Juggling Dynamite

Conflict is not loved by most people, and certainly not by 63 year old, likeable law professors. But sometimes conflict is a necessary part of the journey to meaningful reform. Elizabeth Warren has her conflict cut out for her as she tries to speak truth to power amid the incestuous tentacles of the Senate Banking Committee and a finance sector that has run treacherously a muck the past few years. May the force be with Elizabeth.

“Wall Street CEOs — the same ones who wrecked our economy and destroyed millions of jobs — still strut around Congress, no shame, demanding favors, and acting like we should thank them,” Warren said at the convention. “Anyone here have a problem with that? Well I do.”

–Elizabeth Warren, newly elected Democratic Senator for Massachusetts

Ms. Warren embraced policies during her campaign that make big-bank officials cringe, including reinstating Glass-Steagall, the Depression-era law that separated commercial and investment banks.

“Wall Street has reason to be afraid. She will add to…the voices in Congress saying that the megabanks need to be downsized,” said Camden Fine, president of the Independent Community Bankers of America, a trade group that also supports breaking up the megabanks.”

See: Banking’s “worst nightmare” takes her fight to the Senate.  Also see: The importance of Elizabeth Warren  and Three Cheers for Elizabeth Warren

Bill Gross, Co-CIO, Founder & Managing Director of PIMCO, explains why higher tax rates in the New Year, would mean that dividend paying stocks are presently over-priced. Here is a direct link.

Good interview with GMO’s Jeremy Granthan looking at the investment implications of declining population growth, the end of the debt super-cycle, lower global GDP, and the historical prospects of the first year of the US Presidential Cycle which we entered on October 1. See: Charlie Rose talks with Jeremy Grantham:

“As an investor, what do you do?

“I’ve hero-worshipped the presidential cycle. Going back to 1932, if you take the first and second year together, they’ve had no real return in the market. All of the return has been compressed into a gigantic Year Three and a respectable Year Four. For us, the cycle years start on October 1st. So now we’re in the dreaded first year. And we have Republicans threatening to add fiscal constraints into a very fragile economy. We have the European situation. We have China stumbling in an incredible slow-motion style. I think it’s a really good year to keep your head down….

I am going to be careful, particularly for the first half of next year. Great brands of blue chips are not so bad in the U.S. Emerging countries are about fair price. Beaten-down European stocks, particularly the so-called value stocks, are probably a little cheap, although risky. And resource stocks, once they reflect the weak economy—and we’ll get another whack-down—will be a wonderful long-term purchase. Farmland and forests, which should be the backbone of any long-term, serious portfolio. … It will also be a good time to buy in. “