Finance Geek

The IMF is clearly not satisfied with the current state of affairs in Europe. Not only has the global “agency” reduced growth forecasts across the board, it is predicting a global contraction absent comprehensive solutions to the PIIGS problems. Setting aside the obtuse idea that the world’s economic problems only reside within the PIIGS, the stakes are very high in the manner and method that Greece pioneers before its March zero hour. The entire banking structure awaits some kind of agreement, knowing full well that this is the test case that decides how the multi-trillion…

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In his State of the Union Address Tuesday evening, President Obama repeated his call for tax increases on high income earners-even though some of these same tax increases failed to get through Congress in 2010 when the Democrats controlled both Houses.
This is part of the politics of class warfare that has become the defining feature of Mr. Obama’s presidency.
American manufacturing has fled offshore due to some of the highest corporate tax rates and the most stringent regulations in the world. Millions of jobs have gone offshore.
Mr. Obama is desperate to get manufacturing to return, so…

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Good news: economic activity is picking up. Not so good news: economic growth remains anemic and the pace of job creation too slow to make a meaningful dent in the unemployment rate. And there are potential external shocks - the fiscal crisis in Europe or an oil crisis in the Persian Gulf — that could stall the modest recovery now underway.
What’s really needed is a “grand bargain” - near-term stimulus focused on investments in infrastructure, R&D, and human capital, accompanied by a credible long term plan to reduce the federal deficit to sustainable levels. But, in…

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Regulation: Tuesday’s GOP debate moderator was shocked by the front-runners’ broadside against Dodd-Frank banking rules. He seemed to think they were hyping their damage. They weren’t.
The media elite are under the assumption that all government regulations are good. So when both Mitt Romney and Newt Gingrich took shots at Dodd-Frank, NBC News anchor Brian Williams was flabbergasted. He expressed skepticism that its new rules posed any problem.
Gingrich straightened him out, arguing the media and the public don’t know how “bad” the Democrats’ law…

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Though the title of this piece would perhaps suggest a dislike of hedge funds, nothing could be further from the truth. If hedge funds didn’t exist, we’d have to invent them.
They’re essential to a smoothly functioning economy for the traders in their employ endlessly searching for market mispricings to fix through the commitment of capital. Price signals tell those with capital where investment is and is not needed, and as hedge funds correct what’s not right in markets, their existence ensures that less capital is destroyed on a daily basis.
And while commentators who…

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Despite frequent, dire warnings about the unsustainability of government budget deficits in the United States, Europe and Japan, investors are lining up to lend to some governments at very low interest rates. Interest rates on 10-year U.S. treasury notes are about 2%, close to record lows. The same is true in Germany and interest rates on Japan’s 10-year government bonds are below 1%.
This outcome is all the more surprising when, added to fear over oversupply of government debt, are warnings that the support given to debt markets by central banks amounts to the printing…

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Bob Davids is an outspoken and provocative American entrepreneur who has launched six highly successful companies over the course of his storied career.
His myriad business successes include building Radica Games, the third most profitable toy maker in the world which was purchased by Mattel in 2006; launching Sea Smoke, his world-class vineyard located in Central California (featured in the Academy Award-winning movie “Sideways”); and his latest venture, “Villa Keliki”, a luxurious 8,000 square meter resort located on the breathtaking island of Bali.
Davids has been…

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The recent release of the 2006 transcripts of the Federal Reserve’s main policy-making body stimulated a small media frenzy. “Little Alarm Shown at Fed at Dawn of Housing Bust,” headlined the Wall Street Journal. The Washington Post agreed: “As financial crisis brewed, Fed appeared unconcerned.” The New York Times echoed: “Inside the Fed in ‘06: Coming Crisis, and Banter.”
Comments from members of the Federal Open Market Committee (FOMC) now seem misguided. The first 2006 meeting was the last for retiring Fed Chairman Alan Greenspan. Janet Yellen - then…

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“The federal government is the only entity left with the resources to jolt our economy back to life.” - President Barack Obama, Confidence Men, p. 186It’s often been said in various ways by economic thinkers of the classical school that booms and bull markets don’t die of old age, rather they succumb to policy failure. Economies, and by extension stock markets, in this certain sense do best when policy barriers to productive economic activity are light. But with policy from fallible politicians ever present irrespective of political party affiliation, mistakes are…

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Let me build on Charles Krauthammer’s great Friday column, “The GOP’s Suicide March.” Krauthammer argues that just as President Obama’s class-warfare, soak-the-rich mantra started lagging in the polls, some Republicans on the campaign trail started making the case that Mitt Romney’s Bain Capital was involved in nothing more than vulture capitalism, looting companies, and destroying jobs. Keeping class envy alive.
I’m not going to name names, because everybody knows who these Republicans are. Instead, I want to go positive, and commend Mitt Romney himself….

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Today South Carolina voters go to the polls. Two candidates - Newt Gingrich and Ron Paul - are campaigning on the gold standard. Polling, including for South Carolina, shows the gold standard to be a powerful vote getter as my colleague Andresen Blom and I pointed out recently in Roll Call. Both Gingrich and Paul supported gold long before it was cool - each with a record of meaningful support that goes back at least a quarter century.
As it happens, South Carolina has an exceptionally rich history when it comes to an aversion to pure paper money … like Federal Reserve Notes. South…

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Here’s the good news for freedom-loving citizens across the United States: Barack Obama, our current President, will not win re-election this November. He cannot win re-election this November. It is a sure thing, a lock, with no possibility of being wrong.
Now how can I be so sure? To the point of being cocky?
Look no further than Jimmy Carter-the worst U.S. president since Richard Nixon’s character flaws triggered his resignation. Jimmy Carter had a 54% approval rating when 1980 began. Today, (the same point in Obama’s first-term) Obama has an approval rating of just 42%….

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There is little doubt that the current mainstream of economics features an abundance of Great Depression references and observations. It is an easy obsession to explain, with the 1930’s being the last true economic calamity for us to reference. So it is natural human nature to try to define any current conditions that may manifest a new depression as similar to that last example of what one was, and, more importantly, how it formed, lasted and was ultimately overcome. Modern economics, however, has turned the guiding light of the past into rigid laws, rules and models for the…

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For decades, investors have spent countless hours speculating about the Federal Reserve’s agenda on interest rates. Market watchers study every adjective in often-cryptic Fed statements for clues about the outlook for monetary policy. Even the smallest nuances can lead to big swings in global markets.
But the Fed hopes to make this signal decoding less difficult starting next week, when it will lift the shroud of secrecy and release the interest rate projections of the members of the Federal Open Market Committee (FOMC).
This move toward greater transparency has generated a flood of…

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A member of Goldman Sachs’ 1998 new associate class, one of the first things we were exposed to during training was an old deal “tombstone” from the 1950s. Though the names of the financial institutions listed on it were foreign to the vast majority of associates, the message was an essential and sobering one: investment banks have a highly ephemeral quality to them.
There lies one of the first truisms about Wall Street utterly lost on the protesters hanging around Occupy Wall Street encampments the world over. The firms they’ve made the objects of their scorn don’t…

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