The Death of Equities Redux

Monday, July 30th, 2012

by Patrick Rudden, AllianceBernstein

A famous Business Week article, “The Death of Equities,” concluded, “Today, the old attitude of buying solid stocks as a cornerstone for one’s life savings and retirement has simply disappeared.” Sound familiar? The article was published in August 1979.

The Business Week article discusses how, with “stocks averaging a return of less than 3% throughout the decade,” investors were fleeing equities in favor of cash and real assets such as property, gold and silver. “Further,” it states, “this ‘death of equity’ can no longer be seen as something a stock market rally—however strong—will check. It has persisted for more than 10 years through market rallies, business cycles, recession, recoveries and booms….For better or worse, then, the US economy probably has to regard the death of equities as near-permanent condition.”

The primary economic problem back then was high inflation, which had devastated returns for  stocks and bonds but had greatly buoyed the value of real assets such as gold. Of course, Paul Volcker, then Chairman of the Federal Reserve, was soon to unleash his war on inflation, which set the stage for a prolonged period of strong equity and bond market returns.

But the article says other factors contributed to the death of equities: “The institutionalization of inflation—along with structural changes in communications and psychology—has killed the U.S. equity market for millions of investors. We are all thinking shorter term than our fathers and our grandfathers.”

Inflation (at least of the consumer-price variety) has not been the problem it was in the 1970s, but I would argue that structural changes in communications and psychology have been, if anything, more severe. We are all subject sooner and sooner to more and more information. And, as a consequence, we are thinking shorter term than our fathers and grandfathers and, I should add, mothers and grandmothers.

Equities are no more likely to be dead now than they were in August 1979. Indeed, the expected return advantage of stocks versus government bonds is unusually high at present, in our opinion. However, shorter-time horizons may require us to revisit our investment portfolios. In addition to longer-horizon strategies like value and growth, investors may need to consider shorter-horizon strategies, such as equity income or low-volatility stocks.

Finally, for those investors worried about the return of the inflation bogeyman, holding some exposure to real assets is a good insurance policy.

The views expressed herein do not constitute research, investment advice or trade recommendations and do not necessarily represent the views of all AllianceBernstein portfolio-management teams.

Patrick Rudden is Head of Blend Strategies at AllianceBernstein.

Copyright © AllianceBernstein

Tags: Bond Market, Booms, Business Cycles, Business Week Article, Chairman Of The Federal Reserve, Economic Problem, Federal Reserve, Gold And Silver, Grandfathers, Grandmothers, inflation, Institutionalization, Market Rally, Paul Volcker, Prolonged Period, Real Assets, Recession, Rudden, Stock Market, Stocks And Bonds
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Is Global Financial Reform Possible? (Paul Volcker)

Monday, June 4th, 2012

by Paul Volcker, via Project Syndicate

HONG KONG – Nowadays there is ample evidence that financial systems, whether in Asia in the 1990’s or a decade later in the United States and Europe, are vulnerable to breakdowns. The cost in interrupted growth and unemployment has been intolerably large. But, in the absence of international consensus on some key points, reform will be greatly weakened, if not aborted. The freedom of money, financial markets, and people to move – and thus to escape regulation and taxation – might be an acceptable, even constructive, brake on excessive official intervention, but not if a deregulatory race to the bottom prevents adoption of needed ethical and prudential standards.

Perhaps most important is a coherent, consistent approach to dealing with the imminent failure of “systemically important” institutions. Taxpayers and governments alike are tired of bailing out creditors for fear of the destructive contagious effects of failure – even as bailouts encourage excessive risk taking. By law in the US, new approaches superseding established bankruptcy procedures dictate the demise rather than the rescue of failing firms, whether by sale, merger, or liquidation. But such efforts’ success will depend on complementary approaches elsewhere, most importantly in the United Kingdom and other key financial centers.

Strict uniformity of regulatory practices may not be necessary. For example, the UK and the US may be adopting approaches that differ with respect to protecting commercial banks from more speculative, proprietary trading, but the policy concerns are broadly similar – and may not be so pressing elsewhere, where banking traditions are different and trading is more restrained. But other jurisdictions should not act to undercut the restrictions imposed by home authorities. Closely related to these reforms is reform of the international monetary system. Indeed, one might legitimately question whether we have a “system” at all, at least compared to the Bretton Woods arrangements and, before that, the seeming simplicity of the gold standard. No one today has been able to exert authority systematically and consistently, and there is no officially sanctified and controlled international currency.

