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Seven states of energy debt 02/08/10   Permlink   Broken Link Government "I've identified seven large US states by four criteria that are sure to cause trouble for Washington's political class at least for the next 3 years, through the 2012 elections. These are states with big populations, very high rates of unemployment, and which have already had to borrow big to pay unemployment claims. In addition, as a kind of Gregor.us kicker, I've thrown in a fourth criteria to identify those states that are large net importers of energy. Because the step change to higher energy prices played, and continues to play, such a large role in the developed world's financial crisis it's instructive to identify those US states that will struggle for years against the rising tide of higher energy costs." What is liquidity? 02/08/10   Permlink   Broken Link Markets "The great Peter Lynch would buy small cap stocks for Magellan, with strict orders on price. Then he would let them sit, while they gained in value on average. Marty Whitman buys in 'safe and cheap' small cap stocks that are illiquid and holds them until their value is recognized. If you have a strong balance sheet or patient investors, take advantage of it, and buy investments that are less liquid, where value may take a while to obtain." Europe risks another depression 02/08/10   Permlink   Broken Link World "The entirely pointless G7 meeting this weekend only served to underline the fact that Europe is again entering a serious economic crisis." Emergency in Nevada 02/08/10   Permlink   Broken Link Government "Nevada's budget is so far out of balance that by one account the state could lay off every worker paid from the general fund and still be $300 million in the red. The economic downturn has hit so hard that prisons may be closed, entire colleges shuttered and thousands left without jobs." A new bubble 02/08/10   Permlink   Broken Link Real Estate "As the U.S. struggles to get out of its housing slump, its neighbor to the north faces a different challenge: Canada's housing recovery has been so rapid that some here are worrying about a bubble." Earl Jones: In Trust 02/06/10   Permlink   Broken Link Crime "Disgraced Montreal financial advisor Earl Jones awaits sentencing for orchestrating a Ponzi scheme that defrauded his investors of $50 million for more than two decades. The fifth estate investigates Jones' life, how he created his scheme and how he was able to get away with fraud for so long." Buffett on farming superhighway 02/06/10   Permlink   Broken Link Buffett "Buffett became the second-richest American by investing in businesses he expects to grow for decades. He's said his $26 billion takeover of railroad Burlington Northern Santa Fe Corp., announced in November, will benefit Berkshire 'over the next century.' CTB, which Berkshire bought in 2002, may produce profits beyond the year 2200, Buffett, 79, said in the video." Japanese liquidation value 02/05/10   Permlink   Broken Link Graham "The fundamental problem in 1932 America, according to Graham, was that investors weren't paying attention to the assets owned by the company, instead focussing exclusively on 'earning power'" Six RRSP pitfalls 02/05/10   Permlink   Broken Link Taxes "It's RRSP season, and you're going to get a lot of advice about how to maximize your contributions, borrowing to contribute, the benefits of contributing, and how to invest inside your registered retirement savings plan. It's all good stuff when the advice comes from the right sources. But I want to talk about the six most common mistakes that people make with their RRSPs. If you avoid these blunders, you'll save tax, create greater retirement savings for yourself, and protect those assets." The 'lost decade' 02/05/10   Permlink   Broken Link Accounting "In sum, there has been no justice, and thus, no lessons learned or changes made. And so naturally, the theme continues to roll on with products like leveraged ETFs - long on advertised promises, and short on explanations of their inherent shortcomings. After these products lose steam, the theme will be recycled with the same conclusion, that the promise of higher returns was just too good to be true." Quants' risk-free ideas sink market 02/05/10   Permlink   Broken Link Markets "To become a potentially market- destroying 'it' group on Wall Street, you need some arrogance, enough brains to justify making huge financial bets, utter cluelessness about lessons learned from finance's booms and busts, and a sincere belief that your unique contributions to Wall Street will mean, ahem, that this time it really is different, so old truths can be ignored." Top 200 Canadian Stocks for 2010 02/02/10   Permlink   Broken Link Stingy Investing "Our five-year results are similarly stellar. If you had bought equal amounts of the All-Star stocks and rolled your capital gains into the new team each subsequent year, you'd be sitting on a 19% average annual return. By way of comparison, that's more than 14 percentage points higher than the annual return of the S&P/TSX Composite, which sported 4.7% annual gains over the same period. It's been quite the ride, and it got me to reminiscing. Several years ago a former professor of mine came to visit with my performance record in hand. 