The 2000s were a pretty good decade for Bears. The Standard and Poor’s 500 Index is down 24% in nominal terms from December 1999 or approximately 30% when dividends and inflation are taken into account. Four of the years were Bear triumphs – 2000, 2001, 2002, and 2008. It’s the best Bear decade since the […]

It must surely have become obvious from both the catastrophes of 2008 and the bumper profits of 2009 that the investment banking/trading business, whether through independent behemoths or within even larger commercial banks, simply isn’t working. Now that “too big to fail” bailouts by taxpayers have been established, risk management in the industry is a […]

We’ve now lived through the same new disaster twice. Computer simulations, more or less universally adopted as the solution to a major problem, turned out to have been based on flawed assumptions and faulty data. As a result policy or markets became heavily skewed in an inappropriate direction. Wall Street’s risk managers and climate change […]

Gold broke through $1,200 per ounce this week, on rumors that the People’s Bank of China might increase the percentage of gold in its reserves. The dollar, the euro, sterling and the yen all have good reasons to weaken, yet in our current global fiat money system they have nothing to weaken against. Global foreign […]

The collapse of Dubai World is pretty unsurprising; when examined closely the Dubai real estate market was always likely to prove a gigantic bubble. It does however raise the question: how many other pockets of rot are around globally, left over from the cheap money boom of 2003-07 and likely to plunge the world’s markets […]

The publicity and vituperation around the book tour of a middling ex-Governor of Alaska seems to have nothing to do with Sarah Palin’s politics, which judging from her term in office are unexceptional and only center-right. The heat derives from her style, which is that of an iconoclast outsider, and from the establishment’s fear that […]

The rise in the gold price above $1,100 per ounce this week is a pretty good indicator that something has changed. For eighteen months, the gold price had been in a trading range topping out around $1,000l it has now broken out decisively from that range. The opportunity for the world’s central banks to change […]

Of the world’s six largest economies, three currently have budget and public debt positions that if allowed to fester will push those nations into bankruptcy (the seventh largest, Italy, also has a budget and debt position that is highly vulnerable, but its problems appear chronic rather than acute.) Given the proclivities of modern politicians for […]

Yes, I know we’ve just had the 80th anniversary of the 1929 Crash. So what? We can learn a lot from past Crashes and economic disasters, but that particular one is looking less and less relevant to the position we are in today.

In the recent unpleasantness, the US made some progress towards solving its biggest economic problem of recent years: the lack of US savings. Regrettably, in the latest figures the beginnings of economic recovery have brought backsliding, with the savings rate dropping back from 6% to 4.3%. Without more savings, as global liquidity declines the US […]