Read Complete Article

Copyright © Project Syndicate

Tags: Ample Evidence, Bankruptcy Procedures, Breakdowns, Commercial Banks, Complementary Approaches, Consistent Approach, Excessive Risk, Financial Markets, Global Financial Reform, Gold, Imminent Failure, International Consensus, International Monetary System, Paul Volcker, Policy Concerns, Project Syndicate, Proprietary Trading, Prudential, Prudential Standards, Race To The Bottom, Regulatory Practices
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Bloomberg: Bonds Beat Stocks Over Past 30 Years, First Time That’s Happened Since Civil War

Tuesday, November 1st, 2011

If we need any evidence the past thirty years, especially the past twelve or so, have been horrid for investors, this Bloomberg article notes that (government) bond returns have actually beaten stock returns over thirty years.  Ouch.  They say stocks win out in the ‘long run’ but for the average person’s life span, you don’t want to go out forty years to get a superior return.  Obviously this is very atypical – it’s the first time it has happened since the Civil War time frame!

To be fair, yields were very high on government bonds in the early 80s/late 70s as Paul Volcker was fighting off inflation so the starting point for prices was quite low in a relative sense (prices low, yields high), but it’s still an amazing statistic.

Just more evidence we should never stop QE’ing – QE for 30 years and more artificial returns will make us all mad money!

• The biggest bond gains in almost a decade have pushed returns on Treasuries above stocks over the past 30 years, the first time that’s happened since before the Civil War.
• Fixed-income investments advanced 6.25 percent this year, almost triple the 2.18 percent rise in the Standard & Poor’s 500 Index through last week, according to Bank of America Merrill Lynch indexes. Debt markets are on track to return 7.63 percent this year, the most since 2002, the data show. Long-term government bonds have gained 11.5 percent a year on average over the past three decades, beating the 10.8 percent increase in the S&P 500, said Jim Bianco, president of Bianco Research in Chicago.
• The combination of a core U.S. inflation rate that has averaged 1.5 percent this year, the Federal Reserve’s decision to keep its target interest rate for overnight loans between banks near zero through 2013, slower economic growth and the highest savings rate since the global credit crisis have made bonds the best assets to own this year. Not only have bonds knocked stocks from their perch as the dominant long-term investment, their returns proved everyone from Bill Gross to Meredith Whitney and Nassim Nicholas Taleb wrong.
• “The generation-long outperformance of bonds over stocks has been the biggest investment theme that everyone has just gotten plain wrong,” Bianco said in an Oct. 26 telephone interview. “It’s such an ingrained idea in everyone’s head that such low yields should be shunned in favor of stocks, that no one wants to disrupt the idea, never mind the fact that it has been off.”
• Stocks had risen more than bonds over every 30-year period from 1861, according to Jeremy Siegel, a finance professor at the University of Pennsylvania’s Wharton School in Philadelphia, until the period ending in Sept 30.   The last time was in 1861, leading into the Civil War, when the U.S was moving from farm to factory, according to Siegel, author of the 1994 book “Stocks for the Long Run,” in a telephone interview Oct. 25.
• U.S. government debt is up 7.23 percent this year, according to Bank of America Merrill Lynch’s U.S Master Treasury index. Municipal securities have returned 8.17 percent, corporate notes have gained 6.24 percent and mortgage bonds have risen 5.11 percent. The S&P GSCI index of 24 commodities has returned 0.25 percent.

Tags: Article Notes, Bank Of America, Bianco Research, Bond Returns, Bonds, Civil War Time, Commodities, Credit Crisis, Debt Markets, Fixed Income Investments, Global Credit, Government Bonds, Inflation Rate, Jim Bianco, Life Span, Mad Money, Merrill Lynch, Overnight Loans, Paul Volcker, Relative Sense, Stock Returns, Three Decades
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The Financial Reform Bill Was a Stunning Success

Friday, July 16th, 2010

This article is a guest contribution by Michael “Mish” Shedlock, Global Economic Trends Analysis.

