Article archive
27 Jan 2012 One Cure for Accounting Shenanigans
Auditors work for the same company for so long that instead of being independent, they end up co-dependent.
Auditors work for the same company for so long that instead of being independent, they end up co-dependent.
25 Jan 2012 Wells Fargo: The Bank That Works
Wells does what banks are supposed to do: take deposits and then lend the money back out. Interest margin drives half its revenues. Fees from mortgages, investment accounts and credit cards generate the other half. “I couldn’t care less about league tables,” says Stumpf, throwing out a line custom-made for the Wells aphorism book. “I’m more interested in kitchen tables and conference room tables.”
Wells does what banks are supposed to do: take deposits and then lend the money back out. Interest margin drives half its revenues. Fees from mortgages, investment accounts and credit cards generate the other half. “I couldn’t care less about league tables,” says Stumpf, throwing out a line custom-made for the Wells aphorism book. “I’m more interested in kitchen tables and conference room tables.”
22 Jan 2012 The High Price of Safety
Over the past three years, $172 billion has been withdrawn from U.S. equity mutual funds, while $628 billion has flowed into bond funds. Ten year U.S. treasuries yield less than 2%, and yields on six-month German sovereign debt are actually negative -- investors are willing to deliberately lose a small amount of money lending to Germany because they're so fearful of potentially losing even more.
Over the past three years, $172 billion has been withdrawn from U.S. equity mutual funds, while $628 billion has flowed into bond funds. Ten year U.S. treasuries yield less than 2%, and yields on six-month German sovereign debt are actually negative -- investors are willing to deliberately lose a small amount of money lending to Germany because they're so fearful of potentially losing even more.
22 Jan 2012 Falling prices fuel natural gas demand
Historically low natural gas prices, resulting from a glut in global reserves, have caused home heating bills to plummet to levels not seen in a decade. Experts anticipate the prices dropping further before they self-correct, with expectations that a long-term surplus could keep prices cheap for years.
Historically low natural gas prices, resulting from a glut in global reserves, have caused home heating bills to plummet to levels not seen in a decade. Experts anticipate the prices dropping further before they self-correct, with expectations that a long-term surplus could keep prices cheap for years.
17 Jan 2012 Flat-panel displays
REMEMBER the old joke about the dim tailor who takes a loss on each piece of clothing but hopes to make it up in volume? In the business of flat-panel screens for televisions, it is not a joke.
REMEMBER the old joke about the dim tailor who takes a loss on each piece of clothing but hopes to make it up in volume? In the business of flat-panel screens for televisions, it is not a joke.
15 Jan 2012 Inside the Fed in 2006: A Coming Crisis, and Banter
The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”
But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast.
The officials laughed about the cars that builders were offering as signing bonuses, and about efforts to make empty homes look occupied. They joked about one builder who said that inventory was “rising through the roof.”
But the officials, meeting every six weeks to discuss the health of the nation’s economy, gave little credence to the possibility that the faltering housing market would weigh on the broader economy, according to transcripts that the Fed released Thursday. Instead they continued to tell one another throughout 2006 that the greatest danger was inflation — the possibility that the economy would grow too fast.
15 Jan 2012 The stock market chart your broker won’t show you
Start with that 9.2 per cent return, take out a 2 per cent fee for the management of your mutual funds, pay a quarter of the gains in tax, and then see inflation run at 4.1 per cent and you’re left with a return of about 1.3 per cent. That’s not much to live on despite the market’s apparently strong results before all these factors are taken into account.
Start with that 9.2 per cent return, take out a 2 per cent fee for the management of your mutual funds, pay a quarter of the gains in tax, and then see inflation run at 4.1 per cent and you’re left with a return of about 1.3 per cent. That’s not much to live on despite the market’s apparently strong results before all these factors are taken into account.
14 Jan 2012 Why Warren Buffett Disdains The Private Equity Crowd
The Oracle of Omaha has never retreated from his long standing revulsion at the Leveraged Buyout Crowd who tried to camouflage their profession by calling themselves The Private Equity Crowd. He and his curmudgeon partner Charlie Munger also show their disdain for Mitt Romney’s wheeling and dealing at Bain & Co. by calling the Private Equity Crowd The Two and Twenty Crowd for the obscene 2% management fees and 20% carried interest The Private Equity Crowd demand for their services.( A recent report said Bain even charged a 30% carried interest .
