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The Organic Economy

one of the best articles I have seen in months today in WSJ on "the two economies" in Obama's head. He contends that , to the President, the private economy is not the real one but is instead an intellectual abstraction. Lack of a core understanding of what an organic economy is and what makes it tick seems to be central to the policy choices. Very good read.

Greek Default? Really?

Came across this piece written a few months back on Niall Ferguson's views on Greece. As he points out, over the past 200 years or so Greece has been in and out of default several times. This isn't a novel event. Yet most of the "explanations" today by the talking heads say fear of Greece defaulting (again) are to blame for the lackluster markets. Hmmm, really??

Large Scale Mortgage Refinancing Results

Some good,thoughtful analysis by CBO on the outcomes of large mortgage re-financing programs. It does not surprise me in the least that the analysis concludes that the benefits (gains) of such schemes by a few, roughly equal the losses for the many . We have tried 5 major programs in less than 3 years and still the housing markets continues downward. Maybe it is time to let the market clear and find a bottom so we can move forward .

Tax Policy History

A very interesting and brief piece on the history of soak the rich tax policies . As the author points out , most taxes start out reaching only a few then rapidly expand to reach most.

Classic John Bogle

A truly outstanding article by Jason Zweig in WSJ on the equity markets,buy and hold, diversification and even gold. Bogle is without peer in his steadfastness. As he says diversification is not just the first thing investors should think about, but also the 2nd and 3rd and 4th thing.

Conjour

An article in WSJ gets the award for great phrasing today. Writing about the jobs plan outlined last night by President Obama ,they use the words "the government conjurer". Basically this means the government is acting as a magician , creating something (jobs) out of thin air. Well done.

What Now? (Part Two)

The next issue of our, bi -weekly newsletter, STAT is available. You can access it here. If you'd like to receive our email newsletter, you can click the "Sign up for our Email Newsletter" link on the right of this page.

Because it's Tuesday

This brief article is a good example of what we call "Because it's Tuesday". That is, the explanation for short term price movements (noise) in the markets. In this piece, the writer says "investor anxiety" is the reason. Really? How do they know?

Job Creation

This is an excellent article by Caroline Baum on the role of government in job creation. As she states "the job of government is to provide an environment in which the private sector creates this (jobs)". Well put.

Debt & Savings

A very good summary of the debt issues facing those nearing retirement age. If anything, the percentages of folks in their 60's with substantial mortgage debt exceed those outlined in the article. 20 years ago almost none of our clients that age had mortgages, today it is the rule. As the article points out, this age group in general has too much debt and too little savings. Not much of a formula for an enjoyable retirement.

Hysteria and Hyperbole

This is a good example of the near hysteria of journalists "reporting" on the markets. The writer makes some good points but sets them within the context of the markets coming off the worst August in a decade (a good deal of volatility in both directions) and entering historically the worst month of the year. Why does any of that really matter except we need the volatility in order to accrue the long term returns. The "what to do now" syndrome seems to dominate the media at present much to the detriment of most investors.

Infrastructure Spending and Priorities

An interesting 2008 chart from NYT on infrastructure spending. Looks like $ is not the problem, politics is (big surprise). Economics centers around choices. When we make poor choices, resources are allocated improperly to one area to the detriment of another area.

Of Men and Markets

Professor Shiller provides an interesting perspective in this article. As he notes, despite the evidence to the contrary, many investors practice the "beauty contest" approach.