Market Updates
To keep you abreast of current events, we thought you might be interested in these Market Updates in addition to our quarterly letter. Please let us know if you wish to have these intermittent updates sent to you electronically by e-mailing Client Services or call us at 617-210-6700.
November 10, 2011: Global Investment Markets Await Resolution of Euro-Deficit and Sovereign Debt Crisis
Most close observers agree that Greek private and sovereign debt is in virtual default. Ireland is in financial rehab. Portugal is dangerously near the default precipice. Spain’s balance sheet and banking system financial accounts are in a precarious state. Bond market vigilantes have now put Italy in play, pushing it to the political brink with a change of government underway. Too big to fail, too big to bail, Italy becomes the poster nation as the developed country deleveraging process continues.
Read More.
September 23, 2011: Living With Volatility
The daily barrage of dire headlines and renewed financial market volatility has kept most investors in a constant state of anxiety, fear and (justified) anger directed at our global policymakers. In the midst of such heightened global political, macroeconomic and financial uncertainty today, we would like to share some thoughts from Jim Parker, Vice President of the Communications Group at Dimensional Fund Advisors (DFA).
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September 12, 2011: That Uneasy Feeling: Financial Market Volatility Redux
Renewed financial market volatility brings back that uncomfortable sense of anxiety for all investors in risk assets. Markets abhor uncertainty, and wherever one turns today, the unpredictable overpowers any feeling that equilibrium has been reached. The Washington crowd continues its time-honored approach of treating the symptoms, ignoring the long-term causes.
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August 29, 2011: Forecasters Sharply Reducing Future Economic Growth Rate Projections (Slower Growth or "Growth-recession," or "Double dip"?)
Like lemmings, most economists tend to follow their compatriots, run with the crowd and revise their forecasts as often as they dare by shifting degrees of probability and expectation. The media picks up where economists leave it and extract sound-bites crafted to create attention and concern.
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August 9, 2011: S&P Makes It Official (Global Financial Markets Swoon)
Standard & Poor’s delivered on its longstanding threat to downgrade our U.S. Treasury’s long-term debt rating. Its reasoning was broadcast well in advance, but ignored by politicians who have now gone on vacation and are in the process of trying to shoot the messenger. Sadly, the crowd in D.C. still ambles along its circuitous path, groping for ways to save face and get re-elected.
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July 27, 2011: Confusion Abounds
We would be less than candid if we were to suggest we knew how our political class in Washington intends to sort out the mess they have created. With the November 2012 elections in mind, their posturing attempts to gain the voter advantage at every turn has colored the discussion and seemingly stifled the chances of any rational discourse.
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June 1, 2011: Marking Time While our "Zombie Economy" Regroups
In our April 14th letter, we suggested that “The disconnect separating Main Street and Washington from Wall Street persists.” Since then, reported first quarter U.S. economic growth (GDP) numbers have confirmed that despite the Federal Reserve Board's continued attempt to stimulate consumer demand (QE2), our struggling economy has yet to achieve a self-sustained footing and move into a more robust recovery mode.
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March 21, 2011: When (Where) Will It All End? (The Financial Markets Attempt to Discount the Continual Stream of Crises)
Browsing the internet earlier last week, it was impossible to find one item of news with even remotely positive implications. The litany of evermore seemingly endless depressing events buoys the media’s bottom line, but discourages Main Street.
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March 7, 2011: Revolution, Oil, Inflation, and Bernanke's Strategy (What Will the Financial Markets Conclude?)
Just as the global economic recovery was moving into an expansionary phase, events in North Africa and the Middle East intrude to force a full reassessment of the probable outcomes.
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February 7, 2011: Summary of Portfolio Strategy Meeting
During the past week, we met with the firm’s economic and global investment strategy advisors, culminating in a full morning’s Portfolio Strategy Committee reassessment.
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November 1, 2010: Elections (Politics & Policy), QE2, Investor Confidence, and Future Return Expectations
Your vote counts! Without knowing the mid-term election results as this is written, herewith are a few thoughts on the months ahead for individual investors.
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August 31, 2010: A Left-Brain Moment
As many readers of these occasional notes appreciate (in some cases far better than the writer), neurologists have made extraordinary strides in understanding the physiology and behavioral attributes of the human brain. Using functional MRI technology, researchers can now monitor and track the unique blood flow patterns of each person's brain and with reasonable accuracy predict how an individual might respond to a given stimulus.
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June 7, 2010: News or Noise?
At the moment the pessimists have the floor. Job growth continues anemic. But if U.S. firms are now making as much money as they did in 2007 with 7 million fewer workers, and each incremental hire comes with a raft of newly-mandated, costly employment benefits, the incentive to add to payroll expense is at best elusive.
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May 24, 2010: Recalibrate When Circumstances Dictate
When conditions change in the investment markets, it’s best to recognize the new realities and rescale expectations. The well-publicized fear of Greece’s sovereign debt contagion has gained a momentum of its own. In the tradition of Greek tragedian literature, as today’s protagonists in the European community seek to avoid their fate, step-by-step they seem to move ever closer to their inevitable, inescapable destiny. To the Greek malaise now must be added the possibility of similar problems with the Spanish, Portuguese and most likely Italian economies.
