Archive for the ‘Banking’ Category

Definition: Leveraged Buyout LBO

Defined: The acquisition of another company using a significant amount of borrowed money (bonds or loans) to meet the cost of acquisition. Often, the assets of the company being acquired are used as collateral for the loans in addition to the assets of the acquiring company. The purpose of leveraged buyouts is to allow companies to make large acquisitions without having to commit a lot of capital.   Read More

Definition: Eurodollar

    Defined: U.S.-dollar denominated deposits at foreign banks or foreign branches of American banks. By locating outside of the United States, Eeurodollars escape regulation by the Federal Reserve Board. Despite the name, Eurodollars do not have to be in Europe, and they are priced in U.S. dollars.   Read More

5% 30 Year Mortgages

According to Lou Barnes, a local mortgage broker who is frequently quoted in the national press, when the 10 year treasury yield hits about 3.33%, we’ll be back to 5% 30 year mortgages. Right now, the 10 year treasury is around 2.775%, up about 1.1% in just a few months.  However, it has stabilized. The big question those in the investing world are asking is whether the yield will continue up, or go back down. If you watch my video, you’ll see that I believe the yield will go back down. But, as Lou points out, the correlation between the ... Read More

The Quarter in Review and Unintended Consequences

The first quarter was a strong quarter, particularly for the unmanaged US stock market indexes. But what is going on in Europe? What might the unintended consequences be of the Cypriot banking issues? I talk about all of this in my video, so I highly encourage you to take a few minutes and listen to my thoughts.    Graphs referenced in the video: Full Graphs Transcript: Good morning. Mike Brady with Generosity Wealth Management, a comprehensive full service wealth management firm here in Boulder, Colorado, and I am so pleased to talk with you this morning because we’re going to ... Read More

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IMF to Kick Out Greece

August 20th is a pivotal date when 3.8 billion Euros are due from Greece to the European Central Bank. The IMF is saying that if this isn’t paid, they’ll stop loaning money to Greece. Once the IMF is done with Greece, will the European Monetary Union be far behind? In my opinion, Greece will exit the Euro sooner rather than later, and this is good for the long term strength of the Euro. How will this affect our US markets? Always the big question. More stability and stronger private balance sheets makes the US a better investment I believe. Here’s ... Read More

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Waving the White Flag

John Mauldin is one of my favorite newsletter writers. This week’s newsletter speaks exactly to what my video above addresses–the elephant in the investment room is Europe. I highly encourage you to set aside 10 minutes to read this weekend’s newsletter. It goes into greater depth than I can in the 3 to 4 minutes for my video. Europe is the concern as we enter the dull summer months.  Waving the White Flag Read More

China’s Inverted Curve

An inverted yield curve in the US has predicted 6 out of 7 worsening economic conditions in our country since 1970. In China, we don’t have the same type of statistics because of their young open economy, but recently their yield curve has “inverted”. I’m watching this and realizing it’s just another of many economic indicators out of China pointing towards a slower economy. I really don’t want much (if any) exposure to the Chinese Stock Market. This also has consequences to the whole global trade market as China is the 2nd largest economy right now. We truly are a ... Read More

Italy’s Crashing Money Supply

Italy is as much as financial trouble as Greece. Their money supply is drying up, and unlike in the US, they don’t have the same tools at their disposal that we have (like printing money). The chart at the right is the money supply at the Bank of Italy. Click for Italy’s Crashing Money Supply Read More

Information, Communication, Back to Basics

What an interesting month! Who would have thought it would turn out to be such a good month just a short 3 to 4 weeks ago? Many people actually, if you seek out alternative voices to that which you see in the daily paper or newscast. I talk about this in this week’s video below. Also, I talk about how you should assess the level of communication in the past 2 to 3 months from your adviser. Did you hear from him/her? You sure as heck should have. Lastly, now is a great time to get back to basics. Click ... Read More

A Spectator’s Guide to the Euro Crisis

By far the easiest and best chart I’ve seen to explain the European problem was published last weekend in the New York Times. If you’ve been wondering if you’re the only person confused by what all the hub bub is about, this is your opportunity to get caught up. Click for an outstanding chart on the European problem Read More

