…Calmly observing the changing world

There is an entire (extremely profitable) business devoted to selling insurance against the default of bonds.  This allows an investor to purchase a riskier bond than he otherwise would (say, a Italian bond), and still feel safe – since he purchased insurance on his bond. This insurance is known as a credit default swap that we [...]

One of the realities of life is that debt skews a relationship.  Mostly because the lender wants his money back, and assurances of repayment only work for so long. And if the lender is Germany and the debtor is Greece, the time has come for something even more drastic in Germany’s eyes.  Jokes about island [...]

The whole financial news community is eager, if sometimes cautious, to call a top in gold.  ”The bubble is bursting!”, they long to say.  Nevermind that these are the same people who thought gold was overpriced at $400. What is that gold going to do for you anyway? Just listen to Charles L. Sizemore complain: [...]

The financial world is split between the people who “get it” and those who “don’t get it.”  Which side is which depends on whom you ask, but one thing is sure, no one has any respect for the rating agencies. And there has been plenty of investor ridicule of the agencies lately, as S&P shown [...]

I could write more than one treatise on what is and isn’t money – and certainly many people smarter than I have tried to do this in the past.  There is a lot to learn from such an exercise, but it largely remains just that – an exercise – and not something that impacts daily [...]

One of the supposed roles Saudi Arabia uniquely holds, is that in time of crisis, it obligingly increases the production of oil.  It has recently promised to do just that.  In a perfect world, turmoil in the Middle East that causes a supply disruption in oil would be offset by increased Saudi production. Unfortunately, reality [...]

The lore of bull markets dictates that before the end of the bull market in gold there will be a wild mania, where the price soars to astounding heights in bubble of epic proportions.  Of course, it’s difficult to tell when you’re in the bubble – which is a bit fun since ignorant experts from [...]

Despite the reputation of the weekly unemployment report as not particularly relevant on a weekly basis, this week’s report has gotten a lot of traction.  Unemployment numbers are down 34,000!  The recovery has finally kicked into gear – jobs for all are just around the corner! Of course, the cheering of last week’s data is [...]

No, the title doesn’t suggest politics – although it easily could.  Something far scarier is afoot. Today, the federal government conned investors into buying bonds which pay negative 0.55%.  There is, of course, more to the story, as these were inflation-protected securities (TIPS). Investors were hungry today for the bonds, pushing the prices up – [...]

These days, investors are being diligent to try to find a solid investment.  Well, so much for that – but if you can’t beat ‘em, join ‘em.  So, for the non-small investor, one of the closest things to a sure bet would seem to be shorting Greek bonds. The government has never shown restraint.  The [...]