Archive
Mar 19, 2009
Bernanke Buying Spree: The Good, the Bad, and the Reality
By Andrew Mickey, Q1 Publishing
It’s the biggest, one-day economic shot in the arm the Fed has ever prescribed.
Just a few days after his PR tour on 60 Minutes, Fed Chairman Bernanke announced it is going to be pumping over $1.15 trillion worth of freshly printed dollars into the U.S. economy. The lender of last resort said it will be buying mortgage-backed securities from Fannie Mae and Freddie Mac debt and throwing another $100 billion into the Freddie and Fannie black hole.
The big move though, and what got the markets rolling again, was when the Fed said it will be buying longer-term treasuries. This basically means the U.S. government can now borrow money directly from the Fed. It doesn’t have to worry about China or Japan financing a massive debt load and can disregard any sort of fiscal discipline. The Fed is now the official sugar daddy.
How will the Fed get all that money, you ask?
It’s the biggest, one-day economic shot in the arm the Fed has ever prescribed.
Just a few days after his PR tour on 60 Minutes, Fed Chairman Bernanke announced it is going to be pumping over $1.15 trillion worth of freshly printed dollars into the U.S. economy. The lender of last resort said it will be buying mortgage-backed securities from Fannie Mae and Freddie Mac debt and throwing another $100 billion into the Freddie and Fannie black hole.
The big move though, and what got the markets rolling again, was when the Fed said it will be buying longer-term treasuries. This basically means the U.S. government can now borrow money directly from the Fed. It doesn’t have to worry about China or Japan financing a massive debt load and can disregard any sort of fiscal discipline. The Fed is now the official sugar daddy.
How will the Fed get all that money, you ask?
Mar 17, 2009
Main St. vs. Wall Street: And the Winner is...
By Andrew Mickey, Q1 Publishing
Last Sunday, Fed Chairman Ben Bernanke jumped into the Public Relations Politics foray when he appeared on 60 Minutes.
The political marketers were out in full force on this one. They did everything from the visit of Bernanke’s childhood home (which is now in foreclosure) to the close up of Main Street sign to the conversation on the street side bench in rural South Carolina. It was the perfect image of I’m like you kind of PR the government decision-makers are looking for right now.
They want to be trusted again. And they’re pulling out all the stops to get back into the public’s good graces after scaring everyone to get the $787 billion stimulus package pushed through.
Then add to that the AIG bonus debacle.
Is it the government’s right, as a majority business owner, to determine which contracts are valid and which are not? Will this mean that I will be able to decide, as a business owner, which contracts I want to comply with and which I don’t? ...
Last Sunday, Fed Chairman Ben Bernanke jumped into the Public Relations Politics foray when he appeared on 60 Minutes.
The political marketers were out in full force on this one. They did everything from the visit of Bernanke’s childhood home (which is now in foreclosure) to the close up of Main Street sign to the conversation on the street side bench in rural South Carolina. It was the perfect image of I’m like you kind of PR the government decision-makers are looking for right now.
They want to be trusted again. And they’re pulling out all the stops to get back into the public’s good graces after scaring everyone to get the $787 billion stimulus package pushed through.
Then add to that the AIG bonus debacle.
Is it the government’s right, as a majority business owner, to determine which contracts are valid and which are not? Will this mean that I will be able to decide, as a business owner, which contracts I want to comply with and which I don’t? ...
Mar 12, 2009
Market Rallies and Rhymes: Prepare Yourself Now
By Andrew Mickey, Q1 Publishing
Mark Twain said, History doesn’t repeat itself, but it does rhyme.
Right now, investors and traders are getting ready for it to rhyme again.
Earlier this week, the government felt the stock market was getting a bit too low again. Our great leaders delved into their ever-shrinking bag of tricks and pulled two of them out. In the process, they sparked the strongest rally since last summer when they stepped in.
Barney Frank, the House Financial Services Committee Chairman, told reporters he has spoke to the Securities and Exchange Commissioner and said, I am hopeful the uptick rule will be restored within a month.
Frank went on to add his support to the current mark-to-market accounting rules (which will make the bank stress tests much less stressful).
Surprised? You shouldn’t be...
Mark Twain said, History doesn’t repeat itself, but it does rhyme.
Right now, investors and traders are getting ready for it to rhyme again.
Earlier this week, the government felt the stock market was getting a bit too low again. Our great leaders delved into their ever-shrinking bag of tricks and pulled two of them out. In the process, they sparked the strongest rally since last summer when they stepped in.
Barney Frank, the House Financial Services Committee Chairman, told reporters he has spoke to the Securities and Exchange Commissioner and said, I am hopeful the uptick rule will be restored within a month.
Frank went on to add his support to the current mark-to-market accounting rules (which will make the bank stress tests much less stressful).
Surprised? You shouldn’t be...
Mar 10, 2009
Who Says Buy and Hold is Dead?: How to Double Up on Growth
By Andrew Mickey, Q1 Publishing
Yesterday, the Dow fell for the 14th trading day out of the past 18. The sharp downturn only caps off an already disastrous market downturn.
As we’ve been expecting, many commentators say it’s the nail in the coffin for buy and hold investing – a strategy which has worked for the past five decades.
As they write their eulogies, which undoubtedly contain numerous references to worst since factoids, buy and hold is not dead. Yes, it is the worst possible strategy for this market. And yes, anyone holding out through this downturn has certainly paid a high price.
However, buy and hold will have its time again. Chances are they’re not holding the right stocks and they’re not getting in anywhere close to the right time. Let me explain...
Yesterday, the Dow fell for the 14th trading day out of the past 18. The sharp downturn only caps off an already disastrous market downturn.
As we’ve been expecting, many commentators say it’s the nail in the coffin for buy and hold investing – a strategy which has worked for the past five decades.
As they write their eulogies, which undoubtedly contain numerous references to worst since factoids, buy and hold is not dead. Yes, it is the worst possible strategy for this market. And yes, anyone holding out through this downturn has certainly paid a high price.
However, buy and hold will have its time again. Chances are they’re not holding the right stocks and they’re not getting in anywhere close to the right time. Let me explain...
