Joe's Investo-Blog

Since the consumer is now and forever the great engine of all economic activity and growth representing approximately 70% of GDP, doesn’t it make sense to re-liquify the balance sheets of the consumers/taxpayers who are arguably in worse shape than any bank, corporation or local/state government? Read more…

Economics collapse, debt, Economics, economy

Since the Fed increased the monetary base by, oh, about a TRILLION dollars, why aren’t we having massive hyperinflation?

Well, It’s because Read more…

Economics collapse, debt, Economics, economy, monetary policy, The Fed

I recently wrote about the cause of this recession/depression being a collapse of the money supply. The money supply is collapsing because money is literally evaporating with each loan default and bankruptcy and is accelerated by the reverse multiplier effect of fractional reserve banking. Furthermore, given that the collapsing money supply is causing recession, banks are making things worse by doing exactly what banks are supposed to do Read more…

Economics collapse, debt, Economics, economy, monetary policy, The Fed

Let’s take a short detour to make sure we understand what inflation and deflation are. Milton Friedman, the father of the monetarist school of economics said that inflation is always and everywhere a monetary phenomenon. This is usually explained to the layman as “too much money chasing too few goods.”

Inflation is generally regarded Read more…

Economics collapse, debt, Economics, economy, fiscal policy, monetary policy, The Fed

Inflation and deflation are almost always monetary phenomena as are booms and busts, recessions and depressions. The current economic environment has surprised nearly everyone with the sharpness of the decline, it’s suddenness and it’s sheer ferocity. To better understand what is happening in the economy and how it began, I believe it is helpful to understand the nature of modern money and banking, and the central bank’s role. Read more…

Economics collapse, debt, Economics, economy, The Fed

To My Clients:

This past year we continued the full defensive strategy we adopted in late 2007. It has certainly performed well as the stock markets literally collapsed. In all candor, the positive performance in your account is the most gratifying performance of my entire 26 year career. While we continue to stay away from stocks in general, in late November we began Read more…

Economics, Gold, Markets, Portfolio Management Bonds, collapse, Economics, economy, fiscal policy, Gold, monetary policy, performance, Portfolio Management, stock market, strategy, The Fed

I saw an article this morning stating that one of the largest hedge fund investors, also burned by the Bernie Madoff scam, is now demanding of all hedge funds in which it invests, that they begin using independent administrators immediately or risk immediate withdrawal of invested funds: Read more…

Portfolio Management fraud, Portfolio Management, strategy

Yep. There’s yet another cardinal rule that tells you when to get into the market and when to get out (more or less). It has never failed me and following it, helped me avoid entirely the catastrophic markets last year and turn in positive performance for 2008.  You’ve all heard it before but let’s review because it does work. Read more…

Bonds, Economics, Gold, Markets, Portfolio Management, Stocks Bonds, Economics, economy, fiscal policy, Gold, monetary policy, performance, Portfolio Management, stock market, Stocks, strategy, The Fed

I must confess that last years positive portfolio performance is the single most gratifying performance I’ve experienced in my entire 26 year career. I was fortunate to have been able to perceive a deepening credit crunch (thanks to our concerns about the excessive debt and leverage in the economy) and aggressively followed an ancient investment rule, to wit; Read more…

Economics, Gold, Markets, Portfolio Management, Stocks debt, Economics, performance, Portfolio Management, stock market, stock picks, strategy

“Traditional” asset management carries with it one cardinal rule which, by definition, simply does not permit a Bernie Madoff style fraud, ponzi scheme, or any other generic scam. By now most have read about the collapse of the Bernie Madoff hedge fund as roughly $50 billion of investor funds vanished in what turned out to be a gigantic ponzi scheme and the largest scam ever. What the heck is a “hedge” fund anyway and why can you be scammed by them? Simply put, a hedge fund is an investment fund whose clients are “accredited”, meaning they have assets in excess of $5 million and income in excess of $200k. These investors are deemed by the SEC as wealthy enough to know what they are doing and in no need of SEC assistance or protections. Hence, hedge funds are minimally regulated by the SEC if at all. The key is, hedge funds take your money and do whatever they want with it. Due diligence is up to you and you alone. Having said all of that, we all know that gullibility is no respecter of persons, wealthy or not. 

But what about that traditional asset managment rule. It’s as old as business and trade itself and not quite as old as the oldest profession, but it has certainly existed as long as money has. Even in gambling, experienced bettors always know that to protect themselves from a scam or fraud they always follow this one rule Read more…

Portfolio Management fraud, Portfolio Management

Nouriel Roubini is arguably the single most sought after economist today as the world’s leading finanical gloom and doom soothsayer. In an article today he provides his “after the fact” analysis of the roots of the current crises:

Today’s global crisis was triggered by the collapse of the US housing bubble, but it was not caused by it. America’s credit excesses were in residential mortgages, commercial mortgages, credit cards, auto loans, and student loans. Read more…

Economics, Gold, Markets, Stocks collapse, debt, Economics, stock market