The Trouble with China’s Evergrande

Beijing has taken preliminary steps to deal with the failure of Evergrande, China’s second largest property developer.  This is not the end of the story, however, not by a long shot.  The picture too closely resembles the beginnings of America’s 2008-09 financial crisis to ignore, though thankfully it is occurring on a smaller scale.  Before it is resolved, … Continue reading The Trouble with China’s Evergrande

The IPO Surge

Even in the face of Covid’s Delta variant, many firms have sought to list on America’s public stock exchanges.  This deluge of initial public offerings (IPOs) carries two seemingly contradictory signals: It reveals tremendous business optimism, on both the economy and for future profits. It announces that the managements of these firms see stocks today as pricey … Continue reading The IPO Surge

Is Washington Running Out of Money?

Treasury Secretary Janet Yellen recently announced that by October the government will come up against its legal debt limit.  Some in the media have interpreted this to mean that Washington is “running out of money,” while others have warned  of a government “default.”  The first characterization is technically true.  Without Congressional action to increase the debt limit, much spending … Continue reading Is Washington Running Out of Money?

Markets Ultimately Are Tethered to Economic Reality

 I got involved in an interesting investment conversation the other day and thought it might inform readers.  The man who engaged me seemed concerned -- no matter what the market was doing.  When stocks run high, as (almost inexplicably) they are now, he confesses to a powerful impulse to sell out for fear that markets cannot sustain their strength.  When … Continue reading Markets Ultimately Are Tethered to Economic Reality

The Delta Challenge to the Economy and Markets

The Delta variant of Covid 19 has frightened many – in authority, in the media, and in the public.  They worry on three counts:  for their individual health;  for the economy, because if the pandemic worsens, the authorities may re-impose the economic strictures that caused so much economic damage last year; they fear that re-imposition of those strictures … Continue reading The Delta Challenge to the Economy and Markets

The Principles

Occasionally –often actually – a reader will ask me to divide my posts into two groups: those that explain general principles of investing and those on specific issues of the day.  Of course, the requests are all phrased differently, but this how I read them.  I can see the impulse behind such requests.  The former can guide investment … Continue reading The Principles

The Inflation Threat

All inflation indicators have ticked up recently.  The cost of living is rising faster than we have seen for at least ten years.  The authorities in Washington – most notably Federal Reserve Board (Fed) Chairman Jerome Powell and Treasury Secretary Janet Yellen – have downplayed concerns over this news, saying the price pressure is “transitory.”  They may be … Continue reading The Inflation Threat

Some Thoughts About SPACS

SPACs (special purpose acquisition companies) have become the rage of late.  It stands to reason that SPACs, or something like them, would become popular. Familiar and traditional equity investments have gained so much for such a long time now that investors naturally are searching for investments that they can believe offer a bargain.  Nonetheless, they should exercise … Continue reading Some Thoughts About SPACS