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May 2010: Greek Sovereign Debt Contagion
Occasionally, it's a good idea to get out of town, travel to another part of the world, and sample how others view the issues we often think of as so uniquely affecting our own country. Viewed from France these past two weeks (Paris, Verdun, Nancy, as well as Strasbourg), the concern, of course, is the Greek bail-out and whether the Germans should shoulder the main burden of its financial cost; the ultimate worry being whether the contagion will spill over into the other southern tier countries of the European Community.
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August 2009: If one were to assume that inflation, or hyperinflation, will occur, how would one proceed?
Here's a question, sent to us by a client via e-mail, which we suspect is subliminally on the agenda of most investors. The concern arises, of course, since attempting to weather the recent global financial market storm and narrowly avoiding a full-blown deflationary collapse in housing values (particularly in the U.S. and U.K.), world-wide central banks have lowered short-term interest rates to nearly zero.
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June 17, 2009: Notes from Client Event on June 17, 2009
The main take away from Liz Ann Sonders' presentation was that the U.S. economy and perhaps many economies worldwide are in "less terrible" shape today than they were twelve months ago. Admittedly, that statement does not immediately give good reason to cheer. However, it does give reason to argue that the U.S. economy may already be well into a recovery.
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March 30, 2009: The News Continues Depressing and Yet ...
As those around the globe who are concerned with such matters debate the future of capitalism in the U.S., and the political theater in our nation's capital unceasingly plays to a full media house, the financial markets continue to sort through the debris. The numbers are mind-numbing; $ "trn" (trillion) has replaced $ "bn" (billion) in the national budgetary debate, Federal deficits relative to annual Gross Domestic Product have moved from 2-3% of GDP to 15-20%. Read More.
March 10, 2009: Message from the desk of James L. Joslin, Chairman & CEO
At times like this, one attempts to peer beyond the obvious and look for any faint signals in an otherwise bleak situation which might indicate a bottoming process, if not yet a turnaround. When someone like David Kelly, JP Morgan's Chief Market Strategist, with all the resources he has at hand, publishes his thoughts on developments in the areas of paramount concern to us and investors today, there is little to be gained in paraphrasing his work under our letterhead. Read More.
February 23, 2009: The Beat Goes On
The phenomenon of past excessive speculation continues. The hangover from its unwinding lingers without yet evident remedies. The pain that many are enduring because of the overindulgence of a relatively few spreads. This week we (and the rest of the free world) await evidence from Washington that the problems are understood and are being dealt with directly in a manner that has the economy's greater good in mind. Read More.
February 3, 2009: Investing Without Precedent
By now most have developed their own list of the blunders (whether political, central bank policy, regulatory, institutional, or individual investor) responsible for what will likely be the worst global recession since World War II. As we still seem to be in an extension of the "Great Meltdown of 2008," recognizing some of the factors leading to the current financial market and real economy malaise might be worth re-emphasizing; if only to place markers to guide future collective behavior. Read More.
January 15, 2009: DFA Presentation to TFC Clients
On the evening of January 15th, TFC and Aequitas Investment Advisors jointly welcomed some sixty clients to a presentation by Weston Wellington, Dimensional Fund Advisors' (DFA) Director of Research. Read More.
December 23, 2008: "Madoff with Ya Money"
Punsters, pundits, politicians, and lawyers (of course!) are having a field day. Bernie's $50 billion gig is now another page in Wall Street's anthology of shame. Globalization in extremis, another international Ponzi scheme has imploded. Read More.
December 9, 2008: The News Continues Dismal: Why Doesn't the Stock Market Decline Further?
Real GDP for the third quarter 2008 has been revised downward. Job loss numbers for November are attention-getting to say the least. The home price index is off 17% year-over-year. Existing home sales fell again. Read More.
November 25, 2008: Crisis du Jour: Citigroup at the Precipice
Financial markets around the world continue in the grip of severe emotional crosscurrents. The crisis of confidence remains palpable. This week the focus is on Citigroup, until recently one of the planet's "premier" super banks, and a monument to its creator, Sandy Weill. Read More.
November 17, 2008: The News from Lake Woe Be Gone (Will They or Won't They?)
At the moment, all eyes are on the congressional auto company bailout struggle in Washington. Absent the politics, the solution is probably self-evident, and has been for years. But the equation's variables are mired in chits, paybacks, markers, earmarks, and partisanship. Read More.
November 10, 2008: Now Comes the Difficult Part
Finally, the election is behind us! U.S. equity markets reacted with the biggest two day decline since October 20, 1987. The economic news continues dismal. Read More.
November 3, 2008: Past the Tipping Point?
Since the early 1970s, investment professionals and academics have debated amongst themselves about whether the world's securities markets, in their role as real-time information discounting forums, are wholly efficient. Read More.
October 24, 2008: Message from the desk of James L. Joslin, Chairman & CEO
We won't burden you with these messages too often, but after another week of turmoil for investors (more Federal fiscal remedies, additional monetary stimuli, another major decline in stock prices), the unending bout of negatives continue. Read More.
October 17, 2008: Message from the desk of James L. Joslin, Chairman & CEO
By now you should have received your September 30th quarterly portfolio summaries, as well as our letter discussing the firm's view of the financial market situation. Events during this week, of course, have only heightened concerns about the outlook, adding to the general angst felt by all investors. Read More.