The Oracle of Omaha has never retreated from his long standing revulsion at the Leveraged Buyout Crowd who tried to camouflage their profession by calling themselves The Private Equity Crowd. He and his curmudgeon partner Charlie Munger also show their disdain for Mitt Romney’s wheeling and dealing at Bain & Co. by calling the Private Equity Crowd The Two and Twenty Crowd for the obscene 2% management fees and 20% carried interest The Private Equity Crowd demand for their services.( A recent report said Bain even charged a 30% carried interest .
14 Jan 2012 Should Greece Devalue?
Defenders [of devaluation] think that devaluing would fool workers into a bout of “competitiveness,” as if people wouldn’t realize they were being paid in Monopoly money. If devaluing the currency made countries competitive, Zimbabwe would be the richest country on Earth. No Chicago voter would want the governor of Illinois to be able to devalue his way out of his state’s budget and economic troubles. Why do economists think Greek politicians are so much wiser?
Defenders [of devaluation] think that devaluing would fool workers into a bout of “competitiveness,” as if people wouldn’t realize they were being paid in Monopoly money. If devaluing the currency made countries competitive, Zimbabwe would be the richest country on Earth. No Chicago voter would want the governor of Illinois to be able to devalue his way out of his state’s budget and economic troubles. Why do economists think Greek politicians are so much wiser?
13 Jan 2012 The World's Biggest Hedge Fund
The world's largest hedge fund paid $79.3 billion dollars to its main investor last year, as announced to the press and reported by the Wall Street Journal this morning.
The world's largest hedge fund paid $79.3 billion dollars to its main investor last year, as announced to the press and reported by the Wall Street Journal this morning.
12 Jan 2012 Out of focus
THE digital camera had a serial number of "0000001" etched on its case, your correspondent recalls. The Kodak Digital Camera System (DCS) 100 he walked around with in 1991 was, quite literally, the first commercially available digital single-lens reflex (DSLR) camera. The device had a charged-coupled device (CCD) sensor array retrofitted on the back of a Nikon F3 body. It came with a shoulder-pack containing a computer, 200MB hard drive to store a 100 or so images, enormous batteries and a tiny LCD screen for viewing stored images. The lot weighed about 7kg. In 1991 Kodak was a decade ahead of its time. Now, with a looming bankruptcy filing, it looks a decade behind.
THE digital camera had a serial number of "0000001" etched on its case, your correspondent recalls. The Kodak Digital Camera System (DCS) 100 he walked around with in 1991 was, quite literally, the first commercially available digital single-lens reflex (DSLR) camera. The device had a charged-coupled device (CCD) sensor array retrofitted on the back of a Nikon F3 body. It came with a shoulder-pack containing a computer, 200MB hard drive to store a 100 or so images, enormous batteries and a tiny LCD screen for viewing stored images. The lot weighed about 7kg. In 1991 Kodak was a decade ahead of its time. Now, with a looming bankruptcy filing, it looks a decade behind.
10 Jan 2012 Climbing walls of worry
This is not a market driven by optimism, it's a market that has had to overcome several major bouts of fear and trembling in recent years, and it's still plenty worried about the future.
This is not a market driven by optimism, it's a market that has had to overcome several major bouts of fear and trembling in recent years, and it's still plenty worried about the future.
05 Jan 2012 Gold bulls driven by emotions
“The reason why people buy gold seems to be the same reason why people stick with old religions. Anything people have stuck with for thousands of years must have some merits, right?”
“It is all about what stories are believed today, and today, while it belies any sort of commonsense that gold is worth twice as much as it was two years ago, this is what people are believing in.”
“The reason why people buy gold seems to be the same reason why people stick with old religions. Anything people have stuck with for thousands of years must have some merits, right?”
“It is all about what stories are believed today, and today, while it belies any sort of commonsense that gold is worth twice as much as it was two years ago, this is what people are believing in.”
05 Jan 2012 Why gas mileage has barely budged since 1980
In a new paper for the American Economic Review, building off his earlier research (PDF), Knittel calculates that automakers actually boosted vehicle fuel efficiency a whopping 60 percent between 1980 and 2006. Engine technology got better by leaps and bounds. It’s just that most of those improvements went toward making cars bigger and more powerful — and, as a result, all those advances barely increased gas mileage.
In a new paper for the American Economic Review, building off his earlier research (PDF), Knittel calculates that automakers actually boosted vehicle fuel efficiency a whopping 60 percent between 1980 and 2006. Engine technology got better by leaps and bounds. It’s just that most of those improvements went toward making cars bigger and more powerful — and, as a result, all those advances barely increased gas mileage.