Quite a few people sent me eMails asking my opinion on the financial reform legislation just passed by Congress, legislation that will undoubtedly be signed with much fanfare by President Obama.

This may surprise some people but I think the bill exceeded the wildest of expectations. Moreover, I can prove it.

To fully appreciate how amazingly good this piece of legislation was, we must look at the pluses (what the bill accomplished), the minuses (objectives the bill failed to meet along with any damages done), and the critical issue (reasonable expectations as to what the bill might have accomplished). Let’s start with the minuses.

Financial Reform Minuses

• Glass-Steagall: Paul Volcker supported provisions that were hopelessly watered down, so much so that they can accomplish nothing. This was a complete failure.
• Derivatives Reform: Banks successfully lobbied for derivative exceptions big enough to drive the planet Jupiter through. They succeeded. Derivatives reform is meaningless.
• Too Big To Fail: The reform bill did absolutely nothing to rein in the widely recognized “too big to fail” policies of the Fed. This was a complete failure.
• Preventing the Last Crisis: There is not a single thing in the bill that can possibly be construed to have prevented the last crisis. This was a complete failure.
• Preventing the Next Crisis: There is not a single thing in the bill that can possibly do anything to prevent the next crisis. This too was a complete failure.

Financial Reform Pluses

• None. The bill accomplished virtually nothing.

No doubt quite a few inquiring minds will be wondering how a financial reform bill that failed at 100% of its objectives while accomplishing virtually nothing can possibly be considered a “stunning success”.

This is where it pays to consider the crucial point: reasonable expectations.

Reasonable Expectations

The best way I can explain reasonable expectations is via an analysis of the Medical Reform bill, promoted, passed, and signed by President Obama even though a majority of US citizens were dead against it.

Medical reform did nothing to promote competition between states, nothing on tort reform, nothing to allow drug imports from Canada that would lower prescription costs and most importantly, nothing on reducing costs any step of the way.

That’s the positive side of medical reform.

The negative side of the balance sheet is that medical reform will cost a trillion dollars while increasing costs on small businesses at a time we can least afford to make that critical mistake. Furthermore, the bill panders to public unions and their luxury 100% paid for plans that put upward pressure on healthcare costs.

Medical Reform vs. Financial Reform

Medical reform not only accomplished nothing, it actually made matters substantially worse.

In sharp contrast to medical reform, I cannot come up with any financial reform provisions that make matters substantially worse.

Given the absolute best we could ever expect out of a major piece of legislation supported and promoted by Obama is nothing, and given that nothing was accomplished with no major detriments making matters much worse, the financial reform bill must be considered a stunning success.

Indeed, we should all be thrilled by it.

Importance of an Open Mind

However … I am always suspicious that major legislation like this contains provisions that will sow the seeds of the next crisis. Thus I am ready, willing, and able to admit that I was wrong if someone can show me how this bill makes matters substantially worse than before. If so, I will retract my statement that this bill was a “stunning success” and instead claim it was “stunning success compared to health care” or some other appropriate statement.

Moreover, if someone can convince me this bill actually does something that is net positive in a major way, I am ready willing and able to scream “Hallelujah! Praise be Obama” three times at the top of my lungs in downtown Chicago.

Some nitpickers will point out that the bill includes new transparency rules regarding the Fed. However, I doubt the new transparency rules accomplish much, if indeed anything. As a counterbalance, I strongly suspect there are some minor negatives I missed.

I need be convinced there are major net pluses or minuses to scream in downtown Chicago or to issue a retraction.

Otherwise, I sit comfortably with my opinion that “Financial Reform was a Stunning Success”, arguably the very best our wildest imaginations could ever have expected, given that it accomplished virtually nothing while doing no further major economic damage.

