Tuesday, November 17, 2015

Currency devaluations is a dumb move

I believe trying to boost economic growth by depreciating your currency is one of the most ridiculous ideas. But this is what precisely what Japan, Europe and the U.S. have done. In my view, these people belong to an asylum of crazy people.

Monday, November 9, 2015

Central bank coordinating money printing

I think we live in a world where there is coordinated action by central banks to print money in the U.S., in the EU, in Japan, and of course also the Bank of England. They coordinate monetary policies, and as you know, the yen has depreciated very strongly against the U.S. dollar over the last three years. And I think the Chinese will adjust their currency down somewhat.

Tuesday, November 3, 2015

Monthly Market Commentary - November 2015

Michael Smithson, a social scientist at Australian National University uses this analogy about knowledge and ignorance: “The larger the island of knowledge grows, the longer the shoreline - where knowledge meets ignorance - extends. The more we know, the more we can ask. ....Answers breed questions. Curiosity isn’t merely a static disposition but rather a passion of the mind. ....Mapping the coast of the island of knowledge, to continue the metaphor, requires a grasp of the psychology of ambiguity. The ever-expanding shoreline, where questions are born of answers, is terrain characterized by vague and conflicting information. The resulting state of uncertainty, psychologists have shown, intensifies our emotions: not only exhilaration and surprise, but also confusion and frustration.”

Matthew Winkler, Editor-in-Chief Emeritus at Bloomberg, opines that, “Markets, represent the judgment of buyers and sellers of what’s valuable. By that yardstick, shareholders already have decided that Obamacare is a boon for the American economy.”

The facts, however, seem to repudiate Winkler’s views. According to Bankrate.com, which conducted a survey of 1,000 adults, nearly one in three (29%) American adults (that’s roughly 70 million) have no emergency savings at all - the highest percentage since Bankrate began doing this survey five years ago. What’s more, only 22% of Americans have at least six months of emergency savings (that’s what advisers recommend) - the lowest level since Bankrate began doing the survey.

These findings mirror others - all of which paint a rather unambiguously abysmal picture of Americans’ ability to withstand an emergency. Greg McBride, the chief financial analyst for Bankrate.com, says these low savings reflect that households haven’t seen their incomes ramp up and thus ‘household budgets are tight.’ Plus, he adds ‘people don’t pay themselves first - they wait until the end of the month to save what’s left over and then nothing is left over.’