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Latest Insight & Opinion

Cheap Labor – ECRI 09-01-15

Salient to Investors: The official jobless rate is a misleading indicator of employment. The ‘jobs recovery’ has been led by cheap labor, with job gains going disproportionately to the least educated and lowest-paid workers. The stagnation in nominal wage growth is consistent with the weakness in the employment/population (E/P) ratio.

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China Boosts Efforts to Keep Money at Home – The Wall Street Journal 09-01-15

Salient to Investors: Many investors move money out of China in ways that circumvent its tough limits. China’s foreign-exchange reserves reached nearly $4 trillion in 2014 but have dropped by more than $341 billion since. CBRE estimates that Chinese investment in overseas commercial properties totaled $6.5 billion in half1 2015

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Why the Federal Reserve should be audited – New York Post 08-31-15

Salient to Investors: The Fed needs to be audited to determine if it has manipulated financial markets, which is not in its jurisdiction. Autonomy for the Fed ended when it started playing footsie with Wall Street. The bubble in stock prices was created by years of risky Fed policy. Even the

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Fareed Zakaria GPS – CNN 08-30-15

Salient to Investors: Fareed Zakaria said: The US economy has recovered nicely. A 2014 UCLA study found that many black and Latino students face almost total isolation from white and Asian students and middle-class peers. Much more Saudi oil wealth has gone into pernicious causes over the last 30 years

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Contra Corner Gets Some Company – The NYT Highlights Four Who Saw it Coming – David Stockman’s Contra Corner 08-26-15

Salient to Investors: David Stockman writes: Expect a central banker to soon herald that more monetary heroin is coming, triggering a market rally and pronouncements that its “correction” is over. It will take time for the market to lose its unwarranted faith in central bank omnipotence. However, money will now be made by selling

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‘Don’t overburden central banks,’ says India’s Rajan – BBC News 08-25-15

Salient to Investors: Raghuram Rajan at Reserve Bank of India said: Central banks’ use of cheap money to tackle economic problems, rather than painful reform, has to stop and continuation risks doing more harm than good. Central banks cannot carry the whole burden and may not have the tools to deal with demographic change

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What next for the global economy after China market woes? – BBC News 08-25-15

Salient to Investors: Global growth is changing but we are not on the verge of a global recession. UK and US growth is solid, and the Eurozone is staging a weak recovery. China’s stock market drop says little about the health of the Chinese economy and matters little to investors outside China,

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Signs, Long Unheeded, Now Point to Risks in U.S. Economy – New York Times 08-25-15

Salient to Investors: More and more analysts are pointing to problems in China and other markets as posing a real threat to the American economy. Raoul Pal at the Global Macro Investor said the global GDP pie is shrinking and cites the dollar’s upward move against nearly all emerging-market currencies. In

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This Swan Is White! – Seeking Alpha 08-25-15

Salient to Investors: Ivan Martchev at Navellier & Assoc writes: Last week’s equity collapse was predicted by the dramatic increase in the spread between junk bonds and Treasuries. Credit spreads are good overall indicators. The sell-off in junk bonds was caused by weak commodity prices: new capacity in hard commodities and energy has

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Forget The Dips, Sell The Rips – David Stockman’s Contra Corner 08-24-15

Salient to Investors: David Stockman writes: The S&P 500 has sliced through both the 50-day and 200-day moving averages. 2130 on the S&P 500 will prove to be a generational high.  CAT, China, European luxury brands, the NASDAQ Biotech Index are shorts. Expect the Fed to announce they are well short of

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