Copyright (c) Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

Tags: Congress Legislation, Critical Issue, Damages, Derivatives, Exceptions, Failure, Fanfare, Glass Steagall, Global Economic Trends, Inquiring Minds, Michael Mish, Mish Shedlock, No Doubt, Paul Volcker, Planet Jupiter, Pluses, Provisions, Reform Legislation, Single Thing, Stunning Success
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The Bond Roller Coaster

Saturday, May 1st, 2010

Investors have benefited over the past three decades from an unprecedented bull market in bonds since long-term government bond yields peaked at 14.8% in September 1981. Aggressive monetary tightening by Paul Volcker, Chairman of the Federal Reserve at that time, drove inflation from double-digit levels in 1981 to less than 3% in 1983. Continued vigilance by the Federal Reserve combined with deregulation, globalization and, until recent years, lower oil prices set a trend of disinflation and lower interest rates firmly in place.

As bond investors priced ever-lower inflation expectations into their return requirements, yields declined and created capital gains for bondholders. Since September 1981, the annualized returns from long-term government bonds of 10.8% rivalled the 11.2% return of the S&P 500 stocks. However, barring a serious double-dip recession, the trend of declining yields and robust gains is a thing of the past.

Many investors are not aware that the great bond bull market of the last three decades had its genesis in a devastating bond bear market that ran over 35 years from 1946 when WWII price controls were lifted until September 1981. The gradual entrenchment of higher inflation expectations, after the 1973 oil crisis in particular, propelled yields upwards. As evidenced in the following chart, long-term government bonds yields (in red) rose from 1.98% in March 1946 to 14.8% in September 1981.

During this period, investors in long-term government bonds earned a paltry 1.6% as capital losses induced by rising rates overwhelmed the income return. Real returns (i.e. net of inflation) were negative at -2.9% annually. In contrast, stocks earned a 10.2% nominal annual return and 5.2% after inflation.

Long-term bond yields have always been subject to lengthy secular cycles. Prolonged periods of falling yields and rewarding bond returns have been regularly followed by drawn-out periods of rising yields and subpar returns. Appendix I sets out this secular pattern of yield changes over the past two centuries while Appendix II contains a chart of U.S. federal debt. With the exception of WW II when the Federal Reserve worked with the Treasury Department to maintain low yields, cyclical peaks in bond yields have often been associated with government funding stresses in times of war (e.g. War 1812-14, Civil War and WWI).

The secular cycle in bonds is evidenced in the following chart which illustrates long-term U.S. bond yields since 1900. Of note is the fact that yields rose from 1900 to 1920, a period of rising commodity prices, stimulative monetary policy in the form of growing gold supply, increasing regulation and banking reform. Government funding requirements for WWI were the final cause of higher rates. The parallels to our current situation are obvious.

Although the U.S. is under tremendous deflationary pressure from excessive leverage and production capacity, so long as some shock does not tip the economy into a double-dip recession, a new secular cycle in long-term rates is in the process of forming. The Federal Reserve, with an eye to the policy errors of the 1930′s and Japan, is likely to err on the side of a loose monetary policy for years. Skyrocketing federal debt will demand a higher risk premium and the government will be tempted to let inflation re-ignite so as to reduce its debt burden in real dollars. Higher taxes and regulatory costs will be passed along to consumers through higher prices.

The good times for bonds couldn’t last forever. Although some longer-term bond exposure is needed today as a hedge against a deflationary scenario, investors should recognize that in the next year or so the bond roller coaster is about to get underway.

Appendix I

Long-Term U.S. Bond Yield Cycles

Source: A History of Interest Rates, Third Edition

Appendix II

U.S. Federal Debt as a Percent of GDP

Source: http://www.usgovernmentspending.com/downchart_gs.php?year=1792_2010&view=1&expand=&units=p&fy=fy11&chart=H0-fed&bar=0&stack=1&size=l&title=US%20Federal%20Debt%20As%20Percent%20Of%20GDP&state=US&color=c&local=s

Tacita Capital Inc. (“Tacita”) is a private, independent family office and investment counselling firm that specializes in providing integrated wealth advisory and portfolio management services to families of affluence. We understand the challenges of affluence and apply the leading research and best practices of top financial academics and industry practitioners in assisting our clients to reach their goals.

Tacita research has been prepared without regard to the individual financial circumstances and objectives of persons who receive it and is not intended to replace individually tailored investment advice. The asset classes/securities/instruments/strategies discussed may not be suitable for all investors and certain investors may not be eligible to purchase or participate in some or all of them. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives. Tacita recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor.

