FusionIQ

Stairway To Heaven

2012-02-10T07:19:00.001-08:00

Warren Buffett kicks gold to the curb, we’ve been suggesting gold is a bubble for many months.

http://finance.fortune.cnn.com/2012/02/09/warren-buffett-berkshire-shareholder-letter/

Lost Highway

2012-02-09T09:47:00.001-08:00

To the surprise of few, banks going to principal’s office over unsavory mortgage securities.

http://www.reuters.com/article/2012/02/09/banks-mortgagesuits-idUSL4E8D90NJ20120209

Double Standard

2012-02-03T08:39:00.001-08:00

Perhaps they didn’t understand the question? I remind you Senator, you’re under oath.

http://finance.yahoo.com/news/senate-tighten-ban-insider-trading-233608799.html

Could there ever be a better contrarian signal for a RISK ON TRADE !

2012-02-02T07:18:00.001-08:00

Aces and Eights

2012-02-01T08:09:00.001-08:00

Jim Rogers to markets, I don’t get it. Bet against Facebook at your own risk.

http://www.cnbc.com/id/46186936

Train In Vain

2012-01-31T06:35:00.001-08:00

Bank of America cutting again in 2012, further evidence the forced marriage with Merrill Lynch was a loser.

http://www.investmentnews.com/article/20120129/REG/301299985/-1/INIssueAlert01

Busted By The Man

2012-01-30T06:28:00.001-08:00

FINRA hits Merrill Lynch with a $1 million fine for failing to arbitrate with employees, sounds like a fun bunch.

http://www.finra.org/Newsroom/NewsReleases/2012/P125455?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+FINRANews+%28FINRA+News%29

Another Green Bomb

2012-01-27T09:33:00.001-08:00

More taxpayer dollars wasted, it’s not funny anymore.

http://www.businessweek.com/news/2012-01-27/ener1-parent-of-u-s-subsidized-battery-unit-seeks-bankruptcy.html

Passive Aggressive

2012-01-26T06:49:00.001-08:00

Investors are now infatuated with passive ETF strategies, making American Funds the biggest loser.

http://www.investmentnews.com/article/20120122/REG/301229986/-1/INIssueAlert01

Roman Wilderness

2012-01-25T08:45:00.001-08:00

George Soros to markets, it’s the end of civilization as we know it.

http://www.thedailybeast.com/newsweek/2012/01/22/george-soros-on-the-coming-u-s-class-war.print.html

FusionIQ Webinar

2012-01-20T11:10:00.001-08:00

FusionIQ Webinar

Join us for a Webinar on January 25

Space is limited.
Reserve your Webinar seat now at:
https://www3.gotomeeting.com/register/250649734

Want to see FusionIQ in action ?? Please join FusionIQ CEO Barry Ritholtz and founder Kevin Lane for a live demonstration of the power of the FusionIQ tool. Through a GoToWebinar, you will be able to see IQ live as Barry and Kevin walk you though pointers on how to best use your IQ Investor service. We will answer try to address many of the questions we have received, and maybe give you a few very interesting - and timely - research ideas.

This live webinar will occur on Wednesday, January 25 at 5pm Eastern, and will simply require you to login to the GoToMeeting address we have provided above.

Please be sure to join us, as this promises to help you realize the powerful potential of Fusion IQ as a unique investing tool. We would ask that you forward any questions in advance to info@fusioninvest.com, so we can address as many of the most relevant topics as possible.

Many thanks in advance for your participation !

Title:	FusionIQ Webinar
Date:	Wednesday, January 25, 2012
Time:	5:00 PM - 6:00 PM EST

After registering you will receive a confirmation email containing information about joining the Webinar.

System Requirements
PC-based attendees Required: Windows® 7, Vista, XP or 2003 Server

Macintosh®-based attendees Required: Mac OS® X 10.5 or newer

Best.

