Musings.

Musings

The world, the economy, the markets, and our lives are dynamic. Events can have a large or small impact on us. They can create excitement, cause fears, raise questions, and spark insight.

Listed here are our most spontaneous, timely, and succinct comments on wealth, life, and more.





  • March 25, 2010 - Near universal reliance on government funded support

    Reuters reports the Dubai government offered 9.5B $US for Dubai World restructuring. Near universal reliance on government funded support (from Abu Dhabi and Dubai) to keep the government backed investment operation afloat underscores the timidity of private investment in this former high flier.



  • March 25, 2010 - Fitch downgraded Portugal in an acknowledgment of spreadi

    Fitch downgraded Portugal in an acknowledgment of spreading fiscal weakness through the Euro zone. Agence France-Presse reports. The Socialist government reaction to the downgrade, "Finance Minister Fernando Teixeira dos Santos said there was 'no need' to propose additional austerity measures." Meanwhile The Economist estimates Portugal's 2010 budget deficit at -8.6% -- a favorable benchmark next to the US, UK and Spain. The Economist. Sounds like a recipe for deepening distress.



  • March 24, 2010 - Hawk100 has accepted its newest Member who joins Hawk100

    Hawk100 has accepted its newest Member who joins Hawk100 at the HawkHunt service level. Welcome to Hawk100! We look forward to helping you align your wealth with your life.



  • March 23, 2010 - Obama signs health care reform into law capping "a yearlo

    Obama signs health care reform into law capping "a yearlong political drama ... Now, he must sell the law's merits to a wary American public." as reported by WSJ. This puts the cart squarely before the horse. Obama and the democrats needed to build public support in advance of the bill, not after it became law.



  • March 23, 2010 - Nikkei and Reuters report that Japan is fiscally challenged for

    Japan government to face big fund shortage in 2011/12 Nikkei and Reuters report that Japan is fiscally challenged for next year unless it cuts spending or issues debt (raising the risk that its sovereign rating is cut). The shortfall could reach $78 billion on GDP of $4.1 trillion. This appears constrained relative to the US, UK and others with fiscal shortfalls in excess of 10% of GDP.



  • March 23, 2010 - Senate Banking Committee advanced legislation to reform t

    Senate Banking Committee advanced legislation to reform the financial industry. The legislation would create a systemic risk regulator and empower the Federal Government with far reaching controls of financial commerce. Like Health Care, while the system may need reform, this proposed legislation appears to strengthen the impediments to reform while averting the real causes to the crisis.



  • March 22, 2010 - ObamaCare is full of complexities, including differing ta

    ObamaCare is full of complexities, including differing tax effects. Just to keep track will employ thousands of accountants and attorneys. Tax Foundation, Timeline of Tax Provisions in the House Health Care Bill



  • March 22, 2010 - ObamaCare passed House on highly divisive vote 219-212 ov

    ObamaCare passed House on highly divisive vote 219-212 over the weekend. US stocks shrug off the news to achieve a modest advance today. Like a Hollywood horror film, we are desensitized to the legislative agenda.



  • March 19, 2010 - Looming approval of ObamaCare in congress this weekend gi

    Looming approval of ObamaCare in congress this weekend gives cause for caution. We have expressed concern for the potentially far reaching aspects of the plan and its unintended consequences throughout the economy.



  • March 18, 2010 - Article 109

    In concert with yesterday's release on PPI, CPI, the consumer price index, was unchanged for February and only up 0.1% excluding food and energy. The question is whether this is a temporary lapse in otherwise inflationary environment, or an indication of long run price stability. The economy remains at odds with itself. Some indicators show prosperity, other indicators show danger.



  • March 17, 2010 - PPI reported for February was benign. The headline produ

    PPI reported for February was benign. The headline producer price index declined 0.6%, and the core (ex food and energy) rose just 0.1%. PPI measures the average price level of capital and consumer goods at the producer level. It can be a leading indicator of consumer prices and general inflation.



  • March 16, 2010 - The Fed released its statement today following its regula

    The Fed released its statement today following its regularly scheduled meeting of the FOMC. The statement describes a peaceful picture of economic stability with such words as follows. "economic activity has continued to strengthen," "labor market is stabilizing," "household spending is expanding," "business spending ... has risen significantly," "inflation is likely to be subdued," and "improved functioning of financial markets."



  • March 16, 2010 - SAFT reported full year results for 2009. Based on its o

    SAFT reported full year results for 2009. Based on its operations and reported results, our opinion remains that SAFT offers attractive valuation, stable business prospects, and sound investment.



  • March 16, 2010 - Reuters is reporting that SVU "could be getting ready for

    Reuters is reporting that SVU "could be getting ready for a leveraged buyout." Shares have "surged" on the rumor though analysts "remain doubtful."