Tacita research is prepared for informational purposes. Neither the information nor any opinion expressed constitutes a solicitation by Tacita for the purchase or sale of any securities or financial products. This research is not intended to provide tax, legal, or accounting advice and readers are advised to seek out qualified professionals that provide advice on these issues for their individual circumstances.

Tacita research is based on public information. Tacita makes every effort to use reliable, comprehensive information, but we make no representation that it is accurate or complete.  We have no obligation to inform any parties when opinions, estimates or information in Tacita research changes.

All investments involve risk including loss of principal. The value of and income from investments may vary because of changes in interest rates or foreign exchange rates, securities prices or market indexes, operational or financial conditions of companies or other factors. There may be time limitations on the exercise of options or other rights in securities transactions.  Past performance is not necessarily a guide to future performance.  Estimates of future performance are based on assumptions that may not be realized. Management fees and expenses are associated with investing.

Tags: Bear Market, Bond Investors, Bond Returns, Bond Yields, Bondholders, Capital Losses, Chairman Of The Federal Reserve, Deregulation, Disinflation, Double Dip Recession, Entrenchment, Gold, Government Bond, Government Bonds, Inflation Expectations, Last Three Decades, Oil Crisis, Paul Volcker, Prolonged Periods, Roller Coaster, Term Bond
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Paul Volcker On How to Fix the Financial System

Sunday, January 31st, 2010

Paul Volcker’s Op-Ed in the NY Times:

“The phrase “too big to fail” has entered into our everyday vocabulary. It carries the implication that really large, complex and highly interconnected financial institutions can count on public support at critical times. The sense of public outrage over seemingly unfair treatment is palpable. Beyond the emotion, the result is to provide those institutions with a competitive advantage in their financing, in their size and in their ability to take and absorb risks.

As things stand, the consequence will be to enhance incentives to risk-taking and leverage, with the implication of an even more fragile financial system. We need to find more effective fail-safe arrangements.

In approaching that challenge, we need to recognize that the basic operations of commercial banks are integral to a well-functioning private financial system. It is those institutions, after all, that manage and protect the basic payments systems upon which we all depend. More broadly, they provide the essential intermediating function of matching the need for safe and readily available depositories for liquid funds with the need for reliable sources of credit for businesses, individuals and governments.

Combining those essential functions unavoidably entails risk, sometimes substantial risk. That is why Adam Smith more than 200 years ago advocated keeping banks small. Then an individual failure would not be so destructive for the economy. That approach does not really seem feasible in today’s world, not given the size of businesses, the substantial investment required in technology and the national and international reach required.”

Definitely worth reading.

Source: How to Reform Our Financial System. PAUL VOLCKER. NYT, January 30, 2010

Tags: Adam Smith, Commercial Banks, Competitive Advantage, Critical Times, Depositories, Everyday Vocabulary, Financial Institutions, Implication, Leverage, Liquid Funds, Ny Times, Nyt, Paul Volcker, Payments Systems, Public Outrage, Reliable Sources, Substantial Investment, Substantial Risk, Unfair Treatment, Worth Reading
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Q&A with Paul Volcker

Wednesday, January 27th, 2010

With the “Volcker Rule” regarding US financial regulation taking center stage, Paul Volcker’s response to questions on financial innovation at the “Future of Finance Initiative” six weeks ago makes for interesting viewing material.

Source: Wall Street Journal, January 26, 2010.

Tags: Center Stage, Finance Initiative, Financial Innovation, Material Source, Paul Volcker, Six Weeks, Taking Center Stage, Wall Street, Wall Street Journal
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Eliot Spitzer’s New Crusade Against Obamanomics

Friday, November 20th, 2009

Are Obama’s economic policies actually working? Eliot Spitzer says No!

Spitzer is taking aim at the [Obama} administration’s approach, accusing it of shying away from the kind of comprehensive reform that the financial system needs. The Obama administration is not so different from the Bush administration, at least so far as their approach to the banking crisis goes, he claimed:

“The fundamental error of this administration is that it is continuity. They have embraced the Bush Administration view that if you solve the problem of big banks everything else flows from that. They are wrong. Too big to fail is too big. They don’t get it. The only two people I know who don’t appreciate that are Tim Geithner and Larry Summers. Paul Volcker, Alan Greenspan, Henry Kaufman, Mervyn King — every major academic has said, We must get rid of too big to fail.”

