On December 23, 1913, one hundred years ago yesterday, Woodrow Wilson signed into law the Federal Reserve Act, which had been passed in the House on September 18th the same year by a vote of 287 - 85 and which had been passed in the Senate on December 18th by a vote of 54 - 34.
The creation of a central bank in the US meant...
Tuesday, December 24, 2013
Hundredth Anniversary of the Federal Reserve: We "get by" IN SPITE
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Friday, December 06, 2013
Back from the New Telecosm Summit, 2013
We recently attended the New Telecosm Summit, which was the latest in a series of Telecosm Conferences inspired by the vision set forth by author and thinker George Gilder. This year's event took place on December 3rd and 4th in New York City.
The concept of the "telecosm" refers broadly to the world unleashed by abundant information-processing...
Tuesday, October 15, 2013
"The crisis facing fixed-income investors"
Here's a link to an important article entitled "Bonds' future fortunes are flagging," by Simon A. Lack, who is also the author of a recently-published book entitled Bonds Are Not Forever: The Crisis Facing Fixed Income Investors.
In the article, the author points out the many daunting problems facing bond investors...
Monday, September 30, 2013
The importance of embracing risk
Economist and technology analyst Bret Swanson published an important essay earlier this year entitled "Long Live the Risk-Takers." It examines the vitally important subject of "risk," particularly from the economic perspective.
While acknowledging that seeking to identify and prevent (or at least avoid) future problems is...
Friday, September 06, 2013
Don't Get Caught Up in the Fray!
As the calendar turns from summer to autumn the dreaded months of September and October, historically the weakest months for the stock market, are facing investors, there is plenty of outside news to make even the most steely market veterans queasy. On the minds of most citizens in the United States, let alone investors, is the...
Thursday, August 01, 2013
The boy who cried wolf: Economy growing in spite of monetary policy, not because of it
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Wednesday, July 17, 2013
Federal spending drops sharply in the US, leading to a budget surplus for June 2013
Recently, economist Scott Grannis published a post on his Calafia Beach Pundit blog entitled "Budget outlook improves dramatically." In his post, he notes that:
especially in the last 12 months, there has been a dramatic improvement in the federal budget outlook. Revenues have grown at double-digit...
Wednesday, July 17, 2013
Investment Climate July 2013: Have Interest Rates Bottomed?
We recently published our quarterly Investment Climate for the end of June, 2013. It is entitled "Have Interest Rates Bottomed...
Friday, June 21, 2013
"A high-entropy, bull-in-the-china-shop distortion"
Here's a link to a recent article by John Tamny of Forbes entitled "All eyes are on the Federal Reserve, and that's the problem." We believe it should be required reading for anyone who either chooses to invest in market securities or is in any way impacted by the monetary policy of the United States central bank (which is to say,...
Tuesday, June 04, 2013
Municipal bonds
In the classic 1988 film Bull Durham, the frustrated manager throws a staged tirade in order to turn his team around, a tirade which includes the immortal lines:
"This is a simple game. You throw the ball. You hit the ball. You catch the ball."
In spite of all the mystique that for some reason surrounds the world...
Wednesday, May 22, 2013
Rip Van Winkle, revisited
Here's a link to recent commentary entitled "Still Bullish," from one of the most insightful economists we know, Brian Wesbury.
In it, he proposes a mental exercise, asking readers to imagine that they had gone to sleep on October 09, 2007 (when the major US stock indexes were making record highs, but just before they...
Friday, May 17, 2013
Crossing the chasm to IPO becomes even more difficult
Here is a link to the website of Renaissance Capital of Greenwich, Connecticut, which shows U.S. IPO volume by capital raised for the past decade, beginning in 2003 and showing each year up through the year-to-date figures for 2013. The graph below shows the status as of the publication of this post, May 16, 2013:
Clearly,...
Tuesday, April 30, 2013
Unstated assumptions about government stimulus
Here's a link to a Yahoo video of former Wall Street analyst Henry Blodget declaring that "The Economic Argument is Over -- and Paul Krugman Won" in which Mr. Blodget asserts that government stimulus is the way to help economies grow, and that anyone who argues to the contrary has now been silenced by a recently-discovered spreadsheet error.
The...
Monday, April 22, 2013
The gold sell-off
In our previous post discussing Cyprus, we noted that governments in general have three choices when they run up debts beyond what their income can support.
One option, of course, is to increase their income. Governments can try to raise income by raising tax rates or, a far better option, by encouraging...