Barry Ritholtz Kevin Lane

CEO Founder

Wealth Creation

2012-01-20T08:21:00.001-08:00

The coming Facebook IPO is expected to create over 1,000 new millionaires. Well done.

http://www.dailymail.co.uk/news/article-2072204/Facebook-IPO-create-1-000-millionaires-companys-rank-file.html

It's Your Money

2012-01-19T07:03:00.001-08:00

Even after Solyndra, taxpayer dollars still being wasted on “green” projects generating zero returns.

http://www.wealthwire.com/news/energy/2520

Tough Love

2012-01-18T08:09:00.001-08:00

Advisers often lack the education to needed to provide financial planning guidance.

http://www.smartmoney.com/invest/strategies/can-these-people-teach-financial-planning-1326821993716/

The #1 Investment Return Factor No One Wants to Talk About

2012-01-17T10:30:00.001-08:00

Relative strength is the #1 investment return factor no one wants to talk about. The reasons are not entirely clear to me, but perhaps it is because it is too simple. It does not require a CFA to forecast earnings or to determine an economic moat. It does not require a CPA to attempt to assess valuation. It does not require an MBA to assess strategic business decisions. In short, it does not play to the guild mentality wherein only certain masters of the universe have the elevated intellect, knowledge, and background to invest successfully.

Although relative strength is simple, I am not suggesting that relative strength is easy to implement. Losing weight is simple too: eat less, exercise more. That does not make it easy to do. Relative strength, probably like most successful investment strategies, requires an inordinate amount of discipline—and tolerance of a fair amount of randomness. Like most games that are easy to learn, but difficult to master—chess would be an apt example—proficient use of relative strength also requires deep study and experience.

Yet relative strength has been used successfully by practitioners for many generations. George Chestnutt of the American Investors Fund began using it to run money in the 1930s and said it had been in use by others for at least a generation before that. Relative strength has been shown to work in many asset classes, across many marketsfor more than 100 years. Since the early 1990s, even academics have gotten in on the act.

And for all that, relative strength remains ignored.

I was reminded of its apparent obscurity again this week when reading an excellent article on indexing by the macrocephalic Rob Arnott. He had a very nice piece in Advisor Perspectives about the virtues of alternative beta indexes.

In recent years, a whole new category of investments—called “alternative betas”—has emerged. Some of these alternative beta strategies, including the Fundamental Index^® approach, use various structural schemes to select and/or weight securities in the index. In that sense, they fall between traditional cap-weighted approaches and active management: they pick up broadly diversified market exposure (beta) but seek to produce better results than cap-weighted indexes (what is desired from active managers).

Our CIO, Jason Hsu, and research staff have replicated the basic methodologies of many of these rules-based alternative betas, ranging from a simple equal-weighted approach to the straightforward Fundamental Index strategy to the truly exotic such as risk clustering and diversity weighting.⁷ The potential rewards are promising. Of the 10 non-cap-weighted U.S. equity strategies studied, all outperformed the passive cap-weighted benchmark. The range of excess returns by alternative beta strategies was between 0.4% and 3.0% per annum—matching a reasonable estimate of the top quartile of active managers—that is, the small cadre of managers who generally are successful at beating the benchmark (see Table 1). The bottom line: investors can obtain top-quartile performance with far less effort than is required to research and monitor traditional active equity managers.

Mr. Arnott has a very good point—and the numbers to prove it. Lots of alternative beta strategies are available that can potentially offer top-quartile performance relative to other active managers and that may also outperform traditional passive cap-weighted benchmarks. He is no doubt proselytizing on behalf of his firm’s Fundamental Index approach to some extent, but I think his underlying thesis is correct. He offers the following table as evidence that alternative beta strategies can outperform, using data from 1964- 2009:

Source: Advisor Perspectives, Research Affiliates

I would like to offer a slight modification of this table, since it is only a listing of “select” alternative beta strategies. Relative strength has been inexplicably excluded. Below, I present the same table of alternative beta strategies now including relative strength, the #1 investment return factor no one wants to talk about. (I have my own theory about why other indexers don’t want to talk about relative strength, but I will let you reach your own conclusions.) The relative strength returns presented in the table are for the exact same time period, 1964 through 2009. They are taken from Professor Ken French’s database and show the results of a simple relative strength selection process when using the top third (as ranked by relative strength) of the large cap universe.

Source: Research Affiliates, Dorsey Wright

Are you surprised that relative strength blows away the other alternative beta strategies?

