• Sundown of a Theory

    David Stockman, President Reagan’s former budget director, wrote an impassioned editorial in the New York Times this past Sunday essentially predicting financial death for the United States. While the points about the sluggish recovery from the financial crisis of 2008 are essentially correct, Mr. Stockman glosses over the risks faced in 2008 of a much… » read more

  • Tax Update

    The American Taxpayer Relief Act of 2012 was a politically attractive compromise for both parties that addressed the income tax most on voters’ minds but delayed for two months the more difficult issue of the budget cuts outlined in the Budget Control Act of 2011. Thus the act provided clarity to the revenue half of… » read more

  • Post 2012 Election

    The 2012 election re-elected President Obama and did not significantly alter the composition of Congress.  Republicans still control the House while the Democrats retain control of the Senate.  This leaves the same actors to negotiate a way to get the budget deficit under control while averting the recession that would result from a full implementation… » read more

  • Average Hedge Fund Manager Returns

    In January this year Simon Lack published a book entitled The Hedge Fund Mirage: The Illusion of Big Money and Why it’s Too Good to be True. The book makes the not unreasonable claim that the popularity of hedge funds, which began in the early 2000s after the crash of the technology bubble, resulted in… » read more

  • The Crystal Ball for 2012?

    “Gatorade!” “What does an alligator get on welfare?” -Carmac the Magnificent (Johnny Carson) Recently, an Analyst at Bank of America predicted an 8% decline in the S&P 500, a market bottom and then a rally to a trading range of 1,300 to 1,350. The analyst uses what she calls the “Decennial Pattern” to drive her… » read more

  • Market decline and US downgrade

    After a tumultuous week that saw the worst single-day stock declines since the panic of 2008-2009, S&P capped the experience by downgrading US Treasuries from AAA to AA+.  S&P, of course, does not know anything that the market does not already know – that a dysfunctional political process will likely fail to deliver on the… » read more

  • Debt Crisis

    The partisan wrangling over the US debt limit has begun to spook the stock and bond markets.  The US Ten Year Treasury Bond yield increased slightly above 3.0% – a modest increase from its July low of 2.88% – and the S&P 500 has declined about 1.5%.  While this is indicative of some concern by… » read more