Europe – Echoes of Lehman

The big question we need to answer is “what happens after a Greek default?”. Lehman’s collapse was a full year before the financial crisis of 2008, and it’s very probable the full impact of Europe imploding won’t be felt for some time. We, as investors, need to stay informed and ready to react. Please continue to read my newsletters and blogs, and have my number in your speed dial. 303.747.6455 CLICK FOR FULL ARTICLE – EUROPE ECHOES OF LEHMAN   Read More

Bank Assets as a Percentage of GDP

One of the problems with Ireland is their huge reliance on banking for their economy. How do other countries fair as a percentage of their GDP? Luxembourg 2,461 Ireland 872 Switzerland 723 Greece 141 US 82 Want the full list?  CLICK FOR FULL ARTICLE   Read More

Difference Between Fiscal and Monetary Policy

What’s the difference between Fiscal and Monetary policy? It seems like discussions about these 2 similar, but very different, topics are forever getting confused. If you’re worried about taxes, deficits, and the debt, is that a fiscal or monetary issue? I want you to know the difference so you’re the smart one at the cocktail party discussion.   Read More

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FDIC on checking accounts going to infinity

Starting next year, the FDIC limit on checking accounts will increase from $250,000 to an unlimited amount. What? Isn’t the FDIC broke already? Yes, but why let that get in the way of a government (or quasi-government) policy. This coverage amount will last until the end of 2012.  CLICK FOR FULL ARTICLE – BROKE FDIC EXPANDS CHECKING INSURANCE Read More

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QE Did Not Work in the UK

This is a quarter you’re going to hear about Quantitative Easing. I hate it. It’s my belief the increased money supply will stay on the books of the banking industry to offset any potential commercial real estate downgrades they’ll be making in the future. From the banks’ point of view, it makes perfect sense. For you and me, not so good. How did QE work in Japan and the UK? Not well at all.   CLICK FOR FULL ARTICLE – QE DID NOT WORK IN THE UK Read More

Alternative Funding

This week’s diatribe is about off-balance sheet accounting and alternative financing. I’ve been approached multiple times in the past month or two about investment opportunities funding some activity outside of the normal funding channels (banks or equity financing). This leads me to wonder how much lending is happening in our economy this way and if it’s under the radar. I don’t like the sound of it. Listen to my video below.   Read More

Ten Things Making Me Nervous

If you look back at my 3rd Quarter Preview (here) I mentioned I forecast the 3rd quarter would be up. That’s proving to be a great move (if I do say so myself). But what makes me nervous? This article sums up a lot of my feelings. Does that mean I’m bearish for the 4th Quarter? I guess you’ll have to wait until my 4th Quarter preview in a couple of weeks to find out. Click on this link for FULL  ARTICLE   Read More

Deleverage? No, Default!

Many articles have been written in the past year about the decline in U.S. Household Debt. This is something to celebrate, right? People are paying off their debt, right? Wrong. It is almost scary how closely the decline in US Household debt correlates with the charge-offs of mortgage and consumer loans. People are defaulting, not paying them off. Click for FULL ARTICLE HERE   Read More

How Financial Reform Will Really Work

It’s taken 2 years but some Financial Reform has finally happened. Regulation here we come. I’m not a big fan of most regulation, but regardless of which side of the fence you’re on, here’s a great article that describes how it’s really (probably) going to work. Click for Full Article   Read More

Do High-Cost Funds Pay Off?

It’s the after fee return that matters, and this article is a good one because it talks about the importance of expense efficiency. Just because a mutual fund costs more doesn’t mean it’s better, but then just because it’s cheaper doesn’t mean it’s better either. Click for a further discussion   Read More

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The Dow Jones Industrial Average is an unmanaged, price-weighted index of 30 large capitalization stocks with dividends reinvested.

The Standard & Poor’s 500 Index (“S&P 500”) is an unmanaged, market capitalization weighted index of 500 widely held stocks, with dividends reinvested, and is often used as a proxy for the stock market.

The Nasdaq Composite is an unmanaged, market capitalization weighted index of stocks listed on the Nasdaq Stock Exchange, and are reported as price return without reinvestment of dividends.

Indexes are often used as a proxy for the stock market and cannot be invested in directly.