'Did you know that you've outperformed most mutual funds?' he asked. I didn't. But it was a gratifying observation. That memory prompted me to look up Canada's mutual fund performance over the past five years. It turns out that the Top 200 All-Stars beat every single Canadian equity mutual fund over that period. We topped the best by about 3 percentage points a year and the second best by about 7 percentage points a year. The median Canadian equity fund trailed by 14 percentage points a year." Comparing taxes on RRSPs and TFSAs 02/02/10   Permlink   Broken Link Taxes "Comparing marginal effective tax rates across income levels suggests that many Canadians with savings in tax-deferred vehicles, like Registered Retirement Savings Plans, should put more future saving in tax-prepaid savings plans, particularly Tax-Free Savings Accounts." Reported earnings versus "owner earnings" 02/01/10   Permlink   Broken Link Markets "Importantly, the ability of companies to increase book value over time has been a critical determinant of long-term earnings growth, and is likely to be even more important in an economy where debt financing is increasingly constrained. The long-term relationship between earnings and book value is very clear, with actual reported earnings fluctuating reliably around a cyclical norm of about 13.6% of book value. Economic booms can certainly boost return on equity (earnings / book value), and recessions can depress return on equity, but over the full economic cycle, it is dangerous to assume that these temporary departures from the norm will be sustained for long." Garry Kasparov, cyborg 02/01/10   Permlink   Broken Link Behaviour "What I love about Kasparov's algorithm - 'Weak human + machine + better process was superior to a strong computer alone and ... superior to a strong human + machine + inferior process' - is that it suggests serious rewards accrue to those who figure out the best way to use thought-enhancing software. (Or rather, those who figure out a way that's best for them; people always use tools in slightly different, idiosyncratic ways.) The process matters as much as the software itself. How often do you check it? When do you trust the help it's offering, and when do you ignore it?" In defense of home bias 02/01/10   Permlink   Broken Link Behaviour "Ideally, shouldn.t investors seek out the stocks that are likely to perform the best, regardless of where they are located in our world? Ideally, yes. Practically, there are difficulties." Loosen up, tightwads! 02/01/10   Permlink   Broken Link Dividends "Many big companies with the financial wherewithal to pay dividends are being stingy about payouts -- for no good reason. By hoarding cash, the likes of Apple, Google, Cisco, Amazon, eBay, IBM and Amgen are doing their shareholders a disservice -- and it's time for that to change." Efficient markets theory disproved 02/01/10   Permlink   Broken Link Fun "But I'm a connoisseur of economic irrationality. And so I bent down and picked up the paper. On one side, the grim visage of Queen Elizabeth. On the other, Charles Darwin. It was a 10 pound note, worth about $16.25. Just lying on the floor, unmolested by Nobel Prize-winning economists, CEOs of Fortune 500 companies, and financial journalists." Justice, medieval style 02/01/10   Permlink   Broken Link Behaviour "Modern observers have roundly condemned ordeals for being cruel and arbitrary. Ordeals seem to reflect everything that was wrong with the Dark Ages. They're an icon of medieval barbarism and backwardness. But a closer look suggests something very different: The ordeal system worked surprisingly well. It accurately determined who was guilty and who was innocent, sorting genuine criminals from those who had been wrongly accused. Stranger still, the ordeal system suggests that pervasive superstition can be good for society. Medieval legal systems leveraged citizens. superstitious beliefs through ordeals, making it possible to secure criminal justice where it would have otherwise been impossible to do so. Some superstitions, at least, may evolve and persist for a good reason: They help us accomplish goals we couldn't otherwise accomplish, or accomplish them more cheaply." All those little Stuyvesant Towns 02/01/10   Permlink   Broken Link Real Estate "In a letter warning Vantage of impending litigation, Mr. Cuomo's office contended that Vantage, which has bought more than 125 buildings in Queens, Harlem and other areas since 2006, had engaged in a 'systemic pattern of harassment' to generate significant tenant turnover. Increasing turnover was central to Vantage's business strategy, the attorney general's office said, so that it could charge much higher rents after renovating the newly vacant apartments." What Toronto can teach New York and London 02/01/10   Permlink   Broken Link World "This tendency to react to the mere mention of Canada with either yawns or guffaws may be why, as the world struggles to figure out what went wrong in 2007 and 2008, not much international attention is being devoted