Salient to Investors: Lee Adler writes: We are in the first leg of a bear market. Markets are neither crazy nor sane, but measure and reflect liquidity. The two official rules are a) the trend is your friend, and b) don’t fight the Fed. Be positive in your coverage of
READ MORE... →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
READ MORE... →Fareed Zakaria said: The greatest vulnerability for Israel is its legal jurisdiction over 4.5 million Arabs who have neither a state nor a vote – a situation that cannot last in a democratic society. The Stockholm IPRI says Israel’s defense budget is larger than that of Egypt, Jordan, Syria and Lebanon
READ MORE... →Salient to Investors: New research suggests the advice analysts give in bad times seems to be even worse than the boosterism they peddle in good times. Roger Loh of Singapore Management University and René Stulz of Ohio State found: Analysts’ forecasts of profits and buy/sell recommendations from 1983-2011 were less
READ MORE... →Salient to Investors: Policy makers and some Wall Street veterans see a banking system still too leveraged, complicated and interconnected to withstand a panic, and regulators ill-equipped to head one off — the same conditions that led to the last crisis. Stefan Walter said we are safer, but not safe
READ MORE... →Salient to Investors: William D. Cohan writes: The appalling but unsurprising news that Robert Khuzami, the former enforcement director at the SEC is joining a prominent Wall Street law firm at a $5 million-plus salary is the latest example of the corrupt relationship between money and power in the US. Senator Carl Levin said this
READ MORE... →Salient to Investors: William D. Cohan writes: Mary Jo White’s SEC is trying to make Fabrice “Fabulous Fab” Tourre the poster child for the financial crisis of 2008. This could not be further from the truth. A low-level vice-president such as Tourre has only one responsibility: to do what he is told
READ MORE... →Salient to Investors: William D. Cohan writes: What caused the financial crisis remains unheeded and serious trouble is brewing. The debt markets have once again mispriced risk when junk bonds yield a mere 5 percent. Wall Street still suffers from inadequate risk management and improper incentives. Until these problems are
READ MORE... →Salient to Investors: Hedge funds continue to be an overpriced, middling asset class. Goldman Sachs found that hedge funds returned an average of 5 percent in 2013 versus a 15 percent gain in the S&P 500, while only 5 percent of the funds beat the S&P and more than 1
READ MORE... →Salient to Investors: Hedge funds using debt-trading strategies are expanding at a record pace as they profit from risks big banks are no longer taking. Roy Smith at NYU said regulators in the US and Europe want to transfer risk to the shadow-banking system and interferes capabilities of the large banks
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