Watch Spitzer make his case against Obama’s effectiveness as manager of the financial crisis below:

Eliot Spitzer arguing against Obamanomics from Intelligence Squared US on Vimeo.

Tags: Alan Greenspan, Banking Crisis, Banks, Bush Administration, Case Manager, Continuity, Economic Policies, Eliot Spitzer, Financial Crisis, Fundamental Error, Henry Kaufman, Intelligence, Larry Summers, Mervyn King, New Crusade, Paul Volcker, Taking Aim, Tim Geithner, Watch Case
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Make Sure You Get This One Right

Friday, July 3rd, 2009

This post is a guest contribution by Niels Jensen*, chief executive partner of London-based Absolute Return Partners.

As investors we are faced with the consequences of our decisions every single day; however, as my old mentor at Goldman Sachs frequently reminded me, in your life time, you won’t have to get more than a handful of key decisions correct – everything else is just noise. One of those defining moments came about in August 1979 when inflation was out of control and global stock markets were being punished. Paul Volcker was handed the keys to the executive office at the Fed. The rest is history.

Now, fast forward to July 2009 and we (and that includes you, dear reader!) are faced with another one of those “make or break” decisions which will effectively determine returns over the next many years. The question is a very simple one:

Are we facing a deflationary spiral or will the monetary and fiscal stimulus ultimately create (hyper) inflation?

Unfortunately, the answer is less straightforward. There is no question that, in a cash based economy, printing money (or “quantitative easing” as it is named these days) is inflationary. But what actually happens when credit is destroyed at a faster rate than our central banks can print money?

Let’s begin by setting the macro-economic frame for the discussion. I have been quite bearish for a while, suspecting that the growing optimism which has characterised the last few months would eventually fade again as reality began to sink in that this is no ordinary recession and that “less bad” doesn’t necessarily translate into a quick recovery. I still believe there is a good chance of enjoying one, maybe two, positive quarters later this year or early next; however, a crisis of this magnitude doesn’t suddenly fade into obscurity, just because the economy no longer shrinks at an annual rate of 6-8%.

Click here for the full report.

* Niels Jensen has 24 years of investment banking, private banking and asset management experience. He founded Absolute Return Partners LLP and is its chief executive partner.

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Tags: 24 Years, Absolute Return, Banki, Central Banks, Defining Moments, Deflationary Spiral, Executive Office, Executive Partner, Fiscal Stimulus, Global Stock Markets, Goldman Sachs, Good Chance, Investment Banking, Life Time, Niels Jensen, Obscurity, Paul Volcker, Printing Money, Rest Is History, Single Day
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Video Digest: Investors “look past the valley”

Friday, May 1st, 2009

As the financial markets await the bank stress test results in the US, a potpourri of video clips was produced. Although the discussions were varied, a golden thread prevailed: the duration of the financial crisis and the economic recession, and whether stock markets have hit bottom.

Needless to say, the plight of the beleaguered automakers and fears of an escalation in the number of swine flu cases also captured the attention of battle-weary investors. However, the S&P 500 Index rallied to a gain of 9.4% for April – representing its best monthly advance since March 2000 – and US Treasury yields jumped to levels last seen in November as investors “looked past the valley”.

Commentators featured on camera in this post include Simon Johnson, Michael Perino, Jim Walker, Steve Forbes, Christopher Whalen, Joseph Stiglitz, Marc Faber, Bill Ackman, Paul Kasriel, James Galbraith, Paul Volcker, Sheila Bair, Mark Mobius, Robin Griffiths and Jim Rogers.

The selection kicks off with a recession singalong – a Walt Handelsman animation entitled “Worst Slide Story”, and concludes with an interesting visualization of President Obama’s planned budget cuts.

Walt Handelsman: Animation – recession singalong!
“The classic ‘West Side Story’ is enjoying its Broadway revival. Now comes the remix, ‘Worst Slide Story’.”

Source: Walt Handelsman, Newsday, April 13, 2009.