04 Jan 2012 Kodak Teeters on the Brink
The 131-year-old company is still making last-ditch efforts to sell off some of its patent portfolio and could avoid Chapter 11 if it succeeds, one of the people said. But the company has started making preparations for a filing in case those efforts fail, including talking to banks about some $1 billion in financing to keep it afloat during bankruptcy proceedings, the people said.
The 131-year-old company is still making last-ditch efforts to sell off some of its patent portfolio and could avoid Chapter 11 if it succeeds, one of the people said. But the company has started making preparations for a filing in case those efforts fail, including talking to banks about some $1 billion in financing to keep it afloat during bankruptcy proceedings, the people said.
04 Jan 2012 On debt, the conventional wisdom vs. the markets
It's cheaper for the U.S. to finance its debt today than it was when we last had surpluses. For all that Washington is sure we're borrowing too much, the signal from the markets is that we're borrowing too little, that they wish we would borrow more.
It's cheaper for the U.S. to finance its debt today than it was when we last had surpluses. For all that Washington is sure we're borrowing too much, the signal from the markets is that we're borrowing too little, that they wish we would borrow more.
04 Jan 2012 A market that even a skeptic can like
"I would say that this is the first time in a long time that we've been able to construct a portfolio of high-quality companies at very attractive valuations," Mr. Maida said. Translation for non-hardcore investors: There are some good companies available right now at attractively low prices.
Mr. Maida is an investment industry veteran who has worked for the Trimark family of mutual funds as well as Hamblin Watsa Investment Counsel and the Ontario Municipal Employees Retirement System (OMERS). He's a value investor, which means he looks for companies that are trading below their true value.
"I would say that this is the first time in a long time that we've been able to construct a portfolio of high-quality companies at very attractive valuations," Mr. Maida said. Translation for non-hardcore investors: There are some good companies available right now at attractively low prices.
Mr. Maida is an investment industry veteran who has worked for the Trimark family of mutual funds as well as Hamblin Watsa Investment Counsel and the Ontario Municipal Employees Retirement System (OMERS). He's a value investor, which means he looks for companies that are trading below their true value.
03 Jan 2012 "Decline of Manufacturing" is Global Phenomenon: And Yet the World Is Much Better Off Because of It
When we hear claims that "nothing is made here anymore," it's not really the case that somebody else is making the stuff Americans used to make as it is the case that we (and others around the world) just don't manufacture as much "stuff" any more in relation to the growing levels of national income.
When we hear claims that "nothing is made here anymore," it's not really the case that somebody else is making the stuff Americans used to make as it is the case that we (and others around the world) just don't manufacture as much "stuff" any more in relation to the growing levels of national income.
02 Jan 2012 Natural Gas Ends 2011 at 27-Month Low
Prices for the commodity have been under pressure over the last couple of years, as new drilling techniques unlocked vast new stores of natural gas from shale formations and other so-called unconventional reservoirs.
Prices for the commodity have been under pressure over the last couple of years, as new drilling techniques unlocked vast new stores of natural gas from shale formations and other so-called unconventional reservoirs.
31 Dec 2011 Big shift for gas-guzzling nation: fuels are top US export; oil imports still world’s highest
Measured in dollars, the United States is on pace this year to ship more gasoline, diesel and jet fuel than any other type of export, according to government records dating back to 1990.
Measured in dollars, the United States is on pace this year to ship more gasoline, diesel and jet fuel than any other type of export, according to government records dating back to 1990.
31 Dec 2011 It's never been safer to fly; deaths at record low
The past 10 years have been the best in the country's aviation history with 153 fatalities. That's two deaths for every 100 million passengers on commercial flights, according to an Associated Press analysis of government accident data.
The past 10 years have been the best in the country's aviation history with 153 fatalities. That's two deaths for every 100 million passengers on commercial flights, according to an Associated Press analysis of government accident data.
30 Dec 2011 Energy Charts of the Year
"Energy Charts of the Year" that help tell the story of the "shale revolution" that is transforming America's energy outlook, with major, positive implications for U.S. energy security, economic growth and job creation, a manufacturing revival, and even government revenues.
"Energy Charts of the Year" that help tell the story of the "shale revolution" that is transforming America's energy outlook, with major, positive implications for U.S. energy security, economic growth and job creation, a manufacturing revival, and even government revenues.
