Dividend Income Courtesy Of The Federal Reserve
Sometimes the Federal Reserve speaks loud and clear and if you can read between the lines, there may be an area that investors can profit over the next couple of years.
For this investment to work, we need two primary things in our favor. First, the fed must keep interest rates low, which they have already said they would do at least until sometime in 2013. Second, the government must continue to be the backstop or lender of last resort to the mortgage back security market. If these conditions remain in effect, there is a way to earn large annual dividends of more than Read More…
Is The Euro Currency Experiment Over?
One of the looming questions being asked is “what happens when Greece defaults.” Some believe that European policy makers will continue the bail out charade of Greece, but it not longer is a matter of if and when, but how, and maybe more important – What will it look like?
Let’s take a gander at what may seem like a crazy and unbelievable idea, but maybe not out of the question -
First, the obvious occurs, Greece defaults. Ouch! Those that want to minimize the potential damage of a Greek default are most likely underestimating the potential long term effects and structural changes to the European economy. Don’t forget, this is certainly at least one degree larger than Lehman Bros. That was a company, this is a country.
The next order of business is for each country to make an attempt at protecting their respective Read More…
Twisting The Bond Market, Stock Market And Public Market Opinion
More and more people, both within and outside of traditional financial circles are beginning to catch on to the obvious shenanigans and charades taking place. Here In the United States and across the pond in Europe, they are constantly trying to lead us to the promise land and make believe there are solutions to the no growth, too much debt and not enough money scenario we find ourselves in. The term “kick the can down the road” has been exhausted – We are NOW officially down the road.
Most recently, our own Federal Reserve has announced their latest (and maybe last) Three Card Monte money trick, what they call “The Twist.”
The Fed’s new efforts, “Operation Twist,” may lead to slightly higher Read More…
Stock Market Trader tells BBC: “I Dream About An Economic Recession”
There are many interviews each and every day on all the financial news and pseudo programs. Sometimes there are stand outs that tend to go viral, this may be one of those times.
We have an unknown, never seen before guy talking about the probability of an ongoing global recession and market declines that will most likely come next. He discusses the opportunity that will follow a stock market crash, and dreams about the fortune he can make from times like these.
While this isn’t necessarily a revelation, and there have been astute analysts for several years predicting the oncoming train wreck we are about to see, however not many are so blunt and can leave the commentators conducting the interview speechless. It’s both sad in terms of reality of the situation, and the naivety on the part of the majority of the public within the developed world not to see what has been occurring right before our eyes.
The sad reality is that Read More…
Separate Your Investments And Your Fruit
All investors who pay any attention to the financial media should be wary of a common discussion that can be hazardous to your wealth. There are frequent guest on the television shows and articles written about the issue of low interest rates and how investors can help themselves to a better return.
The federal reserve has pushed interest rates to all time lows in an effort to stimulate the housing market, the economy and allow the banks access to cheap capital to lend to the American people. This hasn’t worked as advertised, and has even produced some “UN-intended” consequences, especially for those who need a return on their savings for everyday spending and living expenses.
The frequent comments are about how certain high quality stocks have better dividends or yields than treasury bonds. The main problem with this type of advice is Read More…
In Search For The Perfect Excuse
There are various interpretations of responsibility and leadership. As it relates to the current economic overhang that has so many people concerned, confused and in search for a solution, we think until there is a simple acknowledgement of ownership – no solution will be agreed upon or realized.
Pointing to the recent shenanigans in Washington as the reason for our S&P Debt downgrade is at the very least, disingenuous. It’s like a child who has a bank account for the first time, they get a check book, and think as long as there are checks left, they can spend whatever they want. All of a sudden the day arrives where the bank sends an overdraft notice and the parents blame the child for over spending. If nobody ever explained to the child how money and banking works, who’s fault was it? Shouldn’t the parents take some responsibility? Placing blame is always the path of least resistance, but in the long term never works. Why would anyone blame Standard & Poors for our downgrade, they didn’t spend the money, we did.
It’s very reminiscent of some recent and developing events and circumstances. Let’s go around the globe and take a look. Start with the horrific tsunami that hit Japan in March 2011. As it relates to the stock market and the media – we find Read More…
A Bath, Bank and a Fairy Tale
Not sure if he is the “best” investor of all time, but he certainly earned respect by making some great investments at opportune times and amassing an enormous fortune for himself and his shareholders, if they got in early, of course. Nobody can take that away, and we’re not trying to.
However, this Bank of America thing just doesn’t pass the smell test.
The story was told today on Tout TV (aka: CNBC) that Mr. Buffett while taking a bath (more information than we needed) Wednesday morning decided it would be a good idea to invest in Bank of America. He didn’t know the CEO Brian Moynihan and therefore asked his assistant to find the number and get him on the phone. They spoke and Mr. Buffett offered an unsolicited investment to take preferred stock in Bank of America that would pay him a 6% annual return. This investment also comes with warrants to purchase about 700 million shares in the bank within a 10 year period of time. If exercised this would equate to about 7% of the company. Mr. Moynihan called an emergency board meeting and Read More…
Top 5 Ways To Determine If Your Financial Advisor Is An Idiot
One of the most frustrating things about the financial services industry is, well – the industry itself. When there’s money involved, ultimately all hell breaks lose and as a result, the business attracts everything from the smartest minds in the world to the most unscrupulous of characters. For our purposed here today, we will focus someplace in between.
One of the largest segments of the business is the “Financial Advisor” which comes in a variety of flavors. They can be found anywhere from the BIG banks or wire houses like Bank of America / Merrill Lynch, Morgan Stanley, UBS to regional firms like Raymond James, Morgan Keegan or Oppenheimer& Co. There are corner store set ups like Edward Jones and discount firms like Schwab, Fidelity or Scott Trade. The list is endless, you can even get financial advice from your CPA or life insurance salesman, which in some cases, isn’t any better than your next door neighbor. The bottom line is not to focus on the firm that has a big marketing budget, fancy logo and shiny computer system, but to zero in on Read More…