to figuring out what went right in Canada. Canada is the only G7 country to survive the financial crisis without a state bail-out for its financial sector. Two of the world.s 15 most highly valued financial institutions - a list dominated by China - are Canadian and a recent World Economic Forum report rated the Canadian banking system the world's soundest." A bust with precedent 01/31/10   Permlink   Broken Link Real Estate "The original wave of securitizations took place in the 1920s, when the United States went on the greatest building boom ever. Many investors saw how rapidly real estate prices were rising and wanted in on the action. The builders and brokers were only too happy to oblige." Selling puts naked 01/30/10   Permlink   Broken Link Stocks "Like other Canadian insurers, Manulife was sideswiped during the financial crisis due to its exposure to guaranteed annuity products it had sold to clients across North America and Asia. Most have issued significant amounts of new shares to raise their capital levels since stock markets plunged in the fall of 2008. A major player in the business, Manulife hadn't hedged its segregated funds. That exposure created a capital risk that attracted the attention -- and intervention -- of the Office of the Superintendent of Financial Institutions (OSFI), Canada's financial services regulator." Unlock the housing market 01/30/10   Permlink   Broken Link Real Estate "In the United States, you can find and bid on a house using an iPhone. So why is it that in Canada, much of the information prospective home owners need is a tightly held secret, unlocked only by real estate agents? It's the question at the heart of a dispute between the industry and the Competition Bureau -- the resolution of which could radically change how houses are bought and sold" Paying zero for public services 01/30/10   Permlink   Broken Link Crime "For people to speak up against corruption that has become institutionalized within society, they must know that there are others who are just as fed up and frustrated with the system. Once they realize that they are not alone, they also realize that this battle is not unbeatable. Then, a path opens up - a path that can pave the way for relatively simple ideas like the zero rupee notes to turn into a powerful social statement against petty corruption." $10 an hour with 2 kids? IRS pounces 01/30/10   Permlink   Broken Link Taxes "Rachel Porcaro knows she's hardly rich. When you're a single mom making 10 bucks an hour, you don't need government experts to tell you how broke you are. But that's what happened. The government not only told Porcaro she was poor. They said she was too poor to make it in Seattle." A Greek bailout, and soon? 01/29/10   Permlink   Broken Link World "In Brussels policy circles, the question asked about a bailout of Greece used to be: are European Union governments willing to do this? Now, I can report, the question among top EU officials has changed to: how do we do this?" 5 Stingy Stocks for 2010 01/29/10   Permlink   Broken Link Stingy Investing "It's been a good year for Stingy Stocks. The markets still have a way to go before breaking even from the big bust, but the Stingy Stocks are very close to staging a full recovery thanks to 64.5% gains this year." The restaurant-failure myth 01/27/10   Permlink   Broken Link Stocks "His research - consistent with similar studies - found that about one in four restaurants close or change ownership within their first year of business. Over three years, that number rises to three in five." Why Canada's housing bubble will burst 01/27/10   Permlink   Broken Link Real Estate "Reading the newspapers these days, you have to wonder whether Canada was on another planet when the global credit crisis hit. House prices have actually increased in some provinces and now there is a shortage of houses for sale in southern Ontario. Credit is flowing everywhere. But what few Canadians realize is that the housing market has avoided collapse (prices are down 32 per cent in the U.S.) because the Harper Conservatives directed the CMHC to change the mortgage rules to effectively make the Canadian government the biggest sub-prime lender in the world." Ten stocks I wouldn't touch 01/27/10   Permlink   Broken Link Dorfman "These companies, in my judgment, have some of the worst balance sheets in the U.S. The first five companies mentioned above have negative net worth; that is, their liabilities exceed their assets. Among the 727 U.S. companies with a stock-market value of $3 billion or more, only 17 have that unfortunate distinction. The next five companies have positive net worth (stockholders' equity) but their total debt is at least five times equity, a trait shared by 26 of those 727 companies." Chanticleer's Q4 01/27/10   Permlink   Broken Link Value Investing "Waiting for the undiscovered, undervalued stock to approach intrinsic value can seem like you're a fisherman waiting for the fish to bite. Sometimes you just don't know when or how value will be realized but you suspect that dinner will eventually find its way into your boat." Could California really default? 