Clippings

[Taggart]

[url=http://econ.jhu.edu/people/ccarroll/opinion/CampbellShillerReduxWeb/] Recent Stock Declines:
Panic or the End of “Irrational Exuberance?”[/url]

Christopher D. Carroll
Department of Economics
Johns Hopkins University

November 18, 2008

[Taggart]

Fortune Magazine

8 really, really scary predictions

Dow 4,000. Food shortages. A bubble in Treasury notes. Fortune spoke to eight of the market's sharpest thinkers and what they had to say about the future is frightening.

[Taggart]

Under pressure, private banks move onshore

Fri Dec 12, 2008

By Lisa Jucca

VADUZ, Liechtenstein (Reuters) - Foreign-registered cars dot the underground car park of Liechtenstein's biggest bank, where elevators sweep visitors to top-floor corridors of private meeting rooms.

Liechtenstein, a tiny principality of 35,000 people nestled between Austria and Switzerland, still discreetly advises the very wealthy around mahogany tables, even though it recently relaxed its bank secrecy laws under pressure from the United States.

Now, thanks to a U.S. tax probe into Swiss bank UBS and other pressure, a quiet revolution is brewing in the $7 trillion world of offshore banking, as banks realize that holding untaxed money can ultimately sting them.

[bubbalouie]

Now, thanks to a U.S. tax probe into Swiss bank UBS and other pressure, a quiet revolution is brewing in the $7 trillion world of offshore banking, as banks realize that holding untaxed money can ultimately sting them.

I remember Amanda Lang saying something to the effect that the derivatives portion of UBS is 7 times greater than the GDP of Switzerland. This bank has the potential to bankrupt the country.

[Bylo Selhi]

For those who need some Schadenfreude to deal with their investment losses: America's 25 Biggest Billionaire Losers

[Taggart]

Good article for those reconsidering their risk level and portfolio allocation.

CNN Money

Last Updated: December 19, 2008

Is it all over for stocks?

After a miserable decade, you have to ask whether some of the most basic assumptions about equities are just plain wrong.

[patriot1]

The Madoff Economy

The revelation that Bernard Madoff — brilliant investor (or so almost everyone thought), philanthropist, pillar of the community — was a phony has shocked the world, and understandably so. The scale of his alleged $50 billion Ponzi scheme is hard to comprehen

Yet surely I’m not the only person to ask the obvious question: How different, really, is Mr. Madoff’s tale from the story of the investment industry as a whole?

The financial services industry has claimed an ever-growing share of the nation’s income over the past generation, making the people who run the industry incredibly rich. Yet, at this point, it looks as if much of the industry has been destroying value, not creating it. And it’s not just a matter of money: the vast riches achieved by those who managed other people’s money have had a corrupting effect on our society as a whole

[Taggart]

DECEMBER 20, 2008

Is the Medicine Worse Than the Illness?

The world ran out of trust in 2008 -- but there is no shortage of money because the Fed is printing like mad. It's the wrong approach, with potentially dire consequences, says James Grant.

[bubbalouie]

nice article; thanks taggart

[Peculiar_Investor]

DECEMBER 20, 2008

Is the Medicine Worse Than the Illness?

The world ran out of trust in 2008 -- but there is no shortage of money because the Fed is printing like mad. It's the wrong approach, with potentially dire consequences, says James Grant.

A very good article that offers some sober second thought about how this is all going to play out in the US.

[NormR]

I'm currently enjoying Grant's recent book, Mr. Market Miscalculates

[Doug]

The following is from the website of a Singaporean mutual fund retailer. The website has some useful information, with an Asian point of view (but still in English!)

5 Reasons Why The US Market May Be Past A Bottom
http://www.fundsupermart.com/main/resea ... cleNo=3124

[Taggart]

Toronto Star

A Keynes insight into free markets

Seminal economist's interventionist views fell from grace in the hyperinflation 1970s. They're back

Dec 21, 2008

[ghariton]

Speaking of accelerating spending on infrastructure, from ASCE:

Quantifying the waste present in an operation is an important part of a number of performance improvement initiatives in the architecture engineering construction industry. Contemporary management approaches focus on waste minimization to reduce operating costs and to increase operating responsiveness and flexibility. In construction, studies have been conducted over the past 30 years as part of productivity-improvement efforts that have documented levels of wasted time in construction activities. This paper draws on the methodology of meta-analysis to provide a synthesis of the findings across all of these studies. The analysis reveals that an average of 49.6% of time in construction is devoted to wasteful activity, although this amount is widely varied. Among other things, these results demonstrate considerable potential for improvement in construction through initiatives that reduce levels of wasteful activity.

The danger, of course, is that if infrastructure projects are undertaken in a hurry (Spend it or lose it!!!) the proportion of waste will rise. In some cases, it could go above 100%.

George

[patriot1]

Seminal economist's interventionist views fell from grace in the hyperinflation 1970s.

Has the mainstream press become that economically illiterate?

We had double-digit inflation in the 70's. That's double digits per year.

Hyperinflation is when you have double digits per day.

[parvus]

"Why oh why can't we have a better press corps?" is a frequent feature on Brad DeLong's site.

[Bylo Selhi]

Investing Experts Urge 'Do as I Say, Not as I Do'

If you think it is hard to stick to your New Year's resolutions, consider how some of the investing world's leading experts don't always take their own advice. Often, they diversify by the seat of their pants, fail to adjust their portfolios to changing values, ignore tax issues and take a flier on individual securities even when they know better. Nobody -- and I mean nobody -- is perfect.

Lessons the Market Taught Us in 2008

Every year, the markets provide investors with lessons on the prudent investment strategy. This year’s bear market provided a sufficient number of lessons that it should be considered a “doctoral seminar.”