August 16, 2011 - Vol 5 Issue 33
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Gundlach - 'The Cusp of a Global Banking Panic'
By Robert Huebscher
Don't interpret last week's volatility as merely a reaction to S&P's downgrade of US Treasury debt, according to Doubleline founder and chief investment officer Jeffrey Gundlach. Investors are actually fearful of a global banking crisis, he said, because many countries face a perilous choice - defaulting on their sovereign debt or inflating their way out of trouble.
Webinar: Maintaining Trust in a Post-Madoff World
Sponsored Content by ByAllAccounts
The arrest of Bernard L. Madoff was a cataclysm for his trusting investors and a scorching indictment of his regulators. But what does this epic crime teach the financial advisor community about managing money-and maintaining trust? Diana B. Henriques, the first journalist to interview Madoff in prison, and the author of the bestseller "The Wizard of Lies: Bernie Madoff and the Death of Trust," will provide the answers in this riveting one-hour webinar.
Matt Ridley Makes a Case for Optimism
By Laurence B. Siegel
Matt Ridley's new book, The Rational Optimist, uses powerful examples from history and compelling logic drawn from economic theory to remind us that human achievement is cumulative, and the future looks bright, particularly for the less fortunate in the world. It is especially welcome at this discouraging moment in time.
A Commentary on the Correction
By Michael Nairne
Market corrections are always painful and this one particularly so because of the lingering anxiety from memories of the 2008-2009 market crash. I explore the history of stock market corrections and examines the dynamics of the recent downturn as well as actions that may be warranted, depending on individual circumstances.
Tapping into 'The Power of Three'
By Dan Richards
One area on which there's a growing body of evidence is the optimum number of examples to use and alternatives to provide when talking to an existing or prospective client. You want to provide enough examples to communicate that you've done your homework without having people feel overwhelmed.
How Doing a Perfect Job Can Drive Clients Away
By Justin Locke
Nobody is perfect, and having a plan to deal with your imperfections is just as important as improving your performance. That lesson has been deftly illustrated by my local grocer.
Letter to the Editor
A reader responds to Paul Kasriel's commentary, Washington Had a Spending Problem, which was published on July 26.
Our Most Read Article from Last Week
In this letter designed to be sent to clients, Bob Veres explains the impact of S&P's downgrade of the US sovereign debt rating.
Highlights from Market Commentaries
Below are the three most widely read commentaries during the last week:
Everyone Forgot the Basic Laws of Economic
The consensus over the past month of so was that Washington would come to a last minute debt limit resolution and the equity markets would rally once the cloud of uncertainty regarding the US's finances was removed. Washington did come to its last minute resolution, but the markets have sold off. What happened?
Tags: Equities Bullish Treasury Bonds US Sovereign Debt
Everyone Forgot the Basic Laws of Economic by Richard Bernstein of Richard Bernstein Advisors
Danger: Children at Play
I am not an expert in euro ﬁnance by a wide margin. But I know one thing. Forget the debt for a second: the current uncompetitiveness of Greece, Ireland, Portugal, Spain, and Italy did not occur quickly. It took 10 long and obvious years. They had to work at it. The cure was always going to cause a lot of pain and threaten the well-being of the euro. So why didnt the bosses attempt to ﬁ x it early on when it would have been so much easier? Today these problems have become much tougher, but still the decisions are only half made and the cans get kicked and kicked again.
Tags: US Europe Japan Fiscal Policy Sovereign Debt
Danger: Children at Play by Jeremy Grantham of GMO
Recession Warning, and the Proper Policy Response
As of Friday the S&P 500 was below its level of November 2010, when the Fed initiated its second round of quantitative easing. Aside from a brief bump in demand that kicked the recession can down the road a bit, the U.S. economy is not much better off. Meanwhile, countless individuals in developing countries have been injured by predictable commodity hoarding and global price instability. The Fed has leveraged its balance sheet by over 55-to-1. As policy makers look to address the abrupt deterioration in U.S. , we should ask ourselves: Do we really long for more of the Fed's recklessness?
Tags: US Sovereign Debt
Recession Warning, and the Proper Policy Response by John Hussman of Hussman Funds