01/27/10   Permlink   Broken Link Debt "One reason these investors had fled new issues, of course, is because munis are supposed to be conservative investments that offer only a modest return to their holders in exchange for being able to sleep peacefully at night. A loss of confidence in this market doesn't occur quickly but is a long-term process, and politicians can exacerbate the uncertainty when their rhetoric becomes more and more bombastic and their assurances steadily more unrealistic, something that's now becoming commonplace among California officials." Hayek vs. Keynes Rap 01/26/10   Permlink   Broken Link Economics "'Fear the Boom and Bust' a Hayek vs. Keynes Rap Anthem" Leviathan stirs again 01/25/10   Permlink   Broken Link Government "The gap between American public spending and Canada's has tumbled from 15 percentage points in 1992 to just two percentage points today." International housing affordability 01/25/10   Permlink   Broken Link Real Estate "Vancouver remained the least affordable market of any size in the surveyed nations, at 9.3, worsening from 8.4 last year. Toronto joined Vancouver as severely unaffordable, with a Median Multiple of 5.2. However, Barrie, within the Toronto region was moderately unaffordable, at 3.4. Victoria, Abbotsford and Kelowna (all in British Columbia) were also severely unaffordable. Housing affordability continues to deteriorate in Montreal (Median Multiple of 4.9), where an agricultural urban growth boundary has seriously constrained development on the urban fringe. The most affordable major market in Canada was Ottawa, with a Median Multiple of 3.8 (moderately unaffordable). However, housing affordability has deteriorated materially in Ottawa-Gatineau, which was affordable as late as 2007 (Median Multiple of 3.0). The most affordable markets in Canada were Thunder Bay and Windsor (2.2), followed by Moncton (2.5), Saguenay and Saint John (NB) at 3.0." Tell me I'm wrong 01/24/10   Permlink   Broken Link Markets "One thing is indisputable: the rally in financial markets worldwide has outpaced the fundamentals. At the beginning of 2009, most onlookers expected a generally weak economy and were concerned that the behavior of consumers and banks would remain conservative. They were 100% right, and fundamentals are still tenuous. And yet, the rally has exceeded all expectations of which I'm aware." Oil windfalls and living standards 01/24/10   Permlink   Broken Link World "When a country or a community discovers oil, should they rejoice or mourn? Should citizens be thrilled or worried when their governments receive fiscal windfalls? It might seem that the answers to these questions are obvious. How could finding an abundance of natural resources or stumbling on greater resources for the government to spend in the community be anything other than wonderful news? Yet economists are increasingly sceptical and many of them openly entertain the seemingly paradoxical notion that resources and windfalls may actually be bad news. In fact, some go so far as to speak of the "curse of natural resources"" The sweetest usurious bastards 01/24/10   Permlink   Broken Link Management "But it was the nature of the people I met that most stuck in memory. This was a business where if Jesus was alive he would pull down the Temple over them. It was precisely the sort of business the bible rails against. It offended my decency. But the people were lovely. I met management and a store owner - and - frankly they seemed exactly the sort of people you would like to have Friday drinks with. I liked them. This alarmed me of course - because I expected them to be scum. And maybe they are - but I couldn't tell. They were the sweetest usurious bastards (notwithstanding allegations in consumer complaints about the company)." Underwater, but will they leave the pool? 01/24/10   Permlink   Broken Link Real Estate "A provocative paper by Brent White, a law professor at the University of Arizona, makes the case that borrowers are actually suffering from a 'norm asymmetry.' In other words, they think they are obligated to repay their loans even if it is not in their financial interest to do so, while their lenders are free to do whatever maximizes profits. It's as if borrowers are playing in a poker game in which they are the only ones who think bluffing is unethical." Paul Volcker 01/24/10   Permlink   Broken Link Government "In mid 2009, he joked that the only useful recent banking innovation was the invention of the ATM; by late last year, this was no longer presented in jest and he was deploring excesses in risk-taking and bonuses." Better off deadbeat 01/21/10   Permlink   Broken Link Debt "While most Americans with unpaid bills dread the collector's call, Cunningham sees them as lucrative opportunities. Many collection and credit card companies, intentionally or not, violate little-known consumer rights laws, and Cunningham's favorite pastime is catching them doing so and then suing them. In fact, it's a profitable side job." Asset Mixer Update 01/20/10   Permlink   Broken Link Stingy Investing "We've just updated the popular Stingy Investor Asset Mixer and Periodic Table of Annual Returns for Canadians to include both nominal and real (or inflation-adjusted) returns for 2009." 