Tag Archives: money

Big Banks Win – Derivatives are Back

Once upon a time in the long ago we had banks that lent money to individuals and companies to expand and grow the economy. During the Great Depression lawmakers saw the need to rein in and regulate banks’ activities. The Glass Steagall Act of 1933 ruled that banks could not become involved in selling or trading securities. Separate Investment banks were organized that could underwrite and sell securities but they could not use depositor money.Continue Reading

URGENT-Check Your Energy Portfolio Now!

The OPEC decision not to cut oil production is a watershed event that will change the energy industry for years to come. OPEC Secretary General, Abdalla El Badri stated: “We will produce 30 million barrels a day for the next 6 months and we will watch to see how the market behaves.” Energy Minister, Suhail Al Mazrovei said: “Newcomers to the market who have the highest costs and created the glut should be the ones to determine prices.”Continue Reading

Debt Wipeout: The Great $4.45 Trillion Experiment

Imagine this scenario. Bankers and Mortgage Brokers have gone berserk writing mortgages for people who could not afford to pay them off. Some customers didn’t even make the first payment. Some signatures were forged to get approval. It was an era of pure “greed.” Now, imagine this fictitious conservation between two bankers: “Tom, you know we have a lot of junk here with some of these mortgages.” “Yes, says Bill. Why don’t we just package them together and resell them to hedge funds and pension funds? We’ll use a fancy name like Collateralized Debt Obligations. That way no one will know exactly what we are selling them.” This scheme goes along for a while until a few “sane” investors start thinking: “I don’t think we should buy this stuff.” There are no bids and the market freezes up. Panic sets in and the markets are in freefall. The bankers run to the politicians and beg, hat in hand, for a bailout from Congress. The politicians dream up a fancy name like TARP and give the bankers $787 billion of taxpayer money. However, this is just a drop in the bucket. A whopping $7 trillion of household debt has been wiped out.
Continue Reading

US Grants Two Companies Permission to EXPORT Oil Products

Are you paying too much to fill up your car or truck? Don’t worry our government has the perfect fix to guarantee that prices will keep going higher. Yup, this week the government granted permission for two US oil companies to EXPORT OIL PRODUCTS. You read this right. The government gave two companies permission to EXPORT OIL PRODUCTS.
The two companies are Pioneer Natural Resources (PXD) and Enterprise Products Partners (EPD). The export numbers for this year are between 200,000 and 300,000 barrels, with exports set to double in 2015.Continue Reading

Fed Tools: The US Federal Reserve’s Toolbox

This past week Janet Yellen, Chairwoman of the US Federal Reserve, gave her report on the state of the economy. The theme was “steady as she goes” with only minor adjustments to monetary policy. Here are some highlights from her text:Continue Reading

Investing in Small Cap Stocks

We have a group of stocks that we refer to as “Small Cap.” They are defined as having a Market Cap of between $250,000 and $2 billion. Many are start ups trying to bring a new product or service to market. For example we are seeing many of the biotech stocks in this category. Many of them have a promising new drug but it first must go through rigorous testing by the FDA. This is a lengthy process involving several stages of testing, often lasting up to three years. Only a small group make it through. These become he new “stars” of the investing world and their stocks rise, often very quickly.Continue Reading

Europe Goes to Negative Interest Rates-Investors Beware

Mario Draghi, Chief of the European Central Bank announced this week that it will go to “Negative Interest Rates.” Negative interest rates go below zero. The new rate will be (minus) -.1%. What does all this mean?Continue Reading

Where is the Price of Gold Headed?

The markets have turned in a strange performance over the past several weeks. The numbers on the economy came in weaker than expected with GDP down -.1% in April. Unlike other recoveries, spending growth has decelerated. Each year it takes a step down. This is not the way it should be. In all past recoveries, spending growth increased as the economy grew. Discretionary spending was up but 90% of that was due to inflation, especially in food and energy. Consumers are being forced to spend more. Our US deficit is running at about $17.3 trillion. The US Federal Reserve’s Balance Sheet has grown to $4.9 trillion. Surprisingly, the US stock market made a new all time high in the Dow and S & P. Gold, on the other hand, fell to its lowest level in the past 15 weeks.Continue Reading

Will the Oil Glut Cause a Drop in Price?

The world is awash in oil. From the US to the Mid East oil supply is outstripping demand. It is already causing disruptions in worldwide delivery systems.Continue Reading

Inflation is Rising and Government Can’t Stop It.

You are standing in line at the checkout of your local supermarket. The cashier tallies up your tab and you are shocked at how much it is. It’s way more than last year and even more than last month. It dug a big hole in your weekly paycheck. On the way home you stop to fill your gas tank only to find that the price of gas has gone up 15 cents a gallon since your last fill up. You arrive home and check your mail and find that your landlord just raised the rent. These events are not random. They are happening all across America.Continue Reading