Tuesday, November 29, 2022
A recent article on mortgage-backed securities (MBS) had me going, “huh?” The story covers MBSs being very popular when mortgage rates were less than 3%, but now with rates over 7%, large, institutional buyers are staying away. That’s one reason why mortgage rates are so high, despite MBSs in theory being more profitable today. That’s […]
The latest bank earnings season highlighted the difference between the banks that rely on deal-making (Goldman Sachs and Morgan Stanley) versus those that are deposit banks that rely more on U.S. consumers and businesses (Bank of America, JPMorgan, Wells Fargo, Citibank). Deposit banks are in a generally better position to earn greater margins on the […]
With interest rates rising, your cash holdings could now earn you some interest income. Again, they could—but they may not be doing so. Many financial institutions are not passing along higher interest to customers holding cash. You should check to see how much your money earns, and if it’s a pittance, look at some alternatives. […]
I am always hunting for ideas that can boost portfolio returns for individual investors. I read, I ponder, I imagine, I study, and I test these ideas. Many of them end up in the junk pile as good ideas gone bad—these are usually the ones that sounded the most exciting when I first had or […]
I am a huge fan of special situation investing. Situations that involve unusual buying activity by insiders or corporate activists, merger arbitrage and bidding wars, and other unusual events can offer the opportunity for outsized profits no matter what the markets might do. Sir John Templeton once remarked that it is impossible to beat the […]
Enough is enough. I get it—European bankers are crooks, thieves, and charlatans. The European Central bank has made a mess of everything. The bankers take too many naps and spend too long on vacation. What difference does it make anyway? The Europeans who don’t sweat to death this summer will freeze to death when Putin […]
Over the past year, making money in the stock market has been tough. Inflation is spinning out of control, the Federal Reserve has been raising interest rates for the first time in years, and big tech has finally begun to fall out of favor. Look back at what would have happened if you had put […]
In a recent interview with Chuck Butler, we concluded, short of dumping the FED and a ballot box revolution, inflation is here to stay. Individual investors can control where/how we invest to protect our life savings. Chuck summed up his feeling about a market fraught with risk: “I recently had some bonds mature. These maturities brought me […]
Since the 2008 bank bailouts, readers regularly ask, “what the hell is going on?” I’m not an economist, but I’ll try to explain things – and it isn’t pretty. A major plank in problem-solving is, “Look at the consequences of your decisions, don’t let your solutions cause bigger problems.” Since Clinton repealed the Glass-Steagall act, the […]
Since the repeal of the Glass-Steagall Act in 1999, the role of the Federal Reserve has changed. The Fed used to be owned by banks while high-risk investment houses were separated and not considered part of the banking system. Since the repeal, banks have consolidated where the top four banks now account for 50% of all US […]
