AIG, CDSs and The Next Big Mess
On December 31st I wrote a post titled “CDSs: What Everybody Will Be Talking About In 2008”. As I explained in that post, a CDS is essentially an insurance policy against the default of a bond. An investor might buy…
Stocks Now Priced For Mild Recession
With the Nasdaq and Russell about 20% off their highs and the Dow and S&P 15% off, valuations reasonable (“A Contrarian’s Way To Play Recession”, Barron’s interview with T. Rowe Price Capital Apprecation Fund portfolio manager David Giroux (subscription required), Friday February 8;…
Wait And See Market
That path of least resistance is down as very few appear to be in the mood to buy. Tim Knight compares the day’s action to “Fog”. With almost everybody now forecasting or believing we are in a recession (“Economists Raise…
Looks Like A Top In The Euro
The $/Euro seems to have formed a triple to top around $1.50 with the most recent peak occuring in just the last few days ($/Euro 6 Month Chart). Today, the European Central Bank (ECB) decided to hold rates steady but…
Buffett Said Dollar Will Be “Worthless” Or “Worth Less”?
Dow Jones and CNBC yesterday were reporting that in a speech in Toronto Warren Buffett said that if the current deficit didn’t improve, the dollar would would be “worthless” in 5-10 years. In a hilarious episode on Squawk Box this morning,…
Dreadful News + Dreadful Expectations = Flat/Up Market
December was strong with year-over-year growth in terms of orders in the high teens. But January’s growth was less than we expected with order growth rates of approximately 10%. …….. Therefore our revenue guidance for Q3 fiscal year 2008 including…
Forbes Profiles Old School, Graham-Style Value Investor Walter Schloss
“I can’t say people will get rich on it, but I would rather be safe than sorry.” – Walter Schloss, on his recommendation of insurance company CNA Financial 91 year old Walter Schloss may not be as famous as Warren Buffet but…
Plosser Talks Inflation And The Market Doesn’t Like It
With inflation creeping up, we have to be particularly alert for rising inflation expectations. It is important that inflation expectations remain stable. If those expectations become unhinged, they could rapidly fuel inflation. Moreover, as we learned from the experience of…
Thoughts And Links
As we work through a pretty slow day as investors try to get their bearings after yesterdays huge selloff, here are some things I’m looking at and thinking about: A lot of stocks are cheap. We aren’t dealing with the…
A Diagram Of Recent Fiscal and Monetary Stimulus On The Economy
I recently came across this diagram of recent fiscal and monetary stimulus on the economy in a scholarly paper (hat tip The Big Picture): Propping Up The Economy Graphic. As you can see, everything is under control with the pros…