Global Bailouts Will Lead to Global Inflation: How to Play It Written By: David Neubert 2008-10-16 14:59:43 Photo: tao_zhyn, Creative Commons, Flickr
All the money used by central banks around the world to rescue the financial system is causing an increase in government liabilities.
Three factors will keep the cash register ringing for investment banks: 1. Demographics of baby-boomers saving for retirement. 2. The cheaper dollar, meaning that foreign firms will be on a shopping spree for U.S. companies, which will help M&A advisory. 3. Mortgage portfolios that have been marked to market. When liquidity retuns to this market, portfolios of mortgages will start to show profits.
It would seem that Wall Street also hasn't forgotten that it is the second most regulated industry in the U.S. (after nucular energy) and that it needs to keep track of where its bread is buttered. Banks are betting that the butter will be spread by a Democrat in 2009.
On the next pullback, which I think is coming once all the shorts are done covering, I'll be looking to buy the investment banks cheap again. Look out for U.S. firms like Goldman Sachs (GS - $179.63), Lehman (LEH - $48.65), Morgan Stanley (MS - $49.67) and Merill Lynch (MER - $46.71) to continue to do well. I own the investment banks directly, but rather than pick individuals, the Exchange traded fund (IAI - $39.43) works well as a proxy.
Is it Time to Make Money at the Expense of the "War Profiteers"? Written By: Thomas Chenoweth 2007-11-15 18:05:33
As the calls for ending the war become louder, I can't help but think what the consequences could be for some of America's largest defense contractors. As much as I don't want to see any potential cutbacks in defense spending put our troops at a disadvantage, it seems abundantly clear that some big cutbacks are on the horizon and that the indexes that track this sector are sure to go lower.
Is the Sky Falling? (Continued) Written By: Mark Bershatsky 2008-03-27 11:14:40 In a previous post, I had mentioned how our current financial crisis has rippled across other sectors of the U.S. economy and overseas, sending noticeable shock waves across global financial markets. The critics and "doom and gloomers" are all lined up and waiting to unleash a heavy dose of "I told you so" to investors that will supposedly get burned if they don't allocate their money properly, however I think much of this pessimism is overhyped.
