August, 2008

Here's the official Allianz press release.

Here's the official Allianz press release.

Roger Nusbaum submits: A reader asked me to weigh in on the coming election and whether I think it will be market moving.First, a hysterical quote from Alan Ableson's column attributed to Tom Gallagher from ISI:

Roger Nusbaum submits: Here is the list of currency ETFs filed for by WisdomTree, according to IndexUniverse:

Here's a little something sent in by one of our readers, a young City investment banker who has temporarily left the industry to undertake a period of further study.

John M. Mason submits: In this post, I attempt to respond to some comments that were written concerning my August 25 post.  The comments were specifically related to the fact that uncertainty always exists, as well as to whether or not the markets work. I wrote the post of August 25 because I believe that uncertainty is greater now than it has been for a very long time. Consequently, the volatility of markets is extreme and will continue to be extreme as long as this level of uncertainty continues to exist. I believe that this should be a consideration in the current business and investment decisions being made.

Naga Prasad submits:Financial markets are facing turmoil all over the world and it won't be over until major currencies stop swaying up and down. Commodities, stocks and bonds are not independent - financial market moves are governed by several factors, including export-import, growth rate, leading economic indicators, currencies, industrial production, unemployment, monetary policies and geopolitical events.Among these factors, currency rates play a salient role in money markets, which was clear in the past few weeks. The Euro and USD as usual are playing a north – south game, which has left financial markets in a state of uncertainty.

The real cost of government is measured by what government spends, not by the receipts labeled taxes. The goods and services it buys are not available for other use…Suppose government spends $400 billion and raises $350 billion in funds labeled taxes. Who do you suppose pays for the $50 billion difference? The tooth fairy? Hardly. You do.
-Milton Friedman
Past Quotes Entirely Relevant to Investing

The Sovereign Society submits:By Eric Roseman I still like U.S. stocks compared to most foreign markets over the next 12 months.Complete Story »

Brian A. Davis submits:Friday morning, the Bloomberg ticker noted two stories which caught my attention. One read "Justice Department seeks to curb prosecution of white collar crimes," Which suggests the campaign contributions are going to come to a screeching halt unless the fat cats on Wall Street, and those who benefited from the financial meltdown will not contribute to campaigns unless the heat is taken off of them pretty darn quick!

Prieur du Plessis submits: The gyrations of financial markets ahead of the Labor Day weekend tested the patience of bulls and bears alike. As big swings took place in thinly-traded markets, I was reminded of Albert Schweitzer’s words: As we acquire more knowledge, things do not become more comprehensible but more mysterious.

J Clinton Hill submits:Corporate Profits for 2Q 2008 reached $1.361 trillion vs. $1.348 trillion. 2Q profits were up year-over-year 3.9% while 1Q profits came in -27.5%. On an annualized basis 2Q profits decreased -5.9% while 1Q was off -3.1% (see Chart #1 below). This is all pretty much common knowledge but it is worth noting that the annualized rate of profit declines is approaching a bottom not seen since 2001 - 2002. Whether profits will decline to the negative levels last seen in 1998 is unknown but recent historical patterns suggest a bottom could be nearby.

J Clinton Hill submits:Corporate Profits for 2Q 2008 reached $1.361 trillion vs. $1.348 trillion. 2Q profits were up year-over-year 3.9% while 1Q profits came in -27.5%. On an annualized basis 2Q profits decreased -5.9% while 1Q was off -3.1% (see Chart #1 below). This is all pretty much common knowledge but it is worth noting that the annualized rate of profit declines is approaching a bottom not seen since 2001 - 2002. Whether profits will decline to the negative levels last seen in 1998 is unknown but recent historical patterns suggest a bottom could be nearby.

In 1844, 23-year-old Henry Lehman, the son of a cattle merchant, emigrated to the United States from the town of Rimpar, in the German state of Bavaria. He settled in Montgomery, Alabama, where he opened a dry goods store, 'H. Lehman'. In 1847, following the arrival of Emanuel Lehman, the Firm became 'H. Lehman and Bro'. With the arrival of their youngest brother, Mayer Lehman, in 1850, the Firm changed its name again and 'Lehman Brothers' was founded.

Sean Maher submits:I'm a fan of horror films; it's the toughest genre to get right. The key is not to reveal the chainsaw wielding psychopath/demon/vampire too early, but intimate his presence gradually, building the suspense until he terrifyingly bursts on screen in the final act, splattering gore as he goes. If the director gets it right, by this point some delicate souls will be running for the exits and most brave enough to remain will be distinctly queasy. For those Wall Streeters heading back from the Hamptons next week (and given the record low NYSE volumes in recent days, the beaches must be packed), I suspect those with a taste for gore will have quite a spectacle to enjoy. Here are some thrilling plot twists while you were away:

Bob Lang submits:Time is something very precious to us all.  Time heals wounds, and puts distance past bad events.  For the most part, we are not dismalists or doomsdayers (some do fit that bill), and we always try to find a silver lining from every dark cloud. For the economy, there is no darker cloud that the credit/housing crisis.  It's been nagging the markets for nearly two years.  We won't go into the gory details, but we know the collateral damage that has been caused.  Will we recover from such a bad trip?  No doubt about it.  But I would argue that it'll take time - and plenty of it - before a sustained recovery is at hand.  The more time is between the bad (choose your timeframe - last August, January, March or July 2008), the better things will look.