You shouldn’t be. There are plenty of academic and practitioner studies attesting to the power of relative strength. In short, I agree with Mr. Arnott that alternative beta indexes are worth a close look. And I think it would be particularly prudent to consider relative strength weighted indexes.

Clean Machine

2012-01-17T08:01:00.001-08:00

Natural Gas is abundant, clean and inexpensive. So what’s the problem?

http://www.wealthwire.com/news/energy/2519?r=1

Batteries Not Included

2012-01-16T12:12:00.001-08:00

Higher costs far outweigh any benefits of hybrid vehicles , consumers quickly losing interest.

http://www.bloomberg.com/news/2012-01-10/hybrids-in-u-s-losing-appeal-as-vehicles-run-on-less-gas-cars.html

Taking Care Of Business

2012-01-13T10:40:00.001-08:00

Last time I checked, hard work, ambition and education still matters.

http://www.pewsocialtrends.org/2012/01/11/rising-share-of-americans-see-conflict-between-rich-and-poor/?src=prc-headline

Market 1, Buffett 0

2012-01-12T08:40:00.001-08:00

Berkshire Hathaway underperforms S&P 500 in 2011, has the Old Man lost his way?

http://www.investmentnews.com/article/20120108/REG/301089998/-1/INIssueAlert01

Wrong Number

2012-01-11T10:52:00.001-08:00

Morgan Stanley CEO tells go-getter young exec to go jump in the lake. Fail.

http://www.businessinsider.com/james-gorman-morgan-stanley-ceo-email-to-joseph-maddalone-2012-1

Pull The Plug

2012-01-11T06:55:00.001-08:00

This should sound familiar to readers of our blog, it’s time to call your elected officials.

http://www.caseyresearch.com/cdd/green-energy-too-many-subsidies-too-little-performance

Game Over

2012-01-05T07:37:00.001-08:00

The end of Western Civilization has arrived, it’s a foregone conclusion at this point.

http://www.businessinsider.com/eight-simple-truths-you-need-to-know-about-2012-2012-1

Hybrid Hype

2012-01-04T06:35:00.001-08:00

Honda sued for not delivering promised high mileage from Hybrid Civic, another green monster created.

http://www.msnbc.msn.com/id/45855282/ns/business-autos/t/honda-sued-over-mileage-small-claims-court/

Man From Atlantis

2012-01-03T10:42:00.001-08:00

Did Europe suddenly fall into the ocean? Proceed with caution.

http://finance.yahoo.com/news/2012-off-good-start-time-171018749.html

The Lost Decade

2011-12-27T09:19:00.001-08:00

According to Ben Bernanke, inflation doesn’t exist. We respectfully disagree.

http://www.wealthwire.com/news/economy/2429?r=1

Lump Of Coal

2011-12-22T09:21:00.001-08:00

Happy Holidays from your friends in Washington, DC.

http://www.wealthwire.com/news/economy/2420?r=1

All Hat, No Cattle

2011-12-21T09:46:00.001-08:00

S&P at 1330 by Christmas? Only 3 shopping days left to find 1000 points!

http://www.wealthwire.com/news/equities/2332

European Vacation

2011-12-16T10:18:00.001-08:00

The Vix appears to be sending mixed messages, contrarian investors still smell fear.

http://finance.yahoo.com/news/-tis-the-season-for-vix-to-dip-.html

Mission Accomplished

2011-12-15T07:16:00.001-08:00

The war in Iraq declared over, God bless our fighting men and women.

http://www.nytimes.com/2011/12/16/world/middleeast/panetta-in-baghdad-for-iraq-military-handover-ceremony.html

Thelma and Louise

2011-12-14T09:18:00.001-08:00

According to Wealth Wire, Bernanke and The Fed are driving off a cliff.

http://www.wealthwire.com/news/economy/2375?r=1

The Hangover

2011-12-14T06:44:00.001-08:00

Dennis Gartman says the party’s over for Gold. You don’t have to go home, but you can’t stay here.

http://www.bloomberg.com/news/2011-12-13/death-of-gold-bull-market-seen-by-gartman.html

The Four Horsemen

2011-12-13T08:04:00.001-08:00

According to most, 2012 looks bleak. Here’s 10 reasons it’s all over for the global markets.

http://www.marketwatch.com/story/our-decade-from-hell-will-get-worse-in-2012-2011-12-13?link=MW_story_popular

