James Wilson's Blog

New Blog and Website

noreply@blogger.com (James Wilson) — Thu, 15 Sep 2011 16:04:00 +0000

Our new website www.jewilson.com has been launched! We have integrated our blog to this site and all new postings will be there. We encourage you to subscribe to our blog as well.

You can access our blog here

The Organic Economy

noreply@blogger.com (James Wilson) — Thu, 15 Sep 2011 11:03:00 +0000

one of the best articles I have seen in months today in WSJ on "the two economies" in Obama's head. He contends that , to the President, the private economy is not the real one but is instead an intellectual abstraction. Lack of a core understanding of what an organic economy is and what makes it tick seems to be central to the policy choices. Very good read.

Greek Default? Really?

noreply@blogger.com (James Wilson) — Mon, 12 Sep 2011 18:27:00 +0000

Came across this piece written a few months back on Niall Ferguson's views on Greece. As he points out, over the past 200 years or so Greece has been in and out of default several times. This isn't a novel event. Yet most of the "explanations" today by the talking heads say fear of Greece defaulting (again) are to blame for the lackluster markets. Hmmm, really??

Large Scale Mortgage Refinancing Results

noreply@blogger.com (James Wilson) — Mon, 12 Sep 2011 14:09:00 +0000

Some good,thoughtful analysis by CBO on the outcomes of large mortgage re-financing programs. It does not surprise me in the least that the analysis concludes that the benefits (gains) of such schemes by a few, roughly equal the losses for the many . We have tried 5 major programs in less than 3 years and still the housing markets continues downward. Maybe it is time to let the market clear and find a bottom so we can move forward .

Tax Policy History

noreply@blogger.com (James Wilson) — Sun, 11 Sep 2011 14:21:00 +0000

A very interesting and brief piece on the history of soak the rich tax policies . As the author points out , most taxes start out reaching only a few then rapidly expand to reach most.

Classic John Bogle

noreply@blogger.com (James Wilson) — Sun, 11 Sep 2011 13:32:00 +0000

A truly outstanding article by Jason Zweig in WSJ on the equity markets,buy and hold, diversification and even gold. Bogle is without peer in his steadfastness. As he says diversification is not just the first thing investors should think about, but also the 2nd and 3rd and 4th thing.

Conjour

noreply@blogger.com (James Wilson) — Fri, 09 Sep 2011 15:36:00 +0000

An article in WSJ gets the award for great phrasing today. Writing about the jobs plan outlined last night by President Obama ,they use the words "the government conjurer". Basically this means the government is acting as a magician , creating something (jobs) out of thin air. Well done.

What Now? (Part Two)

noreply@blogger.com (James Wilson) — Fri, 09 Sep 2011 13:00:00 +0000

The next issue of our, bi -weekly newsletter, STAT is available. You can access it here. If you'd like to receive our email newsletter, you can click the "Sign up for our Email Newsletter" link on the right of this page.

Because it's Tuesday

noreply@blogger.com (James Wilson) — Fri, 09 Sep 2011 11:12:00 +0000

This brief article is a good example of what we call "Because it's Tuesday". That is, the explanation for short term price movements (noise) in the markets. In this piece, the writer says "investor anxiety" is the reason. Really? How do they know?

Job Creation

noreply@blogger.com (James Wilson) — Thu, 08 Sep 2011 11:42:00 +0000

This is an excellent article by Caroline Baum on the role of government in job creation. As she states "the job of government is to provide an environment in which the private sector creates this (jobs)". Well put.

Debt & Savings

noreply@blogger.com (James Wilson) — Wed, 07 Sep 2011 10:26:00 +0000

A very good summary of the debt issues facing those nearing retirement age. If anything, the percentages of folks in their 60's with substantial mortgage debt exceed those outlined in the article. 20 years ago almost none of our clients that age had mortgages, today it is the rule. As the article points out, this age group in general has too much debt and too little savings. Not much of a formula for an enjoyable retirement.

Hysteria and Hyperbole

noreply@blogger.com (James Wilson) — Tue, 06 Sep 2011 11:21:00 +0000

This is a good example of the near hysteria of journalists "reporting" on the markets. The writer makes some good points but sets them within the context of the markets coming off the worst August in a decade (a good deal of volatility in both directions) and entering historically the worst month of the year. Why does any of that really matter except we need the volatility in order to accrue the long term returns. The "what to do now" syndrome seems to dominate the media at present much to the detriment of most investors.

