Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

Archive for the ‘macro econ’ Category

Expectations: Mish’s Global Economic Trend Analysis

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Mish’s Global Economic Trend Analysis.

Mish’s posting linked above is a must-read-and-understand summary of expectations for stock investors who stick, unfortunately, with ‘buy and hold’ methodologies.

Written by heyercapital

August 23, 2011 at 4:44 am

Posted in charting, macro econ

Commercial Real Estate

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Did the Fed pass out regulatory “Get out of the doghouse FREE” cards to banks today, or imply that workouts are up the banks and the Fed won’t help?

Is this related to investor whale Wilbur Ross warning today against the beginning of a “huge” crash in commercial real estate (CRE)?

Written by heyercapital

October 30, 2009 at 4:25 pm

Posted in macro econ

FDIC & bank failures

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It may be a sign of the times that I received a post-silver certifcate certificate $20 bill in change from Aldis over the weekend.  Our currency – now at new lows – used to be backed by gold and silver.  The currency itself was the contract; each bill said (originally) “There is one on deposit in the Treasury of the United States of America $20 Dollars in Silver Coin payable to the Bearer on Demand.”  Older readers may remember being able to take a paper bill into a bank and receive a silver coin in exchange. (Gresham’s Law in reverse, but that’s another post.)

Naturally, as the government printed more bills (made more promises) than there was coin in the vault, the contact is a fraud. So they changed the contract to “The United States of America will pay to the bearer on demand Twenty Dollars.”  Gee, thanks.  I have a paper promise in my hands and as security the government will give me more paper.  Who wins and who loses in that exchange?

  The bill I received is a fairly crisp specimen from 1950.  Could it be that prior to its brief time at the top of the till at Aldi’s, it was securely nestled all these years in the mattress of a poor pensioner who is just now working her way down, like an archeologist, to that tranche of her savings and reserve?

Enough gravy: here’s the meat.  If you have more than $100,000 in any bank no matter how local and trusted, in any account no matter how its titled, you must  review the rules on FDIC.gov.  Do not rely on the gentle assurances of the teller that your $200,000 CD is just fine.  Pay particular attention to the rule differentiation on pay on death (POD); joint accounts; revocable trusts; and irrevocable trusts.  

Of course, if you have $200k in a CD for general savings or anything other than a time-specific goal we need to chat.

UPDATE:  this good post from Mish Shedlock covers a fair amount of ground too.

Written by heyercapital

July 15, 2008 at 12:41 pm

Recommended reading

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Mish Shedlock deserves your daily attention (or at least let your RSS feed bring it to you.) Here is his blog web site: http://globaleconomicanalysis.blogspot.comThe most stunning news he’s delivered lately is an analysis of a recent mortgage pool with an incredible  15% already in foreclosure. Yet 92% of that pool is still rated AAA.  Toss in the muni market stress, and month-end statements will look darn ugly. 

Written by heyercapital

February 29, 2008 at 1:40 pm

At least something already looks like 1987

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From Mish Shedlock, one of the sharpest tools in the shed, and definitely worth your RSS feed. (Ask your kids and grandkids if you’re not sure what your RSS feed is. No, it’s not a new Monsanto concoction.)

http://globaleconomicanalysis.blogspot.com/2007/08/no-bids-for-corporate-bonds.html

Flight to Safety

Earlier today I noted there was a Flight to Safety as the yield the one-month Treasury bill fell 160 basis points to 1.34 per cent. The yield on three-month Treasury bills tumbled to 2.51 per cent, 123 basis points below Friday’s close – a sharper fall than during the October 1987 stock market crash.

Written by heyercapital

August 20, 2007 at 8:59 pm

Is your money market safe?

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I figured that before this debt and credit addition is all said and done, we’re going to have notable corporate bankruptcies. I just didn’t think we’d get one so quickly.

Is your money market account safe? A large money market provider in Chicago filed for bankruptcy late last Friday after its big bets went awry.

Ask your broker these questions (copy and paste if you want):

“As soon as possible, please reply in writing to my address of record to these questions:

1) Is my sweep settlement account a money market fund or a money market demand account? Is it insured by SIPC or FDIC? What limits apply?

2) Has the investment adviser, investment manager, or principal for my money market fund or sweep settlement account ever defaulted or “broke the buck” on a money market fund?

3) Does the duration of investments within the money market fund match that investment objectives of the fund.

4) Have you heard any information as to the safety of my money market?

5) Is there a course of action you would recommend?

Thank you for your prompt attention to this important matter.”

If your broker doesn’t respond immediately with the answers, he’s either
a) hiding under his desk counting the gold doubloons;
b) ducking your question;
c) doesn’t know;
d) doesn’t WANT to know; or
e) in Vegas at a sales contest victory party.

By the way, your broker’s first inclination will be (because of human nature) to crap his pants and wonder himself, is his own money market safe? When he finds that out that answer, he will gladly let you know.

Written by heyercapital

August 20, 2007 at 9:56 am

Thanks Central Banks!

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Here some perspective: Central banks injected $300 billion into the world in the past nine days (as of Friday 8/17).

Total avg daily GDP for Canada, EU, USA is roughly $80B per day.

Central banks created $300B.

Total GDP for that nine day period was $720B.

Yep, 40% of the total genuine economic output for that period was wiped out by inflation, e.g. false money created out of thin air.

Somebody is scared.

And no, I don’t think years of Wall Street’s credit addiction and wildly manufactured whiz-bang financial products can be liquidated, resolved, and otherwise corrected in just 20 days.

Also, please note that when it comes down to chosing between a) fighting inflation and b) saving Wall Street, the Central Banks will leave the pensioner dangling every time.

Two solutions for you: Read here. Read here.

Written by heyercapital

August 20, 2007 at 9:38 am