Perspectives

Posted: Thursday, May 01, 2014
Low interest rates are perverting the economy and stock market in unusual ways. With demand for loans for capital expansion scarce, banks are now willing to lend to companies to buy back their own stock. As long as the rate of interest is less than the earnings yield (the inverse of the price-to-...
Filed Under: Perspectives
Posted: Tuesday, April 01, 2014
Economic theory teaches us that rational investors are risk-adverse. This is to say that, for any given level of expected return, an investor will choose the least risky assets in which to invest. Like so much theory, economic theory suffers from assumptions that are absent in real life. For...
Filed Under: Perspectives
Posted: Saturday, March 01, 2014
Unless you are a participant in winter sports, you are probably glad to see winter coming to an end, even if it is taking more encores than the applause would justify. While everyone has their favorite winter misery story, the impact on the economy has been collectively greater than on any one...
Filed Under: Perspectives
Posted: Wednesday, January 01, 2014
One of the chestnuts of Wall Street is: as goes January for stocks, so goes the year. No one can say why this is, but it is a concept that gets a lot of publicity now, as we are looking at the first decline in the stock market indexes in January in a good while. Explanations of why January should...
Filed Under: Perspectives