Capitalism could still get a stem to stern overhaul. To keep score in the Revolution track something economists call "externalities."
“A crisis is a terrible thing to waste,” said Stanford economist Paul Romer way back in 2007 near the start of the recent (or should that be “current”?) global fiscal and economic crisis. You certainly understand why if you take a look at U.S. economic history. Most...Earnings above low expectations? Probably. Revenue growth? Unlikely. Will that be enough for a rally?
Last June when this rally looked likely to falter, earnings bailed it out. Not that earnings were so great. They were just better than expected. Analysts had reduced their predictions by so much, in fact, that some companies turned in quarters that were 20, 30, or...Banks are going to have to raise a lot more capital, says HSBC CEO
HSBC (HBC) CEO MichaelGeoghegan told the Financial Times that he expects international regulators will eventually require banks to have Tier One capital ratios of about 10%. That’s significantly higher than the 8% target now going the rounds in conversations...After the recovery (whenever it arrives), what will be the new "normal"?
What’s the new “normal”? That’s the big debate on Wall Street right now. And the answer is of key importance to your portfolio. One on side, there are what I’ll call the “growth bears” who believe that once we’re recovered from the global financial and economic crisis...Did the tide of falling stock dividends turn in the third quarter?
The second quarter was terrible for dividends, Standard & Poor’s reported on October 1. A record low number of companies—just 233 out of the 7,000 public companies that report dividend numbers to S&P raised their dividends. The 233 companies raising...Nothing but bad news in this morning's unemployment numbers
The only good news in the September unemployment numbers was that the market had sold off 203 points the day before on worries over these figures. So the drop Friday morning hasn’t been very steep so far. But the numbers were bad, no doubt about it. How bad? Let...Where's the money? Despite the Fed, the money supply is falling
We’ve got a little problem in the economy. Tiny really. Nothing to worry about. Just that money supply is falling and that could endanger the entire economic recovery. The Federal government and the Federal Reserve are pumping money into the economy as fast as they...Buy on the dip? Even a tiny 3.3% dip? Maybe soon for some of the stocks I've called "too expensive"
You can tell a lot about the short-term direction of the market from how it responds to news. A market that, in Wall Street parlance, wants to go up won’t pay any attention to bad news. It will rally anyway. A market full of investors looking for an excuse to take...Ultimately, this stock market rally lives and dies on interest rates
So it’s a good thing when people such as Federal Reserve Vice Chairman Donald Kohn say that the Fed will keep interest rates near zero “for an extended period” as he did in a September 30 speech in Washington. As long as interest rates are so low, bond yields on...Those individual investors who left the stock market in 2008 aren't back yet–which will make any near-term dip short and shallow
The Standard & Poor’s 500 stock index is up close to 60% from the March 2009 bottom. Most investors, according to data on mutual fund money flows, have stayed the course so while they were pummeled by dropping prices in 2008, they’ve also profited from...Second quarter GDP better than expected on third revision
Third time is the charm, apparently. U.S, real GDP fell at an annualized rate of 0.7% in the second quarter, according to this morning’s data release from the Commerce Department. The figure was the regular third revision of quarterly data. And it surprised...Here we go again: Drug stocks rally but is that a reaction to merger news or a sign that investors are getting more defensive?
Last time we had a one day pull back that led some of us (okay, me) to question whether this rally was getting tired we saw the stock market as a whole go down but the drug sector move up. Now today’s strength in the sector on a down day for the market as a...Apple gets its deal in China; iPhone goes non-exclusive in the UK
China Unicom (CHU) announced on September 28 that it will begin selling Apple’s (AAPL) iPhone in China on October 1. China Unicom is China’s second largest mobile phone operator. (For more on how the Chinese players line up and the coming battle between...Health care reform is an even bigger deal in China–and it will change the way to invest in that country
Health care spending has doubled from 2002 to 2007. Tens of millions of people aren’t covered by any health insurance and as a result of the global economic crisis and the consequent economic slowdown millions who had insurance have lost it. Despite the rise in health...Four winners in the banking sector–and my guess on when to buy them
The banking crisis is by no means over. But I think we can start putting together a list of winners. When we will want to buy stock in these banks is another question. What characterizes the four winners that I’m going to name in this post? Two things. First, they’ve...And now for some good news on banks–well, sort of.
