Corporate Profits Higher

This Bloomberg article provides some much needed good news about corporate profits this year. Ultimately stock prices reflect the profits so this is positive news indeed.

The Biggest Obstacle to Retirement

I saw this short/simple piece and shouted YES! Non- mortgage debt is a tremendous problem in retirement. Heck, 20 years or so ago very few retirees had any debt, mortgage or otherwise. Sure, saving for retirement is generally paltry, expectations unrealistic and timeframes too short but debt indeed is a big issue that can't be easily overcome.

Puffery Personified

This article from the WSJ today quite correctly points out that in the quest to "fix" whatever went wrong, the Financial Regulation bill doubles down by giving the Fed, SEC,FDIC (and creates another agency just for fun) more power . None of these have exhibited anything resembling competency in this "crisis" but never mind these small details. The glaring omission is nary a mention of the real threat to the financial system- the GSE's Fannie Mae and Freddie Mac. The number of unintended consequences per page is likely greater than one (the bill is 2000+ pages of course).

The Human Condition

A very good article in WSJ on how our brains often work against us when making investment decisions. All told, the discipline that we bring to client relationships allows us to temper these sometimes errant urges.

Regulation- the answer or the problem?

This is an even handed article in WSJ today mostly on regulation and the oil spill but also mentions the financial "reform" regulation bill in Congress. As has been said, we have the best government that (the lobbyist) money can buy. Over 1400 former Congressional aides and members themselves are involved in lobbying the current financial regulation legislation. Any wonder the mire just gets thicker. The article makes a very prescient point about the sheer complexity of the regulations and laws (particularly those in the past year or so- mostly 2000 page monsters) and how this works at cross purposes.

The Real Jobs Report

Saw this somewhat light hearted piece today on the May jobs report . Loved the "fake" and "Make believe" description of these reports. The month to month numbers (like the month to month stock market) are very "noisy" and therefore hard to discern much meaning. That aside, even a cursory look at what is behind the numbers portends a disturbing reality. Over 40% of those unemployed have been so for more than 6 months. I suspect some/most of these people may never work again at least in the realm that they were previously. This so called structural unemployment may be a big headwind for the economy for many years to come.

George Will on Tax Reform

Sometimes the obvious has to be "beyond obvious" before change can occur. Our 70,000 page tax code is one such example and George Will has a short article on the topic in Newsweek. Senator Gregg who is referenced in the piece is one of a small handful in the political class that may actually understand the tax/budget axis. Good food for thought.

We continue to pay attention to the scheduled tax hikes for dividends and capital gains in particular that come January 1,2011 . All things equal it seems worthwhile to consider pulling gains and other income forward which will skew (negatively) 2011 economic numbers.