Economics and the Problem with Assumptions

Two of the most destructive forces for the economy are the words “let’s suppose” and the use of the = sign. When we put the two together, they form a combustible combination that gives seemingly well-intentioned and rational investors the power to disintegrate assets at will. This is because investors have a desperate need for…

One Step Forward, Two Steps Back

Last Friday, after the 19th European emergency summit, markets rallied on the idea that the 19th time might be the charm, and Europe might finally be awakening to the gravity of the current situation. Spreads on Spanish and Italian bonds came in handily, and equity markets around the globe rallied furiously after European leaders pulled…

‘Who Could Love Me?’

With Seinfeld on my mind, who could love Coal and Steel stocks right now? From April 2011, as measured by the SPDR S&P Metals & Mining ETF (XME), these stocks plummeted 50% through June 26. Analysts hate the fundamentals as China has stalled with continuing hard landing fears, costs are soaring for coal and steel…

Neutral is a Moving Target

Over the past few weeks the Investment Team has been reviewing our tactics for getting our portfolio back to a neutral stance and explaining them to our clients and other interested parties. However, the way we measure the positioning of our portfolios and define a neutral stance is itself worthy of discussion.

Conflicting Messages

One of the interesting (and frustrating) aspects of the current environment is just how muddled the evidence is right now. While it’s true that there’s always a bullish or bearish case to be made, it’s struck us lately just how far the gulf between the two camps has grown. The independent analysts that we follow,…

Hints for Sunday

No, this post is not about how I desperately want an iPad for Father’s Day, nor about the resurgence of Tiger as he once again claims U.S. Open glory. It is about a small, distant country holding an election that should have no effect on the lives of Americans. Sunday marks the second go-round for…