6 impossible things before breakfast 01/20/10   Permlink   Broken Link Montier "James Montier on how the EMH has damaged our industry." Illinois enters a state of insolvency 01/19/10   Permlink   Broken Link Government "The sharp rise in pension payments is the biggest factor pushing Illinois toward what a legislative task force last November called "a 'tipping point' beyond which it will be impossible to reverse the fiscal slide into bankruptcy." The little-noticed report on the state's pension problems warned that "the radical cost-cutting and huge tax increases necessary to pay all the deferred costs from the past would become so large that many businesses and individuals would be driven out of Illinois, thereby magnifying the vicious cycle of contracting state services, increasing taxes, and loss of the state's tax base."" China's silicon ceiling 01/18/10   Permlink   Broken Link World "Can China get rich without becoming free? History suggests it can't." Money for nothing 01/18/10   Permlink   Broken Link Books "I'm not even Andrew Ross Sorkin, the superstar financial writer at the New York Times. The advance for my new book wasn't in the millions of dollars. It wasn't even in the high six figures. Instead, we're talking more the, um, low five figures. After you deduct my agent's commission and the costs involved in research and writing, my take was in the very low five figures. This is, I'm sorry to say, more typical for authors. Indeed, most writers don't get published at all. Only giants like Sorkin or Palin command the great publishing sums. It raises a question that financial writers, for obvious questions, rarely ask: Should you really take financial advice from someone foolish enough to write for a living?" Global tinderbox 01/18/10   Permlink   Broken Link World "If the world appears to have escaped relatively unscathed by social unrest in 2009, despite suffering the worst recession since the 1930s, it might just prove the lull before the storm. Despite a tentative global recovery, for many people around the world economic and social conditions will continue to deteriorate in 2010." Hoisington Q4 letter 01/18/10   Permlink   Broken Link Markets "In 2009, the book This Time is Different.Eight Centuries of Financial Folly, by Reinhart and Rogoff, shed new light on the role of debt by compiling a database that looked at financial crises in 66 countries over a period of 800 years. The main standard in explaining more than 250 crises studied is whether debt is excessive relative to national income, even though idiosyncrasies apply in each case. They reiterate that this old rule (excessive debt) continues to apply, and this time is not different." How America can rise again 01/18/10   Permlink   Broken Link World "Are the fears of this moment our era's version of the 'missile gap'? Are they anything more than a combination of the two staple ingredients of doom-and-darkness statements through the whole course of our history? One of those ingredients is exaggerated complaint by whichever group is out of political power - those who thought America should be spelled with a 'k' under Nixon or Reagan, those who attend 'tea bag' rallies against the Obama administration now. The other is what historians call the bracing 'jeremiad' tradition of harsh warnings that reveal a faith that America can be better than it is. Football coaches roar and storm in their locker-room speeches at halftime to fire up the team, and American politicians, editorialists, and activists of various sorts have roared and stormed precisely because they have known this is the way the nation is roused to action." Investors keep fooling themselves 01/16/10   Permlink   Broken Link Zweig "Historically, inflation has eaten away three percentage points of return a year. Investment expenses and taxes each have cut returns by roughly one to two percentage points a year. All told, those costs reduce annual returns by five to seven points. So, in order to earn 6% for clients after inflation, fees and taxes, these financial planners will somehow have to pick investments that generate 11% or 13% a year before costs. Where will they find such huge gains? Since 1926, according to Ibbotson Associates, U.S. stocks have earned an annual average of 9.8%. Their long-term, net-net-net return is under 4%. All other major assets earned even less. If, like most people, you mix in some bonds and cash, your net-net-net is likely to be more like 2%." The self-fulfilling prophecy 01/16/10   Permlink   Broken Link Behaviour "Can you convince people that something is good merely by telling them that other people like it?" Hated stocks beat loved stocks 01/14/10   Permlink   Broken Link Dorfman "For 11 of the past 12 years, I have studied the performance of analysts. four favorite stocks, and the fate of the four they most scorned. My analysis covers 1998 through 2009, except for 2008, when I was temporarily retired as a columnist. Their favorites, on average, were flat during those years while the four stocks they hated most gained about 6 percent annually." Why so many Americans are broke 01/14/10   Permlink   Broken Link