Looking for a fresh villain to pounce on?
Look no further than the latest media miscreant, hedge funds.
First there was Calpers, the humungous California retirement fund, exit and now the Securities and Exchange Commission has joined the fray. As every animal knows there's nothing like the fresh smell of blood.
Now truth be revealed--and it hardly ever is--Calpers was hardly a babe in arms when they decided to go the hedge fund route. They are not above their fair share of greed and chagrin about under performance.
These boys and girls wanted exposure to assets that were seemingly beyond their collective expertise.We use the term collective here advisedly. Oh what a straight and narrow arrow hindsight is. One of the reasons Calpers cited for its exit is fees, usually understood by man, woman, child and God as 2 percent of assets and 20 percent of returns.
And that omits any deals or leverage these huge state retirement funds wield. Briefly put, it's a lot.
Enter stage left Andrew Bowen, director of the SEC's Office of Compliance Inspections and Examinations. According to the Wall Street Journal, Bowen's office "found a series of deficiencies at the roughly 185 hedge-fund firms in which it completed exams."
Bowen and his horde of bureaucrats claim they want to examine 40 percent of the reportedly 1,500 hedge funds out there.
Hedge funds are not new. They've been around much longer than ETFs. After all this time the agency is just getting around "to scrutinizing" their activities and large public pension groups like Calpers are noticing the high costs associated with investing in them.
And MSM, true to its code, picks up the critical baton. Have hedge funds been guilty of some questionable behavior? Here's the answer with another question: Have bureaucrats and politicians been guilty of the same?
The real question is which of the two groups have done the more damage? Our money is on the b-p crowd.
Did you ever hear the one about......
C. S. Green
Middle class no more.
For a long time now we're been clamoring that bureaucrats and politicians have been purposely decimating America's middle class.
It's not an accident despite what MSM apologists might try to sell you. And don't for a second think that immigration hasn't been part of that plan, not so much intentionally as unintentionally owing to stupidity and political pandering.
Unintentionally or no, the direct effect is the same. It was once a badge of honor for immigrants to land here and work their way to middle class. These people learned the language, assimilated and were proud of it.
Now, however, there's not a middle class for one to work his or her way to. Some will blame the rich for doing what they do best--get richer. But blaming them is like blaming a brain surgeon for improving his skill.
Working one's way to middle class is also about getting better. Here a quote from an interesting read on:
http://www.blacklistednews.com/This_Is_About_As_Good_As_Things_Are_Going_To_Get_For_The_Middle_Class_–_And_It’s_Not_That_Good
The U.S. economy has had six full years to bounce back since the financial collapse of 2008, and it simply has not happened. Median household income has declined substantially since then, total household wealth for middle class families is way down, the percentage of the population that is employed is still about where it was at the end of the last recession, and the number of Americans that are dependent on the government has absolutely exploded. Even those that claim that the economy is "recovering" admit that we are not even close to where we used to be economically.
Many hope that someday we will eventually get back to that level, but the truth is that this is about as good as things are ever going to get for the middle class. And we should enjoy this period of relative stability while we still can, because when the next great financial crisis strikes things are going to fall apart very rapidly.
t. man hatter
First they said there wasn't, then they said there was and now they're saying there isn't.
That's the latest, according to the Wall Street Journal, from Chinese Finance Minister Lou Jiwei about another economic stimulus package for the world's second largest economy.
The news is out that China's probably not going to meet its 7.5% GDP growth target and the shivers and shakes are rolling through commodity markets. But the real truth is the number was bogus anyway.
Most of these numbers to begin with are cooked. As an old crony trader once told us, markets love excuses to react. And anyone who thinks the Fed's numbers are any different doesn't understand the term bias.
On down market days when nobody can find a valid reason for a sell off, old timers use to call it profit taking. But profits get taken everyday and the market doesn't go down. Mark Twain put it a bit differently: "One of the most striking differences between a cat and a lie is that the cat only has nine lives."
Metals took the brunt of the so-called bad news Monday, copper, zinc and nickel. But a few days earlier iron ore, an orphan child in this market if there ever was one, led the downturn by hitting a new low, its lowest since 2009.
Here's what Bloomberg calls its chart of the day. Investors got wrong-footed when they bet China would cough up another stimulus package at the first sign of more economic weakness. Brent crude oil futures, as the charts sows, peeled off 1.4% to close near its lowest level since mid-2012.
Extrapolating from last April when Chinese officials puffed up parts of the market including housing investors were looking for more of the same. So far they're still looking, looking, looking.
Nobody is correct all the time.
And nowhere is that probably more personified than in markets, especially market tops and bottoms.
It's easy to be too early or even get caught up in a value trap. In 2006 a colleague wrote an article about the real estate bubble.
http://www.safehaven.com/article/4545/the-love-song-of-the-us-home-owner
It was a bit too early. Many of his clients and readers objected at the time. But he made some serious money following a simple credo: buy right and sit tight. In his case he sold right and waited. Serious money means different numbers to different people. That's up to you.
Iron ore overnight last night hit a new low. Mining company stocks are getting hammered again along with precious metals. Seriously over sold sectors make the news almost daily. Pessimism is maximum here, an old saying of the late Sir John Templeton, one of the last century's best investors.
Find maximum pessimism, do your homework. Then buy right and sit tight. Done correctly you'll find some well-earned happiness. Lots of it in fact on your way to the bank.
Here's a length to some good advice in a beaten down sector. Read, research, react. Stay focused. It's about the money.
http://www.mining.com/web/i-was-early-but-im-still-buying-frank-giustra-fiore-financial-corp/