CNBC: How swine flu spreads in humans
“A deadly outbreak of swine flu has killed more than 100 people in Mexico, and infections have been reported around the world. Malik Peiris, professor at University of Hong Kong, spoke to CNBC about how the flu can spread.”

Source: CNBC, April 27, 2009.

Bloomberg: Jim Rogers says flu may be “disaster in weak economy”
“Jim Rogers, chairman of Rogers Holdings, talks with Bloomberg’s Betty Liu and Peter Cook about the potential impact of swine flu on the global economy.

Rogers, author of ‘A Gift to My Children’, also discusses the restructuring efforts at US automakers, ‘short’ strategy and investment opportunities in commodities. He speaks from Singapore.”

Source: Bloomberg, April 28, 2009.

Bill Moyers (PBS): Conversation with Simon Johnson and Michael Perino
“Bill Moyers speaks with economist Simon Johnson and Ferdinand Pecora biographer and legal scholar Michael Perino. Johnson is a former chief economist of the International Monetary Fund (IMF) and a professor at MIT Sloan School of Management, and Perino is a professor of law at St. John’s University and has been an advisor to the Securities and Exchange Commission.”

Source: Bill Moyers Journal, PBS, April 24, 2009.

CNBC: Financial crisis still has long way to go
“Hold on to your horses as the global financial crisis still has a long way to go, says Jim Walker, founder & CEO at Asianomics. He tells CNBC’s Martin Soong that we are probably in the horizontal part of a L-shaped recession.”

Source: CNBC, April 29, 2009.

Fox Business: Forbes – recovery hinges on credit market

Source: Fox Business, April 27, 2009.

CNBC: Christopher Whalen on financial fallout from stress tests
“What the stress test results will mean for financials going forward, with Paul Miller, FBR Capital Markets, and Christopher Whalen, Institutional Risk Analytics.”

Source: CNBC, April 27, 2009.

The Wall Street Journal: Can America handle the truth?
“Evan Newmark and Dennis Berman discuss whether Americans can swallow ‘the truth’, especially in relation to the results of the bank-stress tests.”

Source: The Wall Street Journal, April 28, 2008.

Credit Suisse: Joseph Stiglitz calls for US bank nationalization
“Leading economist and Nobel Laureate Joseph Stiglitz advocated the nationalization of troubled US banks and raised concerns about the American government’s efforts to stimulate the economy, in the keynote economic session at the Credit Suisse Asian Investment Conference.

“Addressing a record crowd of delegates, Stiglitz said the current global downturn had been worse than he had expected. ‘The one ray of optimism in this really dark cloud is that China and India look like they’re going to continue to grow, although somewhat slower than they have been growing,’ he said.

“Stiglitz said the US will play a critical role in the recovery of the world economy, and that the key issues would be consumption growth – which until now had been led by ‘unbridled borrowing – and the restructuring of the financial institutions. ‘(Americans were told) if you don’t have income, don’t let it bother you, keep spending, and we lent them money and they kept borrowing and the debts grew,’ he said.”

Source: Credit Suisse, April 17, 2009.

The Wall Street Journal: Was John Thain a scapegoat?
“In an interview with WSJ’s Susanne Craig, former Merrill Lynch Chief Executive John Thain told her he was unfairly scapegoated for the growing problems of Bank of America.”

Source: The Wall Street Journal, April 27, 2009.

CNBC: GM’s third restructuring plan
“General Motors CEO Fritz Henderson discusses the automaker’s third restructuring plan since December, with CNBC’s Phil Lebeau.”

Source: CNBC, April 27, 2009.

Financial Times: Wilbur Ross on Detroit and the economy
“Wilbur Ross, chief executive and chairman of WL Ross & Co, talks to Chrystia Freeland, FT’s US managing editor, about the possible bankruptcy of GM, the fate of the auto suppliers and the future ownership structure of GM. He also discusses the treatment of bank bondholders, the US government’s handling of the economic crisis and the prospects for recovery this year.”

Source: Financial Times, April 30, 2009.

Bloomberg: Faber says GM’s debt offering right way to restructuring
“Marc Faber, publisher of the Gloom, Boom and Doom report, talks about General Motors Corp’s offer to exchange $27 billion of bondholder claims for equity. Faber also discusses the Federal Reserve’s money printing efforts to fight economic crises.”

