How To Avoid Black Swans
Nassim Taleb, author of the eerily prescient books Fooled By Randomness and The Black Swan, has a very interesting column in the Financial Times. We have referenced Taleb before here at Invest With An Edge, and with good reason. He sees things most people miss. Black swans are the rare, almost unknown...
No Way Out For Banks
Recently scientists observed the collapse of a star 50 times bigger than our own sun. After exploding into a massive supernova, the star collapsed upon itself and became a black hole whose intense gravity inexorably draws in anything that comes close – even light itself. This is also an apt description...
Fed Printing Dollars – Short the Greenback (UDN)
In case you missed it, last Friday was the first day of spring in the Northern Hemisphere. Happy people planted gardens, expecting a harvest in a few months. Meanwhile, Obama and company were planting their own seeds in our nation’s capital. However, these seeds won’t turn into cauliflower...
Long On Liquidity and Short On Profitability
Bonehead move of the 1st Quarter goes to the FDIC. They placed a negative rating on a bank located in Massachusetts due to the fact that it was not lending enough. You heard that right, the FDIC slapped East Bridgewater Savings with a rare “needs to improve” rating after evaluating the bank under...
Falling Banks and Standing Senators
Senators John McCain and Richard Shelby just became my nominees for persons of the week. Yesterday, Shelby discussed the banking crisis on ABC’s “This Week with George Stephanopoulos”. On speaking about America’s largest banks, “If they’re dead, they ought to be...
Citigroup: Dangerous Penny Stock
For decades, agencies like the SEC have warned investors about the dangers of “penny stocks.” There is even a special statement your broker is required to give you before you can buy such a stock. It tells you scary things like this: “Penny stocks are low-priced shares of small...
Bad Idea: H.R. 1068
Congress is considering legislation to impose a securities transaction tax of 0.25% on every stock trade, which of course is equivalent to 0.5% for each round trip. It’s known as H.R. 1068: Let Wall Street Pay for Wall Street’s Bailout Act of 2009. As currently written, the bill amends...
Who Do You Trust?
Let me take you back a few years. A generation or two ago, most Americans were ignorant about Washington. For whatever the reasons, most of us trusted our politicians. We thought they would speak the truth about foreign policy. We didn’t think they wouldn’t ever lie about major events. We...
Not a Touchdown, Timmy!
What an appalling day. Our U.S. Treasury Secretary, Timothy Geithner (aka Turbo Tax Timmy – I like that moniker), tells us how the Treasury is fully on the crime scene today, with additional capital injections and some sort of murky public/private program to buy toxic assets. All this noise sounds...
Stressed Banks Need No Test
Today the new Treasury Secretary, Tim Geithner, unveiled the administration’s New & Improved but remarkably non-specific plan to save the banks from themselves. It is simply more of the same throw-money-at-the-banks strategy the Bush team tried last fall. It didn’t work then, and it won’t...
