Prepare for Inflation May 20, 2009
Posted by Andy Robinson in : Uncategorized , 2commentsIn attempting to fix our economic problems of debt and over-consumption, the US government is flooding the country with dollars raised by more debt. The Fed maintains that it will turn off the liquidity spigot at the first sign of inflation, but the political reality is that they will keep rates too low too long for fear of us slipping back into a double-dip recession just when we are starting to emerge from the woods. Although we are likely 6 months away from seeing many tangible signs of inflation (although food prices have spiked recently), now is the time to take active steps to protect one’s purchasing power.
Bear Rally versus New Bull May 11, 2009
Posted by Andy Robinson in : Uncategorized , add a commentSince March 9th we have witnessed an explosive 37.5% rally in the S&P 500 index on renewed optimism that economic indicators are declining at a slower pace, and that the US is poised to return to growth before the end of 2009. While this may in fact may pan out to be true, the dramatic rally has increased the inherent risk in owning stocks by making them no longer cheap. Historically, we see price to earnings multiples in the high single digits when a bear market has run its course during a recession. Based on analysts’ current earnings projections of $57.17 for the S&P 500 in 2009, we would currently be paying 16 times earnings for the index (which is about the historical average). Buying stocks at an average multiple for what looks like below-average growth potential for at least several years to come appears foolhardy.
Angst returns to global markets August 15, 2007
Posted by Jenna Robinson in : Uncategorized , add a commentGlobal shares have fallen again as concerns about world credit conditions - driven by problems in the US mortgage sector - continue to worry investors.
On Tuesday, the Dow Jones lost 1.6% to 13,029 points and the Nasdaq fell 1.7%.
Around the world, London’s FTSE 100 fell 1.4% to 6,058 points by 1200BST while Japan’s Nikkei-225 index dropped 2.2% to finish at its lowest close in eight months. In Hong Kong the Hang Seng closed down 2.9%, while in Europe France’s Cac 40 index lhad ost 1.5% and Germany’s Dax index slipped 0.3% in morning trading.
Generic revolution in drugs August 9, 2007
Posted by Jenna Robinson in : Uncategorized , 1 comment so farThe International Herald Tribune reports that the next few years could be volatile ones for the pharmaceutical industry.
With many drug patents expiring, experts predict that generic replacements will keep drug price inflation in the single digits for the next several years. This is good news for consumers; as recently as 2002, the annual drug inflation rate was 18.5 percent.
It’s not such good news for pharmaceutical companies, many of which are losing their biggest money-makers in the next few years. One way the pharmaceutical industry is working to counter the generic trend is through its own generic subsidiaries and contracts for the production of company-authorized generics. Such drugs currently account for 9 percent of prescriptions dispensed in the United States, according to data from IMS Health.
Fed says inflation main worry August 8, 2007
Posted by Jenna Robinson in : Uncategorized , add a commentIn spite of other risks, including volatile financial markets and rising default rates in the U.S. subprime mortgage market, the Federal Reserve Board says that the risk of inflation is its biggest worry, according to Reuters. The decision by the central bank’s Federal Open Market Committee kept the overnight federal funds rate at 5.25 percent. Their worry seems justified. Although there has been some moderating of core inflation, oil prices reached a record high $78.77 a barrel on August 1.
Generation gap? About $200,000 May 21, 2007
Posted by Jenna Robinson in : Uncategorized , add a commentFrom USA Today:
The growing divide between the rich and poor in America is more generation gap than class conflict, according to a USA TODAY analysis of federal government data. The rich are getting richer, but what’s received little attention is who these rich people are. Overwhelmingly, they’re older folks…. Older people have always been wealthier than younger ones. What’s changed is the disparity between the generations. Old people have been racing ahead, helped by government retirement benefits. Young people are running in place, partly because they’re delaying careers to get more education…. The financial shortfalls of Social Security and Medicare over the next 75 years are so large $340,000 per household that they dwarf the wealth of every age group. This hidden debt will make it a challenge for young people to accumulate as much wealth late in life as their parents have.