Financial Sense Blog

Standing Up When It's Too Late

There is a letter by Marcus Tullius Cicero, dated 18 December 50 B.C. This letter was written to his friend Atticus on the eve of the Roman Civil War. He wrote as follows: "The political situation alarms me deeply, and so far I have found scarcely anybody who is not for giving Caesar what he demands rather than fighting it out."

The Recovery Was An Illusion

And That Was A Good Thing!

By Sy Harding

So let’s not talk of double-dips. Let’s face the reality that the real economy’s first dip is still underway, and that's not a bad thing - much better than a double-dip!

The Perils of Unmitigated Positive Thinking

Private citizen, Alan Greenspan, could afford to be blunt. “Our choices right now,” he said in early August 2010, “are not between good and better; they’re between bad and worse. The problem we now face is the most extraordinary financial crisis that I have ever seen or read about.”

Black Swans Need Not Apply

I was pounding pavement instead of kicking rocks recently, on Wall Street of all places. There were Suits hanging around outside the familiar iconic buildings, despondently smoking cigarettes. In my surely biased opinion, the feel of the place was distinctly less energetic than usual.

Efficient Market Hypothesis: R.I.P.

Of all the belief systems of Wall Street, few can claim the devoted following of the Efficient Market Hypothesis, the idea that stock prices adhere to the same laws of supply-and-demand that govern retail products. Once coined the theoretical "Parthenon" of economics, this notion has consistently endured the test of time until now. Academics and advisors across the globe are currently exposing crack after crack in the "Efficient" model so deep as to bring the entire theory crashing to the ground.

Happy Birthday Social Security?

In his weekly radio address this past Saturday, President Obama happily commemorated the 75th anniversary of Social Security. From my perspective, the milestone is nothing to celebrate. For although the president spoke earnestly about the "obligation to keep the promise" of Social Security, in reality, the program will wreck the government's finances within 10 years.

Through Rose Colored Glasses

Benchmarking. It is how everything is compared, from grades in school to your local money manager. But in an interesting twist, benchmarking can also put rose colored glasses on an otherwise poor situation. Let’s look at benchmarking in general and how it can color views on the world.

Surmounting the Coming Mega-Crises

By Deepcaster

Crises beget Opportunities. Thus Deepcaster outlines the Main Financial Ongoing and Prospective Crises, and Opportunities.

Excess Information Slows Learning Curve

This week Mr. Treece discusses the increasing likelihood of a coming wave of inflation, the markets recent response to a better business climate, and investors' affinity for bonds. Finally, Mr. Treece cites an over-abundance of information as one cause for investor confusion.

The Perils of Complacency

Two examples of the herd mentality

Last February, we presented the Crash of 1987 chart. Specifically, we compared our current market to that of the October peak. Even with the Flash Crash in May, the market is still acting like it wants to crash. While bear markets can be extremely volatile, we continue to expect a Second Flash Crash.

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