Know Your Broker

2011-12-12T10:42:00.001-08:00

Nefarious brokers finding it harder to make a living, it’s about time.

http://www.investmentnews.com/article/20111211/REG/312119999/-1/INIssueAlert01

Business As Usual

2011-12-09T08:00:00.001-08:00

Corzine confirms what we already suspected, Wall Street and Congress sticking to the low road.

http://finance.yahoo.com/blogs/breakout/corzine-testimony-shocker-anything-changed-wall-street-184150499.html

Fantasy Island

2011-12-08T07:37:00.001-08:00

Green Energy, it’s time to pull the plug.

http://www.wealthwire.com/news/energy/2283

A Fools Errand

2011-12-07T11:43:00.001-08:00

This idea has the potential to destroy global trading markets and drive up client costs.

http://finance.yahoo.com/news/robin-hood-tax-171008675.html

Creature Feature

2011-12-06T07:02:00.001-08:00

Congress and Wall Street team up to produce a new low for the system.

http://finance.yahoo.com/blogs/daily-ticker/power-people-outrage-over-insider-trading-puts-stock-124431845.html

Return To Sender

2011-12-05T08:03:00.001-08:00

Chasing yesterday’s returns is a dangerous strategy. We agree.

http://www.investmentnews.com/article/20111204/REG/312049983/-1/INIssueAlert01

Crony Phony

2011-12-02T11:43:00.001-08:00

Portrayed as a hero in Too Big To Fail, Hank Paulson may have been tipping off his Wall Street friends in 2008.

http://finance.yahoo.com/blogs/daily-ticker/taken-task-capt-cronyism-hank-paulson-124007702.html

Unhappy Meals

2011-12-01T09:22:00.001-08:00

If Wall Street were run like McDonald’s, we’d all be in a better place. Gym memberships would likely skyrocket also.

http://finance.yahoo.com/news/5-ideas-wall-street-mcdonald-050157534.html

Have Gun, Will Travel

2011-11-30T08:21:00.001-08:00

French financial strategist is very concerned about gun ownership in America. He might want to visit Normandy, located in France. You’re welcome.

http://www.businessinsider.com/albert-edward-i-just-got-back-from-america-and-boy-is-it-horrible-2011-11

Dead Volt

2011-11-28T09:51:00.001-08:00

These little peaches cost taxpayers $7500 per vehicle, does that math work for you?

http://money.cnn.com/2011/11/28/autos/volt_fire_probe/

Silicon Valley High

2011-11-28T06:36:00.001-08:00

“I’ve worked in the private sector. They expect results.” Dr. Ray Stantz

http://uncrunched.com/2011/11/27/startups-are-hard-so-work-more-cry-less-and-quit-all-the-whining/

The Boss Is A Turkey

2011-11-23T08:13:00.001-08:00

This just about covers it. Have a great Thanksgiving!

http://finance.yahoo.com/news/three-types-of-bosses-that-should-be-fired-20111122.html

Bank of Charlie Brown

2011-11-22T07:47:00.001-08:00

Bank of America just can’t seem to kick that football, good grief.

http://finance.yahoo.com/news/bofa-warned-regulators-stronger-report-034041598.html

Apocalypse Frau

2011-11-18T07:54:00.001-08:00

Deutsche Bank says the end is near if Germany refuses to back the ECB. In related news, shovel futures soaring.

http://www.businessinsider.com/deutsche-bank-if-merkel-doesnt-change-our-investment-advice-is-to-dig-a-hole-in-the-ground-and-hide-2011-11

France the problem ???

2011-11-17T11:51:00.001-08:00

Interesting comments from Jack Albin CIO of Harris Bank ....

For the past months, investors have been fixated on Greece, Italy and Spain. All the while we've been pointing to the rising spread between AAA rated French Bonds and AAA rated German Bunds. We've contended that this is truly ground zero in the euro crisis because France is suppose to be one of the healthy eurozone members that can “fix” the problems of the aforementioned troubled southern periphery countries. As the second largest contributor to the bailout fund (EFSF), France's AAA rating is vital to the bailout fund's creditworthiness. While Standard & Poor's stated that it “mistakenly” issued a downgrade to France on November 10th, we think that release was likely an unintended precursor to a future action. Unknowingly, French President Nicolas Sarkozy revealed how vulnerable he felt the country's rating was in early October when he suggested using the EFSF to recapitalize France's banks rather than use direct government interjection.