Source: Bloomberg, April 27, 2009.

CNBC: Global meeting of the minds
“Insight on the world leaders convening in Washington over the weekend for the G-7 meeting, with Dominique Strauss-Khan, IMF managing director, and John Sununu, former senator (R-NH).”

Source: CNBC, April 27, 2009.

Charlie Rose: A conversation about the economy
“A conversation about the economy with Bill Ackman, major investor and hedge fund manager of Pershing Square Capital Management LP, Kate Kelly of The Wall Street Journal, Andrew Ross Sorkin of The New York Times and Joseph Stiglitz, economist and a member of Columbia University faculty.”

Source: Charlie Rose, April 24, 2009.

Paul Kasriel (Northern Trust): Coming out of the downturn
“Paul Kasriel, Northern Trust’s Chief Economist, discusses the current economic climate and the potential impact on market consumption during any recovery.”

Source: Paul Kasriel, Northern Trust, April 30, 2009.

Fox Business: Galbraith – economic strings attached?
“Professor James Galbraith on his concerns about the economic turnaround. He makes four essential points about the expansion yet to come.”

Source: Fox Business, April 29, 2009.

Bloomberg: Volcker – economy leveling off, stimulus not needed
“Former Federal Reserve Chairman Paul Volcker talks with Judy Woodruff about the outlook for the US economy.”

Source: Bloomberg (via YouTube), April 29, 2009.

CNBC: Bair Speaks
“CNBC’s Trish Regan talks about banks and the economy with FDIC Chair Sheila Bair.”

Source: CNBC, April 28, 2009.

CBS: Shrinking necessities
“A new study finds that Americans are downsizing their list of things considered essential. Charles Osgood reports.”

Source: CBS, April 27, 2009.

Barron’s: Big money poll – the long view
“After the worst stretch for stocks in decades, America’s money managers say they’re bullish. But do they really believe it? Based on the results of our latest Big Money poll, the pros are hoping for the best, but … hold on! Aren’t those fresh bear tracks in the mud?

Click here for the article.

Source: Jack Willoughby, Barron’s, April 27, 2009.

Financial Times: Have markets hit bottom?
“Have markets reached a bottom? How the market participants affect the direction of stock markets? Michael Mauboussin, an expert in the wisdom of crowds theories, talks to John Authers about market timing and understanding how different players change sentiment.”

Source: Financial Times, April 28, 2009.

Money Control: Mark Mobius – emerging markets on cusp of next big bull run

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Source: Money Control, April 27, 2009.

John Authers (Financial Times): Deflating the earnings bubble
“The bad news is that shares are predicting a 50% fall in non-financial companies’ earnings. The good news is that this is already priced in.”

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Source: John Authers, Financial Times, April 27, 2009.

CNBC: Hugh Hendry – downturn still underway
“The recent rise in stocks and talk about green shoots in the markets are optimistic assumptions, as the world downturn ‘still has a way to run’, Hugh Hendry, CIO at Eclectica, told CNBC.”

Source: CNBC, April 28, 2009.

CNBC: Charts – Asia signals new bull market
“While western stock indexes struggle to rally in an overall bear market, their emerging counterparts are set to enjoy the real thing, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC.”

Source: CNBC, April 27, 2009.

John Authers (Financial Times): Obama’s first 100 days
John Authers puts Obama’s first 100 days into context, looking at equity markets, volatility and overall economic sentiment.”

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Source: John Authers, Financial Times, April 28, 2009.

YouTube: Obama budget cuts visualization
“How much is the $100 million dollars in budget cuts compared to the federal budget as a whole? This video imagines the budget as $100 in pennies to provide the answer.”

Source: YouTube, April 24, 2009.

Tags: Bill Ackman, Broadway Revival, Christopher Whalen, Deadly Outbreak, Economic Recession, Emerging Markets, ETF, Flu Cases, Hugh Hendry, India, James Galbraith, Jim Rogers, Joseph Stiglitz, Marc Faber, Mark Mobius, Paul Kasriel, Paul Volcker, Robin Griffiths, Sheila Bair, Steve Forbes, Swine Flu, Us Treasury Yields, Walt Handelsman, West Side Story
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