Peoples’ enthusiasm is understandable: From 1965 to 2017, Buffett’s Berkshire share achieved an annual average return of 20.9 percent (after tax), while the S&P 500 returned only 9.9 percent (before taxes). Had you invested in Berkshire in 1965, today you would be pleased to see a total return of 2,404,784 percent: an investment of USD 1,000 turned into more than USD 24 million (USD 24,048,480, to be exact). Read More
None of this means stocks were at a bottom Wednesday. At this point, we may need the classic “big puke moment” of capitulation to wipe out the remaining weak hands, restore enough fear and respect for the market and clear the air. No one knows when that will happen. But watch for a big whoosh down at an open, followed by a quick and sharp reversal, and some gains.
For context, consider the last three bear markets. The most recent one, which lasted for 517 days from October 2007 to March 2009, saw a whopping 57% plunge in the S&P 500. During the 929-day bear market from March 2000 to October 2002, the benchmark lost 49%. And during the relatively brief, 101-day period from August to December 1987, the index tumbled 34%.
The drop below the support at $1220 in July was particularly damaging and led to additional liquidation and a capitulation spike down to $1160, despite an overwhelmingly bullish technical picture. The speculative positioning of Comex traders (COT) is usually a reliable contrarian indicator at turning points, and in fact the COT readings are at an extreme bullish level not seen since the beginning of gold’s last secular bull market in 2001. When it looks too good to be true, it usually is. Read More
In the 9th largest economy in the world, the financial markets are crashing, and in the 21st largest economy in the world the central bank just raised interest rates to 65 percent to support a currency that is completely imploding. Whilethe mainstream media in the United States continues to be obsessed with all things Kavanaugh, an international financial crisis threatens to spiral out of control. Stock prices are falling and currencies are collapsing all over the planet, but because the U.S. has been largely unaffected so far the mainstream media is mostly choosing to ignore what is happening. But the truth is that this is serious. The financial crisis in Italy threatens to literally tear the EU apart, and South America has become an economic horror show. Read More
They’ll spend tens of thousands on a down payment. Go in debt to the order of hundreds of thousands. Or stay in their sinking real estate while shelling out thousands every month that they could be saving. But they’ll never give my question any serious brainpower and at least think through the consequences before committing themselves to eternal debt peonage.
On Tuesday, March 10, Vikram Pandit the CEO of Citibank, said that his bank has been profitable the first two months of 2009 and was currently enjoying its best quarterly performance since 2007. On March 12, Ken Lewis, CEO of Bank of America, declared that bank had also been profitable in January and February, that he didn't foresee the bank needing further government funds, and that he expected to "see $50 billion in 2009 pre-tax revenue". The announcements caused multi-day rallies with double-digit percentage gains for a number of stocks both in and outside of the banking industry.
A bond is a promise to pay money, right? And what is money? What is money? Years ago when QE just started, there was a letter to the editor of The Financial Times. And the author of this letter said: At long last I have now understood the meaning of the term “quantitative easing.” I now understand that. What I no longer understand is the meaning of the word “money.”
Historically, municipal debt predates corporate debt by several centuries—the early Renaissance Italian city-states borrowed money from major banking families. Borrowing by American cities dates to the nineteenth century, and records of U.S. municipal bonds indicate use around the early 1800s. Officially the first recorded municipal bond was a general obligation bond issued by the City of New York for a canal in 1812. During the 1840s, many U.S. cities were in debt, and by 1843 cities had roughly $25 million in outstanding debt. In the ensuing decades, rapid urban development demonstrated a correspondingly explosive growth in municipal debt. The debt was used to finance both urban improvements and a growing system of free public education.
In 1970, the U.S. fell into recession, and for more than a decade, the economy and the stock market languished. Productivity growth slowed to 1.8% per year, and inflation reached into the double-digits by the end of the decade. In this environment, the stock market was a poor investment. The stock market anticipated the 1970 recession somewhat, and, after peaking in December 1968, experienced a long secular decline. The inflation-adjusted S&P 500 lost 55% of its value before hitting an interim low in December 1974, and another 6% by the time it finally reached a bottom in July 1982. Over this approximately 14-year “bear market,” the inflation-adjusted per capita net worth of households rose a meager 0.2% per year.
RATE AND REVIEW this podcasthttps://www.facebook.com/PeterSchiff/reviews/What About Employers' Day?Labor Day is coming up on Monday it it annoys me that we just have a Labor Day and we don't have an Entrepreneur Day. We don't have a day to celebrate the employer. Why is that? The entrepreneurs are the unsung heroes of the American economy. I'm ...…
Mr. Grant’s television appearances include “60 Minutes,” “The Charlie Rose Show,” “CBS Evening News,” and a 10-year stint on “Wall Street Week”. His journalism has appeared in a variety of periodicals, including the Financial Times, The Wall Street Journal and Foreign Affairs. He contributed an essay to the Sixth Edition of Graham and Dodd’s Security Analysis (McGraw-Hill, 2009).