  • March 15, 2010 - China adopts harder line on US as it pushes back on curre

    China adopts harder line on US as it pushes back on currency policy. The US is in no position to lecture China from its current fiscal and monetary status. Most likely, this is nothing more than hot air blowing between world economic powers vying for supremacy. A worse possibility, this is a continued fracture of relations between two reluctantly trading partners.



  • March 12, 2010 - Mixed economic signals resulted in a flat market today.

    Mixed economic signals resulted in a flat market today. All was quiet this week on Wall Street. Next week should not be as calm with triple witching Friday when derivatives contracts expire.



  • March 11, 2010 - Household net worth rose in the US for the third straight

    Household net worth rose in the US for the third straight quarter as consumers cleaned debts off their balance sheet and enjoyed continued rallies in securities prices. "U.S. household debt fell 1.7% in 2009 ? the first annual drop since the Fed's records began in 1945. A 22.7% rise in government debt, though, more than offset the decline. In all, U.S. private and public debt rose 3.4% in 2009, to $34.7 trillion." WSJ.



  • March 05, 2010 - Reuters reports that Morgan Stanley said, "U.S. corporate

    Reuters reports that Morgan Stanley said, "U.S. corporate borrowers amassed the most cash relative to debt on record through the fourth quarter and will likely preserve cash levels this year...Cash amounted to just under 30% of debt in the fourth quarter." For individual securities held in Hawk100 member portfolios, the weighted average cash amounts to 46% of TOTAL liabilities.



  • March 05, 2010 - Although the U.S. lost 36,000 jobs in February, the unemp

    Although the U.S. lost 36,000 jobs in February, the unemployment rate held steady at 9.7%. Surely weather had a short term effect in the jobs numbers, but a bigger factor over the long term is the minimum wage policy. Today's Wall Street Journal Outlook editorial The Lost Wages of Youth captures the devastating economic impact of a misapplied policy initiative.



  • March 04, 2010 - The House passed the new jobs bill sending it back to the

    The House passed the new jobs bill sending it back to the Senate for final approval. The legislation seeks to offset the cost of programs with "tools to make it easier for the Treasury to prosecute individuals trying to hide earnings offshore from the Internal Revenue Service and delayed a tax break allowing U.S. multinationals to write off their world-wide income from U.S. income for tax purposes." (WSJ)



  • March 03, 2010 - Using the Visa in your pocket may get easier if a proposa

    Using the Visa in your pocket may get easier if a proposal from the Federal Reserve Board goes through. The proposal restricts interest rates and penalties associated with credit cards. This reigns in credit card issuers but offers no incentive for responsible credit card use. Irresponsible borrowers were complicit in the financial crisis, too.



  • March 03, 2010 - Maybe Rover can retrieve SVU. Minneapolis Star Tribune r

    Maybe Rover can retrieve SVU. Minneapolis Star Tribune reports the grocery is adding a store-brand line of pet foods and supplies, WholeCare Pet, to broaden appeal in the tough retail environment. SVU expects private label sales to account for 19% of all sales by end of fiscal 2010. Growing private label brands should benefit SVU financial results when economic pressures increase.



  • March 02, 2010 - Proposed 401k rules could affect relationship between inv

    Proposed 401k rules could affect relationship between investors and their advisors. Proposed 401(k) Reforms Stir Debate Hawk100 agrees in principle that advisors should provide full disclosure of their fees and compensation methods so investors can judge their recommendations with full understanding of potential conflicts of interest. Otherwise, the proposal appears to take another far reaching step over the line of regulatory intrusion. Bradford P. Campbell who served as the assistant secretary of labor heading the department's Employee Benefit Security Administration from 2006 to 2009 said, "I am very concerned that the Labor Department is considering defining 'generally accepted investment theories' and mandating or prohibiting investment practices,"



  • March 01, 2010 - Investors really liked what they read this weekend in the

    Investors really liked what they read this weekend in the 10Q from NX. The stock rocked ahead by $2 per share after a strong earnings release last week. NX continues to show robust cash flow and appears poised for returns to shareholders with its streamlined business lines.



  • March 01, 2010 - Wealth distribution is an interesting dynamic. AIG she

    Wealth distribution is an interesting dynamic. AIG sheds its Asian operations to Prudential for $35B. Not long ago, Prudential was "rescued" when it sold its securities segment to Wachovia...which was subsequently "rescued" by selling its business to Wells Fargo...which was subsequently "rescued" by TARP cash...the same program used to "rescue" AIG. TARP recipient JPMorgan was part of the team that advised Prudential. TARP beneficiaries Goldman and Citigroup advised AIG. TARP beneficiary Morgan Stanley advised the NY Fed which will receive $16B for its preferred interest in AIG's AIA Asian division. What goes around, comes around.