We have long held that the euro is a flawed construct in need of structural fixes. The problem is we don't think Europe knows whether it wants to make the necessary changes. We firmly believe that the bond market vigilantes will continue to hammer away until Europe is forced to decide. Longer term, this appears to be binomial decision. Either it is 1) full fiscal integration or 2) let the currency union break up. In the short to intermediate term, we assume other avenues will be explored to extend this decision. Unfortunately for Europe, this action requires cash which they have yet to find. While the Germans remain opposed, it currently appears that the only "solution" that provides the necessary firepower to stem the rising rates would be for the European Central Bank (ECB) to buy these troubled bonds in an unsterilized manner. Yes, that means revving up the printing presses.

The market is voicing its opinion that a break-up is a rising probability. If these countries are going to go their separate fiscal ways, wouldn't it make sense for the market to judge their creditworthiness on their own valor, rather than as a combined Europe? Kicking the can down the road has become a derided term over the past few years. However, one of its benefits is that it allows an event that would have otherwise been a shock, to be lessened in severity as market participants adjust to the now known realities. While Europe could certainly still unwind and cause market turmoil, we believe valuations in markets ex Europe are compelling enough to begin nibbling. We'll keep some dry powder just in case S&P decides to issue another downgrade.

50 Ways To Leave Your Broker

2011-11-17T10:34:00.001-08:00

Fusion colleague Josh Brown explains why risk should always be priority one for your adviser.

http://blogs.wsj.com/financial-adviser/2011/11/17/market-volatility-and-the-priorities-of-an-adviser/

Green Monster

2011-11-17T08:55:00.001-08:00

As the fallout from Solyndra continues, another politically charged taxpayer shakedown surfaces.

http://www.northwestohio.com/news/story.aspx?id=687702

Road To Nowhere

2011-11-17T07:26:00.001-08:00

According to Financial Sense, the United States is falling apart. It’s hard to disagree.

http://www.financialsense.com/contributors/ron-hera/2011/11/11/how-the-u-s-will-become-a-3rd-world-country-part-1

Fishing With Dynamite

2011-11-16T06:45:00.001-08:00

Gingrich paid $1.6-1.8 million by GSE’s? You can’t make this up.

http://www.bloomberg.com/news/2011-11-16/gingrich-said-to-be-paid-at-least-1-6-million-by-freddie-mac.html

Off The Mark

2011-11-15T07:25:00.001-08:00

The New Yorker finds 80% of hedge funds miss their benchmark, but you won’t see that reflected in 80% lower fees.

http://money.usnews.com/money/blogs/On-Retirement/2011/10/13/why-hedge-funds-wont-make-you-wealthy

Tax Payers Unplugged

2011-11-14T07:56:00.001-08:00

Chevy Volt catches on fire during safety test, please send your $7500 check in right away.

http://www.autoblog.com/2011/11/11/chevy-volt-battery-catches-fire-in-nhtsa-lab/

Angels And Demons

2011-11-11T06:50:00.001-08:00

Can Bank of America be redeemed? The writer believes it can, we agree to disagree.

http://www.marketwatch.com/story/bank-of-america-fallen-angel-or-demon-2011-11-11

Social Media 101

2011-11-10T07:17:00.001-08:00

Schwab feels Social Media has some value for advisers. We happen to agree.

http://www.investmentnews.com/article/20111103/BLOG02/111109971&issuedate=20111109&sid=TECH

Kool-Aid And The Gang

2011-11-09T08:54:00.001-08:00

JP Morgan analyst Tom Lee expects a 20% year-end rally. Really? Whose interests are being served here?

http://finance.yahoo.com/blogs/breakout/expect-20-end-market-rally-says-jpm-tom-131844848.html

2010 vs. 2011, The Market Ticker

2011-11-08T12:58:00.001-08:00

Prediction scorecards at about 50%, meaning not much has changed. That isn’t positive.

