A few key reads this morning

  • Canadian stock market volume slump deepens (buying volume is anemic in other stock markets too.  Maybe retail investors aren’t as “dumb” as Wall and Bay Street thinks after all.)
  • The trillions the government doesn’t account for
  • Birth Citizenship controversy heats up (protectionism is growing, but in our aging populations, immigration is life blood)
  • Euroland will pay for this monetary madness
  • Will Wall Street ever face Justice?
  • Confessions of a reformed broker:  Josh Brown:  “In 2008, everything really crystallized for me. The market was melting down. But at the retail brokerages, there were analysts still picking stocks. Nobody said, “Go to cash.” That’s when you realize: This has nothing to do with taking care of clients and everything to do with generating gross commissions. I put people into cash in some instances. I tried to put some people into gold and bonds. The problem is, as a retail broker, you don’t make commissions when you sit in cash. You put all your clients in cash, you are going to end up going to the soup kitchen.” [yes, but then there are all the fee based advisors who never sell stocks either…they buy when ever you happen to give them money and they have no rules about when to reduce risk.  They charge a fee but offer no valuable risk management.]
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4 Responses to A few key reads this morning

  1. michael says:

    “Long Days Journey Into Night”

    The collective madness continues.
    “Yes forget! Forget everything and face nothing!”…. James from the stage play.

    We are all participatory. Yes even us, the unwashed, with our apathetic scorn.
    Our Paradise to lose, and so we have, on our road to perdition.

    “Him the Almighty Power Hurled headlong flaming from th’ethereal sky With hideous ruin and combustion down To bottomless perdition, there to dwell In adamantine chains and penal fire.”….John Milton (Paradise Lost )

  2. John says:

    Retail investors no longer trust “Wall Street.” And more and more view stocks as a bad investment. By that I mean, the risk does not justify the reward.

    It’s likely that since 2000, most investors may have been better off in GICs. Not ahead, just better off. If retail investors truly understood after-tax, inflation-adjusted ROR (which will likely be even worse for tax-deferred accounts), they would shun stocks even more so, since most invest in stocks as part of their retirement plan.

    Today, analysts are at a loss to explain the low volumes. Which just goes to show how out of touch most of them are with the actual humans who buy and sell securities in these markets. HAL is doing just fine, though.

    Another factor is the Baby Boom generation. They are now switching into net selling mode, from the net buying mode they were in for the last 30 years. It could be that for the next 20 years, supply will exceed real demand in stocks and bonds. No good for prices.

    As for the “trillions governments don’t account for”, the response will likely be nothing short of the greatest, sustained monetary inflation in history. Oh wait, it’s already well underway. Perhaps that explains higher stock prices on lower volumes. Is Joe Granville’s thesis dead? Maybe only in nominal terms.

  3. Taylor says:

    David Stockman’s Q&A with the Associated Press is another must-read.

    “I wouldn’t touch the stock market with a 100-foot pole. It’s a dangerous place. It’s not safe for men, women or children.”


  4. Robert Lynn says:

    I disagree that investors would have been better off in GICs since 2000. People were spoiled by 20 years of highers highs and higher lows and were not challenged to learn how the market works, how t develop an investment strategy, and how to manage risk. A generation of brokers also grew up without the need to become craftsmen in the trade. Now we are swamped with knee-jerk regulations that constrain the investment industry and attempting to make the process idiot proof for idiots. The problem is that idiots do not do well in the markets no matter how many regulations governments impose. The result is that brokers are unable to properly serve their clients because they are not educated in the real markets and second they are mired in the constraints of modern portfolio theory and asset allocations. If a broker does take their clients to cash they find themselves in extreme legal jeopardy if the market suddenly rises even if the market eventually goes significantly lower. Are you living up to your Portfolio Manager designation if you go to cash or will you be fired or sued?

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