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Archive for July, 2009

Negative Inheritance

Friday, July 31st, 2009, by

Bet that got your attention…those are two words you hardly ever see linked together. Much has been written about the stupendous wealth transfer underway as the aging baby boomers prepare to pass their assets to the next generation. But there is a flip side to this sunny scenario. What will become of those who become […]

Idiopathic Policy

Thursday, July 30th, 2009, by

When the vocabulary of economics is exhausted, we must turn to other disciplines…today that would be medicine. “Idiopathic,” as defined by Wikipedia, is an adjective used primarily in medicine-meaning “arising spontaneously or from an obscure or unknown cause.” In plain English, this is the catch all diagnosis MDs reach for when they haven’t got a […]

Loss Severity

Wednesday, July 29th, 2009, by

Now may be an ideal time for you to pay a visit to your friendly local banker. Not to open an account…but to pry loose some of their toxic defaulted real estate. Actually, the banking industry is no longer on life support.  They are enjoying their day in the sun, profiting from spread lending, now […]

Thinking the Unthinkable, Part II

Tuesday, July 28th, 2009, by

So, what is the root cause of the municipal debt crisis? Simply this: The drivers of deficit municipal spending are not subject to any market discipline. Businesses can be extinguished by involuntary bankruptcy, but the powerful municipal unions know that their concentrated lobbying pressure is more effective with legislators than the generalized pain endured by […]

Thinking the Unthinkable, Part I

Monday, July 27th, 2009, by

Everyone knows that Muni Bonds have an ultra-low default rate. Just as everyone knew that with our highly evolved economic tuning, prolonged recessions were now only an historical artifact. It’s amazing how quickly the market has shed its risk aversion. Witness the spectacular returns in junk bonds so far this year. And the yields on […]

Asset Location Strategy

Friday, July 24th, 2009, by

The modern portfolio construct of asset allocation has been grievously wounded during the recent market mauling. There was no shelter from the storm.  Virtually all asset classes declined, leaving the experts befuddled. But there is another tool available to investors that allows them to arbitrage their way through the thicket of the tax burden…and that […]

The Other Shoe Has Dropped

Thursday, July 23rd, 2009, by

We may be approaching the bottom in the residential real estate market that has been in free fall since 2006. If not this year, then sometime in the first half of 2010. It would be a fool’s errand to try to pick the bottom.  The margin for error is much more narrow now that the […]

Brokers Behaving Badly…The Saga Continues

Wednesday, July 22nd, 2009, by

I’m not sure this item even qualifies as being newsworthy. Whenever a brokerage firm gets caught with its hand in the cookie jar, the spectacle plays out according to the time worn script. Usually, the consent decree does not involve an admission of guilt.  The settlement language simply states that the firm categorically denies any […]