I have repeatedly warned that some of the biggest investors in toxic Subprime mortgages are money market funds, especially those boasting above average returns. Let’s be clear about this. Any investment, even a money market fund, which offers an above average return, has to also take an above average risk.Some firms will avoid passing on the losses to the investors …
The Perfect Storm
I read this excerpt from the Economist (sorry no link available), which said: The size of the banks’ bets is rising rapidly the world over. This is because potential returns have fallen as fast as markets have risen, so banks have had to bet more in order to continue generating huge profits. The present situation “is not dissimilar” to the …
No Load Fund/ETF Tracker updated through 2/28/2008
My latest No Load Fund/ETF Tracker has been posted at:http://www.successful-investment.com/newsletter-archive.phpA sharp correction to the downside turned a positive week into a negative one. Our Trend Tracking Index (TTI) for domestic funds/ETFs remains now +0.02% above its long-term trend line (red), which means we are in borderline territory. The international index dropped to -7.74% below its own trend line, keeping us …
More Easing Ahead
I saw this picture sometime ago at Minyanville and thought it was hilarious given the current market environment. Fed chief Bernanke made it fairly clear yesterday that interest rates would move lower given that “the economic situation has become distinctly less favorable,” and “the risks to this outlook remain to the downside.” This was an obvious sign for the dollar …
A New Bull Market?
With yesterday’s higher close, our Trend Tracking Indexes (TTIs) are now situated in respect to their long-term trend lines as follows: Domestic TTI: +0.62%International TTI: -4.77% As you can see, yesterday’s market activity pushed the domestic TTI slightly above its trend line. Since our Sell on 1/18/08, we’ve had this very same scenario on several occasions as prices bounced slightly …
Good Bank—Bad Bank
Yesterday’s rally clearly was a follow through from Friday as Wall Street embraced S & P’s affirmation of the AAA rating of bond insurer MBIA—at least for the time being. The main concern has been that any downgrade would force banks and other financial institutions to write off billions of dollars in assets. That means that motivation is high to …