shoppers) describing many recession influenced consumer behaviors, however, I think the story underplays the permanence of the consumers’ change.
Most analyses focuses on how behaviors have changed and presume that when the economy recovers, behavior will simply revert, rather than asking the critical question, what lessons have people learned during the difficult times. As I reflect on the lessons discussed with friends, one core lessons is the false promise of debt. Read more
Geithner says Obama will bring down deficits – Yahoo Finance.
The article above is an example of politicians setting expectations, and creating an environment with the opportunity to fail–that is win the next election. However, the Obama Administration has been long short on explaining how they will cut the deficit. One report suggested their sights are set on 3% of GDP, from the latest estimates of 12.5% of GDP. Good Luck. Read more
Op-Ed Columnist – Learning How to Think – NYTimes.com.
I saw this article a few days ago and concluded: close but no cigar. Greater accountability has become the next best buzz word–greater transparency is of course king right now. But I caution, greater accountability does not make anyone better. Being accountable does not prevent mistakes, carelessness, accidents, or any of the other unintended consequences put in the negative outcome category. And what should we do with the adviser who gets a forecast wrong Read more
What a crock of manure this article (Dealbook – The Case for Paying the A.I.G. Bonuses – NYTimes.com) presents. The sanctity of contracts. Let us remember that AIG went bankrupt for all intent and purposes. Employment contracts then and there should have been voided. Just because the government attempted to manage perception and a sense of solvency to the financial system is no excuse for AIG employees–who ran the ship into the ground–to profit. Read more
Some things in life are quite simple. Like the childhood analogy that illustrates deductive reasoning, “if it walks like a duck and quacks like a duck, it must be a duck.” Money market mutual funds have guaranteed the value of deposits, paid interest, and allowed withdrawals through checks. Acting like deposit accounts at banks, but avoiding the regulation, and insurance used to stabilize runs on banks. A great deal if your the manager. But what acts like a bank should be a bank. Read more