Thrift "Bookstores are full of books about getting out of debt. Why, then, are so many Americans struggling to get by? One reason, according to Connecticut College Psychology Professor Stuart Vyse, is that when it comes to money, people are not as rational as many economists - and authors - think. In his book Going Broke: Why Americans Can't Hold on to Their Money, Vyse cites studies that consistently show that people commonly make mental mistakes when it comes to their money. This realization is the foundation of behavioral economics, which holds that people behave differently than in the supremely logical fashion that classical economics predicts." Keys to success 01/12/10   Permlink   Broken Link Funds "Berkshire has really figured out how to behave with large insurance exposures that could potentially pay out billions from catastrophic events. There is a huge benefit to having so many non-insurance operating businesses affiliated with their insurance businesses, especially large utilities and railroads, where you are highly confident that you are not going to take a big hit. You can't have a bunch of operating businesses that could potentially lose much and also face a Katrina or a Wilma. That's where you have brilliance." Less intuition, more evidence 01/12/10   Permlink   Broken Link Behaviour "Those of us who aren't wine snobs or speculators probably don't care too much about the prices of first-growth Bordeaux, but most of us would benefit from accurate predictions about such things as academic performance in college; diagnoses of throat infections and gastrointestinal disorders; occupational choice; and whether or not someone is going to stay in a job, become a juvenile delinquent, or commit suicide. I chose those seemingly random topics because they're ones where statistically-based algorithms have demonstrated at least a 17 percent advantage over the judgments of human experts. But aren't there at least as many areas where the humans beat the algorithms? Apparently not. A 2000 paper surveyed 136 studies in which human judgment was compared to algorithmic prediction. Sixty-five of the studies found no real difference between the two, and 63 found that the equation performed significantly better than the person. Only eight of the studies found that people were significantly better predictors of the task at hand. If you're keeping score, that's just under a 6% win rate for the people and their intuition, and a 46% rate of clear losses." An immodest proposal 01/12/10   Permlink   Broken Link Taxes "In other words, the estate tax is really a capital gains tax, but triggered by death, not sale of the capital asset. So why not eliminate the estate tax, but then have the heirs inherit not only the stock in Amalgamated Widget but granddad's cost basis as well? Then, when Junior sells a million shares in order to pursue his dream of winning back the America's Cup or whatever, he has to pay a substantial capital gains tax on those shares. A possible compromise would be to set the capital gains on inherited assets at a higher rate than on assets bought by the person himself. This would allow the Democrats to feel all warm and fuzzy for having still socked it to the rich and allow the Republicans to claim credit for having eliminated an unfair, arbitrary, expensive, and economically pernicious tax." The 'other' imbalance and the financial crisis 01/12/10   Permlink   Broken Link Markets "I argue instead that the root imbalance was of a different kind: The entire world had an insatiable demand for safe debt instruments that put an enormous pressure on the U.S. financial system and its incentives (and this was facilitated by regulatory mistakes). The crisis itself was the result of the negative feedback loop between the initial tremors in the financial industry created to bridge the safe - assets gap and the panic associated with the chaotic unraveling of this complex industry. Essentially, the financial sector was able to create 'safe' assets from the securitization of lower quality ones, but at the cost of exposing the economy to a systemic panic." In China, fear of a real estate bubble 01/12/10   Permlink   Broken Link World "With property prices soaring in key cities, many investors and bankers worry that China has the next great real estate bubble waiting to be popped." The hidden persuaders of fast food 01/12/10   Permlink   Broken Link Behaviour "The Starbucks menu uses the "rule of three." The menu offers three sizes of coffees, given the enigmatic names of Tall, Grande, and Venti. (They're 12, 16, and 20 ounces respectively; 24 ounces for cold Venti drinks, to allow for ice.) Since Starbucks newbies won't know what they're getting, they tend to order the middle choice, Grande. In the psychology literature, this is known as "extremeness aversion" - people instinctively favor a middle choice, figuring it's safer. Guess what? You've just ordered two cups of expensive coffee. The Grande's sixteen ounces is two regular cups." How Visa dominates a market 01/11/10   Permlink   Broken Link Stocks "Every day, millions of Americans stand at store checkout counters and make a seemingly random decision: after swiping