During the financial panic stage of the global financial crisis, banks wrote down some $1 trillion in securities. Much of this came as banks took losses on thin to trade or never traded securities. What President George W. Bush’s Treasury branded...Could Europe's banks be in even worse shape than ours?
Hard as it is to believe, it looks likely: European banks are in deeper trouble than those in the U.S. and they’ve done less to clean up their balance sheets than their U.S. counterparts. At the end of this week, the finance ministers of the European Union...The economy will start adding jobs again–in April
Unemployment will start to decline and the economy will start to add jobs again in April 2010. At least that’s the result you get if you extrapolate the current rate of decrease in new jobless claims out into the future. The Financial Times did the calculation...Did the United States prosper because of or inspite of its leaders?
The great stock picker and mutual fund manager Peter Lynch once advised, “Buy businesses so simple even an idiot could run them. Because one day an idiot will.” After reading David S. Reynolds’s Waking Giant: America in the Age of Jackson (HarperCollins, 2008), I...China pulls out of Australian rare earths deal–time to put Lynas (LYSCY) on your watch list
On September 24 China Nonferrous Metal Mining walked away from a deal to buy 52% of Lynas (LYSCY), the Australian company that owns the world’s richest rare earths deposit. In my September 11 post...The IPO window opens and battery maker A123 Systems gets set to jump through
The financial crisis has been hard on IPOs, the initial public offerings that young companies use to start tapping the public stock markets for capital. In the six months after Lehman Brothers went into bankruptcy, a grand total of two companies managed to go...Way down the road I can see early signs of the next stock market–and it's not going to look a lot like the last market or today's either
Sometimes the shortest distance to portfolio disaster is a straight line between two points. This, I believe, is one of those times. If I’ve been clear about nothing else in the last few weeks, I hope I’ve been clear on how impossible it is to find a reliable,...Behind the bad news in housing sales is there even worse news?
Bad numbers on existing home sales this morning. But is the reason behind the numbers even scarier than the numbers themselves? The numbers, mind you, were bad enough. Existing home sales fell 2.7% in August. The drop comes after four consecutive months of increasing...A123 Systems IPO roars out of the gate
On September 21 I wrote that if the initial public offering for battery maker A123 Systems turned hot, it would enable a wave of private companies locked out of the public markets to finally go public. (See...Bad news for commodities: China's buying spree is slowing
The Baltic Dry Index. If you invest in commodities or commodity stocks, this is the best indicator of short-term trends in the market for commodities such as iron ore,grain, and coal that are carried in bulk by ships. And the news hasn’t been good recently. The...This is the point in a rally when some prices can give false clues
On Monday September 21 stock prices moved lower. The price of a barrel of oil tumbled too, breaking below $70. On Tuesday stocks rallied and the price of barrel of oil climbed back above $71. Upward momentum had been restored, right? Well, I wouldn’t bet on it....Read the fine print on predictions that Asia will lead the world's economies in 2010: There's a big "if"
On Tuesday September 22 the Asian Development Bank said that the economies of developing Asia–that’s Asia excluding Japan, Australia, and New Zealand–would grow by 3.9% in 2009 and by 6.4% in 2010. That would be enough to lead the global economy out...The dollar sinks to new lows, driving stocks higher. That's likely to continue
Today investors saw a resumption of the pattern that has characterized the recent stage of this stock market rally: the U.S. dollar fell and stocks rose. The U.S. dollar, in fact, hit a one-year low against the euro. That was good for gold, copper, oil and other...We have nothing to fear but a replay of 1937 itself
The specter of 1937 hangs over the economy and the stock market. That’s the year that over confidence that the Roosevelt administration had whipped the Great Depression and that it was time to balance the federal budget led to another deep recession that wiped out...Jim’s Daily Email Alerts:
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