29 Dec 2011 What I Like About Scrooge
Scrooge has been called ungenerous. I say that's a bum rap. What could be more generous than keeping your lamps unlit and your plate unfilled, leaving more fuel for others to burn and more food for others to eat? Who is a more benevolent neighbor than the man who employs no servants, freeing them to wait on someone else?
Scrooge has been called ungenerous. I say that's a bum rap. What could be more generous than keeping your lamps unlit and your plate unfilled, leaving more fuel for others to burn and more food for others to eat? Who is a more benevolent neighbor than the man who employs no servants, freeing them to wait on someone else?
28 Dec 2011 Natural gas fueling plans may spur vehicle growth
Plan for more fueling stations could add momentum to slow growth of natural gas vehicles in US.
Plan for more fueling stations could add momentum to slow growth of natural gas vehicles in US.
27 Dec 2011 The Next 5 in 5
At the end of each year, IBM examines market and societal trends expected to transform our lives, as well as emerging technologies from IBM's global labs, to develop a multi-year forecast called The Next 5 in 5. IBM predicts that over the next five years technology innovations will change the way we work, live and play in the following ways:
At the end of each year, IBM examines market and societal trends expected to transform our lives, as well as emerging technologies from IBM's global labs, to develop a multi-year forecast called The Next 5 in 5. IBM predicts that over the next five years technology innovations will change the way we work, live and play in the following ways:
27 Dec 2011 Now That's Performance Art
Every year at this time, fund managers dump losers and chase winners to pump their own performance. Don't be taken in.
Every year at this time, fund managers dump losers and chase winners to pump their own performance. Don't be taken in.
26 Dec 2011 Brazil economy overtakes UK, says CEBR
Brazil has overtaken the UK as the world's sixth largest economy, an economic research group has said.
CEBR World Economic League Table
Brazil has overtaken the UK as the world's sixth largest economy, an economic research group has said.
CEBR World Economic League Table
| Rank | 2011 | 2020 forecast |
| 1 | US | US |
| 2 | China | China |
| 3 | Japan | Japan |
| 4 | Germany | Russia |
| 5 | France | India |
| 6 | Brazil | Brazil |
| 7 | UK | Germany |
| 8 | Italy | UK |
| 9 | Russia | France |
| 10 | India | Italy |
26 Dec 2011 ‘Tight oil’ holds promise of ending U.S. oil imports
Analysis by Dallas consulting engineers Turner, Mason & Co. suggests that by 2014 or 2015, the massive Gulf Coast refinery complex will no longer need to import light sweet crude from places like Saudi Arabia. By 2020, that part of the U.S. could be completely off Middle Eastern crude.
Analysis by Dallas consulting engineers Turner, Mason & Co. suggests that by 2014 or 2015, the massive Gulf Coast refinery complex will no longer need to import light sweet crude from places like Saudi Arabia. By 2020, that part of the U.S. could be completely off Middle Eastern crude.
23 Dec 2011 US Senate Economic Illiteracy
Low prices are good. The more the competition the better. Yet economic fools including US senators think otherwise.
Senator Snowe's message is economic idiocy at its finest. She wants everyone to pay more for merchandise to protect small businesses. For starters, people have enough problems with high gas prices, high food prices, high debt, and shrinking real wages. Consumers need to save every cent they can. Competition from Amazon is a godsend.
Effectively Senator Snowe is asking everyone suck up to protect mom-and-pop businesses.
We need more Amazons not less. Every dollar consumers save on clothing, electronics, books, etc is another dollar that can go to food, shelter, and gasoline.
Speaking of which, more online shopping would help cut down on gasoline usage, and in case no one has noticed the world is running out of cheap energy sources.
Low prices are good. The more the competition the better. Yet economic fools including US senators think otherwise.
Senator Snowe's message is economic idiocy at its finest. She wants everyone to pay more for merchandise to protect small businesses. For starters, people have enough problems with high gas prices, high food prices, high debt, and shrinking real wages. Consumers need to save every cent they can. Competition from Amazon is a godsend.
Effectively Senator Snowe is asking everyone suck up to protect mom-and-pop businesses.
We need more Amazons not less. Every dollar consumers save on clothing, electronics, books, etc is another dollar that can go to food, shelter, and gasoline.
Speaking of which, more online shopping would help cut down on gasoline usage, and in case no one has noticed the world is running out of cheap energy sources.