their debit card, they choose whether to punch in a code, or to sign their name. It is a pointless distinction to most consumers, since the price is the same either way. But behind the scenes, billions of dollars are at stake." Endless oil 01/09/10   Permlink   Broken Link World "Even if the new technologies add just a few percentage points to the recovery rate, such gains add years to global supply and boost the industry's profits. So the technology of coaxing oil out of the ground is constantly improving." The disposable worker 01/09/10   Permlink   Broken Link Economy "When employment in the U.S. eventually recovers, it's likely to be because American workers swallow hard and accept lower pay. That has been the pattern for decades now: Shockingly, pay for production and nonsupervisory workers - 80% of the private workforce - is 9% lower than it was in 1973, adjusted for inflation." Walk away from your mortgage! 01/09/10   Permlink   Broken Link Real Estate "Mortgage holders do sign a promissory note, which is a promise to pay. But the contract explicitly details the penalty for nonpayment - surrender of the property. The borrower isn't escaping the consequences; he is suffering them." Chavez devalues Bolivar 50% 01/09/10   Permlink   Broken Link World "Chavez is trying to maintain spending for his 21st century socialist revolution as South America's largest oil exporter fails to emerge from its first recession in six years. The government is seeking to stem its falling popularity and the highest inflation rate among 78 economies tracked by Bloomberg ahead of parliamentary elections scheduled for September." Technology not always a godsend 01/08/10   Permlink   Broken Link Brokers "If you're a client of the online brokerage Scotia iTrade, you'll have an idea of what I'm driving at in warning about technology risk. Scotia iTrade is what Bank of Nova Scotia renamed E*Trade Canada after scooping it up back in 2008. Last month, Scotiabank set about merging iTrade's back office record-keeping operation with the bank's own system. Complaints to this column from iTrade customers began rolling in on Dec. 11 and they've continued right into the new year." The worst footnote of 2009 01/08/10   Permlink   Broken Link Accounting "Voting for the worst footnote of 2009 ended last night and footnoted readers have chosen the disclosure by Chesapeake Energy (CHK) that it had spent $12.1 million to purchase Chairman and CEO Aubrey McClendon.s antique map collection." The Iceland rebellion 01/07/10   Permlink   Broken Link World "In many countries, taxpayers are rightly cranky over the idea that their governments are bailing out banks and others -- including their own regulators and central bankers -- who helped create the 2008 global financial meltdown. Iceland appears to be setting a new standard of taxpayer response that politicians everywhere might want to note." Crash in China 01/07/10   Permlink   Broken Link World "James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other high-flying companies whose stories were too good to be true. Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc." Improve results with checklists 01/06/10   Permlink   Broken Link Books "What's a low-tech way to improve the performance of everyone from doctors to investors to airline pilots? According to Atul Gawande, it's the humble checklist." Buffett gets Krafty 01/06/10   Permlink   Broken Link Buffett "The billionaire's warning against a bid for Cadbury could actually help Kraft nab the chocolate maker." Government replaced jobs 01/06/10   Permlink   Broken Link Government "In the just-so story of the evolution of our economy, our old manufacturing based economy has been replaced by an innovative knowledge economy. That's not quite true." Food fighter 01/06/10   Permlink   Broken Link Management "The right-wing hippie is a rare bird, and it's fair to say that most of Whole Foods' shoppers have trouble conceiving of it. They tend to be of a different stripe, politically and philosophically, and they were either oblivious or dimly aware of Mackey's views, until the moment, this summer, when Mackey published an op-ed piece in the Wall Street Journal asserting that the government should not be in the business of providing health care. This was hardly a radical view, and yet in the gathering heat of the health-care debate the op-ed, virally distributed via the left-leaning blogs, raised a fury." Our white collar nation 01/05/10   Permlink   Broken Link World "Farm productivity has exploded, increasing 1.9% per year over the last half of the century. At that rate, every 100 years, the same inputs on a farm produce 6.5 times as much foodstuffs. The percentage of the population engaged in farming dropped from 40% to under 2%, and yet we became a great exporting power in agricultural products. Similarly, manufacturing productivity rose 1.3%, on average, over the course of the second half of the 20th century." Money for nothing 01/05/10   Permlink   Broken Link Books "Should you really take financial advice from someone foolish enough to write for a living? Run the numbers. If a typical author earns, say, $3 per book sold and the book sells 20,000 