|Independent Investor: Can the Fed Avert Another Selloff?|
11:23PM / Thursday, August 25, 2011
The safe bet would be to write about something else because by the time you read this Federal Reserve Bank Chairman Ben Bernanke will have already given his speech in Jackson Hole, Wyo., scheduled for Friday morning. I'm betting that whatever he says won't be enough to save the stock market from further decline.
The stock market has been climbing over the last week in anticipation that the Federal Reserve will, like last year, announce another monetary stimulus program similar to QE II. There are several problems in betting on that outcome in my opinion.
No. 1 is investor's knee-jerk expectation that the government will save the stock market every time we have a selloff of 10 percent
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|@theMarket: Bumps in the Road|
08:42AM / Saturday, May 28, 2011
Investors are worried. They are worried that the end of QE II will spell disaster. They are worried that European bank woes will spill over onto our shores. They are worried that the economy is stalling and inflation is trending higher. Yet, with all these worries, the markets have held their own over the last few weeks.
I'm not going to dismiss these concerns, although we need to remember that markets often climb a wall of worry. Admittedly, there have been so many downgrades of sovereign debt lately that it's hard to keep track. The PIGS (Portugal, Ireland, Greece, and Spain) have had to make room this week for Japan. That island nation joined the ranks of downgrades in large part due
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|@theMarket: Ben Does It Again|
06:16AM / Saturday, April 30, 2011
This week's pivotal event was Fed Chairman Ben Bernanke's first press conference with the media. Judging from the price action in the stock market, Ben passed with flying colors.
The chairman provided a bit of clarity, reassuring the market that in June, when QE II expires, it will be a gradual process of monetary tightening as opposed to a sharp spike in interest rates. Clearly, he gave little comfort to the dollar bulls as the greenback continues its decline (down 8 percent year-to-date) while dashing the hopes of bears in the precious metals markets as gold and silver raced ever higher on a wave of speculative fever and inflation expectations.
Although both Bernanke and U.S.
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|The Independent Investor: Why Banks Won't Lend|
02:28PM / Friday, April 29, 2011
Then we'd own those banks of marble,
With a guard at every door;
And we'd share those vaults of silver,
That we have sweated for
"Banks are made of Marble" by Pete Seeger
Over the last few years, the Federal Reserve has practically given money away to any entity that calls itself a bank. Individual states are also trying, but so far the banks have just been hoarding this growing pile of cash instead of loaning it out. Why?
Two reasons come to mind: Banks are afraid of taking on lending risk. Burnt by the subprime mortgage debacle, they are now
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|@theMarket: Santa Visits Wall Street|
04:14PM / Thursday, December 23, 2010
As markets close in this holiday-shortened week, the stock market enjoyed its annual Christmas rally with all three averages reaching new highs for the year. It was the best December for the S&P since 1991 and most forecasters believe these gains indicates an even larger move in the first half of next year.
Goldman (or should I say Government) Sachs upped its forecast for the S&P 500 Index to 1,450 for 2011. That is a 16 percent projected gain in the index and, if true, would bring us within 115 points of that average's all time high reached on Oct. 9, 2007.
Adding to the good cheer this week was the news that existing home
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|Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.