http://market-ticker.org/akcs-www?post=176132

The Road Less Traveled

2011-11-08T08:27:00.001-08:00

According to The Motley Fool, signs point to improvement next year. Well, it’s hard to fall off the floor.

http://www.fool.com/investing/general/2011/11/08/fuel-building-for-an-economic-recovery.aspx

Young And Restless

2011-11-07T07:53:00.001-08:00

Heirs rarely stay with the family adviser, connection timed out.

http://www.investmentnews.com/article/20111106/REG/311069982/-1/INIssueAlert01

Boiling Point

2011-11-04T07:35:00.001-07:00

Unemployment at 9% isn’t the whole story, it’s actually much worse.

http://finance.yahoo.com/blogs/daniel-gross/october-jobs-report-deja-vu-over-again-130357751.html

Another Tricky Day

2011-11-03T11:23:00.001-07:00

This is no social crisis, just a zombie apocalypse. Hat tip, Roger Daltrey.

http://finance.yahoo.com/blogs/daily-ticker/why-u-set-join-zombie-club-nations-pento-131916534.html

McMystery

2011-11-03T06:48:00.001-07:00

McDonald’s iconic sandwich, low on quality, high on restructure.

http://consumerist.com/2011/11/whats-a-mcrib-made-of.html

Help Not Wanted

2011-11-02T10:42:00.001-07:00

Bank of America employees jumping ship, unfortunately the life boats are full.

http://finance.yahoo.com/news/BofA-employees-flood-banks-rb-4170693021.html?x=0&sec=topStories&pos=6&asset=&ccode=

Shale Whale

2011-11-02T07:10:00.001-07:00

Higher production than originally expected from several U.S. basins, improving the domestic energy outlook.

http://stocks.investopedia.com/stock-analysis/2011/3-Energy-Companies-Raising-Production-Growth-For-2011-SWN-NBL-CNX-RRC1031.aspx?partner=YahooSA#axzz1cYWS5GGH

Bank On The Run

2011-11-01T13:36:00.001-07:00

Bank of America backs off $5 debit card fee, or was this really a just a marketing stunt?

http://beta.finance.yahoo.com/news/bank-america-drops-5-debit-154433487.html

Dazed And Confused

2011-11-01T07:31:00.001-07:00

MF Global meltdown sends everyone running for cover.

http://www.cnbc.com/id/45117121

Race To The Bottom

2011-10-31T09:22:00.001-07:00

This shouldn’t surprise anyone, hat tip The Big Picture.

http://www.bloomberg.com/news/2011-10-31/bonds-beating-u-s-stocks-over-30-years-for-first-time-since-19th-century.html

Glass Houses

2011-10-31T07:22:00.001-07:00

The SEC threatens to sanction FINRA, the political fallout here could be very significant.

http://www.investmentnews.com/article/20111030/REG/310309968/-1/INIssueAlert01

Failure To Launch

2011-10-28T07:34:00.001-07:00

JP Morgan and Citi call in sick, dogs don’t bark at parked cars.

http://blogs.wsj.com/overheard/2011/10/28/j-p-morgans-dimon-lets-bofa-dance-alone/?mod=yahoo_hs

Early Bird Special

2011-10-27T10:59:00.001-07:00

VC? All the cool kids are doing it. If you’re over 40, you’re over the hill.

http://finance.fortune.cnn.com/2011/10/13/is-there-an-age-bias-in-venture-capital/

Negative ROI

2011-10-27T08:39:00.001-07:00

Harvard Business grads still heading to Wall St? May need to schedule some time with the guidance counselor.

http://www.cnbc.com/id/45030885/

Blind Leading The Blind

2011-10-26T08:02:00.001-07:00

Fact, it will cost you $75 to close an IRA account at Bank of America. What’s the mystery here?

http://www.bloomberg.com/news/2011-10-26/-incensed-moynihan-fights-bofa-critics-with-main-street-appeal.html?cmpid=yhoo

Occupy This

2011-10-25T08:25:00.001-07:00

Elizabeth Warren sends the political establishment to DEFCON 1, why is she so scary?

http://www.thedailybeast.com/articles/2011/10/24/elizabeth-warren-i-created-occupy-wall-street.html

