Blogs

By my count the D.C. mortgage lenders have upward of $1 trillion of loans on their books that were made to achieve social objectives. This has been 'play money' for Congress and past Administrations for years. The boss at FHFA has told Congress this has to stop. Where are chips going to fall on this one?

This sugar story will leave a bitter taste in your mouth. 30 year old stories come back to life. What is the FDA doing? And What does Don Rumsfeld have to do with this?

For the third time, gold soared past the $1,000 level, causing the market to eye the precious metal's record of $1,033.90 reached in March 2008. While Citigroup is predicting a $2,000 scenario by next year due to continuing dollar weakness, a number of bullish factors, both near and long term, have converged to boost gold.

Biz is booming for guns and ammo. This is not one of those 'Green Shoots' however.

The challenges in private markets are also weighing on many institutional investors who are growing increasingly impatient with private equity groups charging hefty fees on the big funds they raised during the debt bubble. It's fair to say that unless activity picks up, private markets will reach a breaking point - one that may weaken the industry for a very long time.

The rules of the game have changed. After the disaster of 2008, pension funds will be scrutinizing their investments a lot more carefully, especially their investments in alternatives like hedge funds, private equity, real estate and commodity funds. Those funds who refuse to adapt will find it extremely difficult to raise the money they need to compete.

P&I's article “Renaissance to open up a bit”, discusses the firm’s quest for institutional money and reads very much like a marketing piece. Yes, RIEF performance this year is just awful and assets have “plummeted 81% to $5 billion as of June 30, down from a peak of $27 billion” but, after "massaging" these numbers, P&I was able to find something positive.

Here are some arguments why one should think twice before jumping in bed with gold bugs, or at least remain sober while determining gold’s weight in the portfolio .

A big monthly deficit for the Trust Fund. This was supposed to be a 2037 problem. Not any longer.

Debt is like herpes: ignore it long enough and it just disappears on its own.

The market's upward momentum this year has hordes of investors still looking for opportunities with good entry points. With crude prices hovering around the $70/bbl range, even with reduced demand, oilfield services remains one of the more promising sectors still with room to grow.

But even when employment eventually picks up, it will be the most meager recovery ever and the pick-up in activity will likely be in sectors like education, health care, infrastructure and alternative energy.

The thinking of the so-called gold bug often takes on a variation of this form: While in the bunker (or any other variance of the “world-falling-apart” scenario), you cannot pay for food with paper money or a stock or bond certificate.

Project Mayhem reviews the most important financial and geopolitical news of the past week and takes a look at the week ahead.

There is little follow through on either side of the equity markets. Outsize bets in either direction are not warranted.