Infrastructure Spending and Priorities

noreply@blogger.com (James Wilson) — Mon, 05 Sep 2011 14:59:00 +0000

An interesting 2008 chart from NYT on infrastructure spending. Looks like $ is not the problem, politics is (big surprise). Economics centers around choices. When we make poor choices, resources are allocated improperly to one area to the detriment of another area.

Of Men and Markets

noreply@blogger.com (James Wilson) — Mon, 05 Sep 2011 11:58:00 +0000

Professor Shiller provides an interesting perspective in this article. As he notes, despite the evidence to the contrary, many investors practice the "beauty contest" approach.

Bond and Gold Bubbles

noreply@blogger.com (James Wilson) — Wed, 31 Aug 2011 12:21:00 +0000

David Malpass writes in WSJ today about the broad bond and gold bubbles. Think about this, Treasuries had the best month (of price gains-meaning yields falling) in over 3 years in the very month U.S. debt was downgraded. As Malpass points out, both gold and bonds have a "fear factor" component and this may account for a large portion of the current price movement.

An Unusual Economy?

noreply@blogger.com (James Wilson) — Tue, 30 Aug 2011 11:40:00 +0000

Professor Sowell dispenses some wisdom on the economy and uncertainty. He quite correctly notes that the unknown costs of Obamacare are already sending chilling signals to businesses otherwise ready to hire.

State Finances

noreply@blogger.com (James Wilson) — Mon, 29 Aug 2011 13:52:00 +0000

Barron's has a great cover article with a useful chart comparing the AAA and AA+ state finances. S.C. has the 5th highest Federal spending as a % of GDP at 24.9%. The range is 10.6% (Delaware) to 29.8% (Virginia). S.C. also is in the top handful in Medicaid spending as a % of outlays with 22%. The range here is even wider with Wyoming @ 7% and N.C. with 37%!

The Coming Fannie/Freddie Boondoggle

noreply@blogger.com (James Wilson) — Mon, 29 Aug 2011 13:29:00 +0000

A brief, concise summary of a really bad idea . Maybe it won't actually happen but several trial balloons were sent last week so it looks likely. More intervention won't help housing finance.

Unintended Consequences (again)

noreply@blogger.com (James Wilson) — Mon, 29 Aug 2011 12:21:00 +0000

Ezra Klein has an insightful piece about state Medicare cost containment . Just because we think bidding contracts saves money does not make it so.

A Formula for Growth

noreply@blogger.com (James Wilson) — Mon, 29 Aug 2011 11:05:00 +0000

A sensible article on how to (partially) grow our way out of the fiscal mess in the U.S. Will take an about face in direction but he makes a plausible case. Good reading.

The Rescue that Missed Main Street

noreply@blogger.com (James Wilson) — Sun, 28 Aug 2011 13:09:00 +0000

Gretchen Morgenson has a very good article in NYT today on the some of the slimy details of the 2008 crisis-era bailouts. The title aptly describes what follows per the new disclosures made public just last week. Late in the article she quotes Professor Edward Kane who says "bailing out firms indiscriminately hampered rather than promoted the economic recovery". That about sums it up.

The Broken Window Fallacy

noreply@blogger.com (James Wilson) — Sat, 27 Aug 2011 11:40:00 +0000

Professor Art Carden has a great article simply explaining the Broken Window Fallacy . We will likely hear many who adhere to this fallacy spout their inaccurate conclusions in the days ahead as we enter the post Hurricane Irene period. 19th century philosopher/economics writer Frederic Bastiat wrote of this and the unintended consequences that follow this line of thinking.

The Power of Perspective

noreply@blogger.com (James Wilson) — Fri, 26 Aug 2011 13:00:00 +0000

The next issue of our, bi -weekly newsletter, STAT is available. You can access it here If you'd like to receive our email newsletter, you can click the "Sign up for our Email Newsletter" link on the right of this page.

Higher Inflation the Answer?

noreply@blogger.com (James Wilson) — Thu, 25 Aug 2011 11:16:00 +0000

A good straightforward articleon why inflation won't cure our present problems. As he states, lack of confidence and uncertainty about government policies are the primary culprit.

Big Banks Undercapitalized?

noreply@blogger.com (James Wilson) — Wed, 24 Aug 2011 20:03:00 +0000

So says seasoned observer Barry Ritholtz in this piece. He may well be right. The point he makes toward the end is particularly good. Banks may skate by for now but are they strong enough for the next downturn?