Fool In The Rain

2011-10-24T11:02:00.001-07:00

The Volcker Rule again points out the flawed wirehouse business model, clients should be paying close attention.

http://www.investmentnews.com/article/20111023/REG/310239957/-1/INIssueAlert01

Old And In The Way

2011-10-21T08:40:00.001-07:00

The Class of 2015 has a very different perspective than you do. Also, 40 is not old.

http://www.businessinsider.com/beloit-mindset-what-college-kids-think-of-the-world-2011-10

Zombie Attack

2011-10-20T07:25:00.001-07:00

Is Bank of America going out of business?

http://blogs.reuters.com/christopher-whalen/2011/10/19/is-bank-of-america-preparing-for-a-chapter-11/

Paradise Lost

2011-10-20T06:40:00.001-07:00

Financial Sense puts some boots on the ground with the Occupiers, is anyone listening?

http://www.financialsense.com/contributors/chris-martenson/2011/10/14/occupy-wall-street-what-is-really-going-on

Dead Battery

2011-10-19T07:09:00.001-07:00

More tax dollars wasted on a bad business model. We’ve seen this movie before.

http://online.wsj.com/article/SB10001424052970204346104576637061152676584.html?mod=WSJ_Opinion_LEADTop

Risky Business

2011-10-18T09:08:00.001-07:00

Investment News reminds us “Buy and Hope” is not an investment strategy.

http://www.investmentnews.com/article/20111016/REG/310169990/-1/INIssueAlert01

Stranger In A Strange Land

2011-10-14T08:40:00.001-07:00

Iran plot against the Saudi Ambassador visiting the U.S. goes nowhere. This isn’t over.

http://www.foreignpolicy.com/articles/2011/10/13/worst_plot_ever

Wake Up Call

2011-10-11T08:54:00.001-07:00

The bond market is telling us something is wrong, another recession now a distinct possibility.

http://www.bloomberg.com/news/2011-10-11/bonds-showing-60-chance-of-recession-with-bernanke-behind-curve-for-bofa.html

Train In Vain

2011-10-10T11:09:00.001-07:00

Banks continue taking heavy fire over Dodd-Frank, the kids are alright.

http://www.cnbc.com/id/44800021/

Market Sentiment Snapshot from Google Trends -keyword "Recession"

2011-10-06T07:29:00.001-07:00

I think the following chart, from Google Trends is very interesting. As seen below I keyed in the word “recession” in Google Trends to try and tap into investor sentiment through the means most people use now, the internet. Interestingly enough as we see below during the depths of the credit crisis and market plunge of ’08 that bottomed in ’09 the word recession was actively and consistently search for. Subsequently as the market improved and things got better the amount of searching for the word “recession” tapered off dramatically.

Remember investors, generally speaking, are reactive and not proactive, thus searches tend to peak during extreme periods of panic/interest. That said we think given the amount of sell-off the market has recently endured there are a relatively low amount of searches for the word recession. This suggests to us investor complacency/apathy which isn’t something we correlate (from a sentiment perspective) with a solid market trough.

Please note: The letters on the chart below represent highly read news stories and aren’t paramount to the point we are trying to make.

GM Gets On Board

2011-10-06T07:14:00.001-07:00

GM endorses split-cycle technology, Scuderi firmly in the driver’s seat.

http://www.thegreencarwebsite.co.uk/blog/index.php/2011/10/06/general-motors-backs-split-cycle-engines/

Boomerang, by Michael Lewis

2011-10-05T09:24:00.001-07:00

Kyle Bass hits the mark, again.

http://www.businessinsider.com/new-michael-lewis-book-kyle-bass-has-big-role-as-a-europe-superbear-2011-10

Last Call

2011-10-05T07:34:00.001-07:00

This just in, Wall Street firms likely cutting staff. Damn shame about that Titanic.

http://wallstcheatsheet.com/stocks/these-wall-street-firms-are-about-to-start-firing-people-like-crazy.html/

On The Defensive

2011-10-03T07:36:00.001-07:00

UBS feeling the heat, another reminder the model is broken.

http://www.investmentnews.com/article/20111002/REG/310029971/-1/INIssueAlert01

Et tu, Brute?