copies, then that's $60,000 in gross income -- before costs. But that may be for a year's work. We're talking maybe $30 an hour." Note to Kevin O'Leary 01/05/10   Permlink   Broken Link World "Mr. O'Leary likes to say that he wants to put his money in countries that have high GDP growth rates such as China and India, not developed markets in North America and Europe that have anemic growth. Mr. O'Leary should stop confusing economic growth with stock market returns and brush up on the vast quantities of academic research out there that shows that, if anything, the correlation between GDP growth and equity returns is negative" Currency-neutral trap 01/04/10   Permlink   Broken Link Funds "Over the past 4 years, XSP has trailed the returns of IVV by an annualized rate of 2.99%. A Canadian investor betting that the C$ would appreciate against the USD and opting XSP over holding IVV directly would have been right on the first count but made no money on the bet. The C$ appreciated at an annualized 2.73% against the USD but the tracking error of XSP wiped out all the gains." Fruitful decade for many in the world 01/03/10   Permlink   Broken Link World "It may not feel that way right now, but the last 10 years may go down in world history as a big success. That idea may be hard to accept in the United States. After all, it was the decade of 9/11, the wars in Iraq and Afghanistan, and the financial crisis, all dramatic and painful events. But in economic terms, at least, the decade was a remarkably good one for many people around the globe." What's a bailed-out banker worth? 01/03/10   Permlink   Broken Link Government "How people are paid at the top in a free-market system has always been a contentious issue, especially in bad times. Babe Ruth.s most famous quip was not about baseball but about salaries. When asked in 1930 if it was right that he should be making more money than President Hoover, he replied, 'I had a better year than he did.'" A map of vanishing employment 01/03/10   Permlink   Broken Link Economy "The economic crisis, which has claimed more than 5 million jobs since the recession began, did not strike the entire country at once. A map of employment gains or losses by county tells the story of how those job losses first struck in the most vulnerable regions and then spread rapidly to the rest of the country." The economic 'experts' 01/03/10   Permlink   Broken Link Economics "In much the same way, economics is a science which employs some of the world's most intelligent people and most powerful computers in order to prove the bleeding obvious. When I first started writing about the subject, one excited academic told me to look into behavioural economics, which he described as the most "exciting and radical" of all the fields of economic research. Its most edgy, controversial finding? That people occasionally behave irrationally, driven by emotion rather than reason. Well, duh." The states and the stimulus 01/03/10   Permlink   Broken Link Government "Remember how $200 billion in federal stimulus cash was supposed to save the states from fiscal calamity? Well, hold on to your paychecks, because a big story of 2010 will be how all that free money has set the states up for an even bigger mess this year and into the future." The marshmallow and the cherry 01/02/10   Permlink   Broken Link Behaviour "Earlier in the year Jonah Lehrer explained in the New Yorker how cool deferred gratification is and how we need to teach it to our kids, the younger the better. Now, in the New York Times, John Tierney suggests that it's really an insidious habit for grownups, sacrificing real enjoyment for the mirage of an even better future. Can everything good be bad for you?" Carpe Diem? Maybe tomorrow 01/02/10   Permlink   Broken Link Behaviour "For once, social scientists have discovered a flaw in the human psyche that will not be tedious to correct. You may not even need a support group. You could try on your own by starting with this simple New Year's resolution: Have fun ... now!" The lost decade 01/02/10   Permlink   Broken Link Markets "Mr. Shiller says our mass psychology is much more one of speculation and risk-taking than it was a generation or two ago. We've come to rely on rising markets to create our wealth and well-being, at the expense of savings. The result? An increasingly rapid succession of boom-and-bust markets." Loan effort adding to housing woes 01/02/10   Permlink   Broken Link Government "The Obama administration.s $75 billion program to protect homeowners from foreclosure has been widely pronounced a disappointment, and some economists and real estate experts now contend it has done more harm than good." Economists are cheapskates 01/02/10   Permlink   Broken Link Thrift "Academic economists gather in Atlanta this weekend for their annual meetings, always held the first weekend after New Year's Day. That's not only because it coincides with holidays at most universities. A post-holiday lull in business travel also puts hotel rates near the lowest point of the year." Stingy News Weekly Archive: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10
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