You will be hearing this term many times before the current credit crisis is resolved.
Before we head into the tall timber, let’s warm up with some simple examples.
What Is Moral Hazard?
Perhaps you are one of the prudent wage earners who have income disability insurance, either through a group plan at work, or on your own. […]

Well…that didn’t take very long, did it?
Yesterday’s post predicted JP Morgan Chase would swallow Bear Stearns in a few weeks. That was, of course, an obvious typo. What I should have said was a few days.
This is very good news for those of us who want to satisfy our hunger for retribution, while […]

So….what to make of the Fed’s temporary rescue of Bear Stearns on Friday?
My expectation is that you will see a repeat of the Bank of America/Countrywide “two step” completed just a few months ago. First the loan rescue….then the takeover.
With JP Morgan Chase as the designated conduit between the Fed and Bear Stearns, they […]

We are going to compare and explore the parallel universe of investment products that no commissioned sales person will ever show you.
But first you must disabuse yourself of any notion that paying a commission will somehow produce a better outcome. The only one guaranteed to have a better outcome is the broker.
Remember, they get […]

The typical American consumer is infatuated with insurance. Or something they mistakenly call insurance.
Remember the last time you were in Best Buy or Circuit City stocking up on the latest consumer electronics gizmo? Then you surely remember the sales associate pushing very hard for you to add the “extended warranty” to the […]

Maybe the economists have not had enough data to make up their minds yet, but to the average family it feels like a recession is well underway.
Just as businesses tend to over-hire and over-expand during boom times, so too with most household budgets.
This is the time to remind yourself that there are two ways to […]

There are signs that bargain hunters are now bottom fishing in the real estate market.
If in fact we are at or near the bottom, a fact not yet definitively settled.
We may have dialed prices in some markets back to 2005….but this way-back machine could go all the way to the nineties now that entire […]

When I set out to publish a Blog about wealth management, I never intended it to be explicitly political in nature. I soon realized that was both naive and highly unworkable. Strip away all the rhetoric, and politics is fundamentally a contest to determine income redistribution. There most be some political dimension […]