2011-09-30T07:28:00.001-07:00

Morgan Stanley now less attractive than Italian sovereign debt, didn’t see this one coming.

http://www.bloomberg.com/news/2011-09-30/morgan-stanley-seen-as-risky-as-italian-banks-in-swaps-market.html

Late To The Party

2011-09-29T08:54:00.001-07:00

Unemployment a national crisis? I think somebody missed a meeting.

http://www.google.com/hostednews/ap/article/ALeqM5iZnSwdnOO-tXItIrfqxTRwjfk1pw?docId=66690cd132e04cb2b67091765ae93317

The Gloves Come Off

2011-09-29T06:25:00.001-07:00

Did he say $50 billion? Can’t see how this ends well for Bank of America.

http://www.cnbc.com/id/44700101

Bad Moon Rising

2011-09-28T09:17:00.001-07:00

Paulson’s on the phone. Paulson? What’s he done for me lately?

http://online.wsj.com/article/SB10001424052970204010604576597271507239998.html?mod=WSJ_article_forsub

The 10 most expensive streets in the U.S.

2011-09-28T01:05:00.001-07:00

2. Fifth Avenue, Midtown Manhattan, New York

It’s one of the priciest shopping streets in the world, and it costs a pretty penny to rent office space here — $97 per square foot, according to Jones Lang LaSalle. Office tenants, including a number of hedge funds, will pay a premium for the location and its amenities. “Location is everything in real estate and this study proves it. Despite economic conditions, demand for these prime and often prestigious addresses continues to be high,” said John Sikaitis, senior vice president of research at Jones Lang LaSalle, in a news release.

Twist and Shout ....

2011-09-28T01:02:00.001-07:00

Dallas Federal Reserve Bank President Richard Fisher on Tuesday slammed the central bank’s decision last week to extend the maturity of its balance sheet, calling Operation Twist “jujitsu on the yield curve” that is “likely to prove ineffective” and could actually work against job creation. Until Congress can get its act together and put in place policies that encourage businesses to take advantage of low interest rates, “further monetary accommodation - be it in the form of quantitative easing or performing “jujitsu” on the yield curve through efforts such as Operation Twist — will represent nothing more than pushing on a string,” Fisher said in a speech in Dallas.

Fisher added that his regular business contacts gave him an “earful” of arguments against a Twist-like plan before the Fed meeting. The business executives argued it would scare consumers, hurt banks and pension funds and make the Fed’s eventual exit from ultra-easy monetary policy more difficult, he reported. Fisher was one of three Fed regional-bank presidents who voted against Operation Twist, under which the Fed will sell $400 billion of its current holdings of short-term Treasurys and buy an equal amount of longer-maturities over the next nine months. The idea of the plan is to drive down long-term interest rates and hopefully boost business spending and job creation.

Fisher said the program might indirectly come to the aid of money-market funds by mildly raising short-term rates. This might allow the money-market funds to stop buying European bank debt in search of higher yields to cover costs. European bank debt is “now considered by many analysts to be somewhat toxic,” he dryly noted. Fisher also said he did support the Fed’s decision to reinvest maturing agency debt and agency mortgage-backed securities into agency MBS as “a tactical way to provide limited assistance to the mortgage market at little cost.”

Lockhart differs on Twist

In a separate address Tuesday, Atlanta Fed President Dennis Lockhart said he supported Operation Twist, but thought it might only have a “modest positive impact” on the economy. No one seems to fully understand what a leveraged rescue fund for the euro zone would mean, but the hint of a new plan in the works is clearly supporting the currency. “It is not a fix for everything that ails the economy, but it should help,” Lockhart remarked in a speech in Jacksonville, Fla. Operation Twist won’t result in “large gains” because the normal channels though which Fed interest-rate cuts affect the economy are blocked, he added.

Lockhart also said he has trimmed his growth forecast for the next 15 months but doesn’t expect a double-dip recession. Inflation has been “higher than desired and higher than expected” this year, but should “fall back” in the next few months, according to Lockhart, who will vote on interest-rate decisions in 2012. Potential spillover from the European debt crisis is the biggest threat to the recovery at the moment, he said. Lockhart commented that the market should not take the decision to launch Twist as signaling further action was likely, or conveying that central bankers were done easing.

The direction of policy going forward will be data-dependent, he elaborated.