Federal Reserve

Warren Buffett writes an annual letter to the shareholders of Berkshire Hathaway each year.  If you've never read them, you really ought to.  They are priceless gems.  Not a laugh a minute, but an interesting observation on what's happening. (…)

What is left in the governments bag of tricks to get the banks back on track?  One topic that I wrote about — 5 months ago — has popped up this past week with more and more frequency.  We are finally starting to hear more and more chatter about relaxing "Mark to the market" regulations. (…)

Economic recessions and economic depressions

Since 1854, the United States has been through 32 economic cycles, one cycle lasting (average) nearly 5 years.  That's not the length of a recession, that's an entire economic cycle.  This includes some recessions/depressions in the 1800's that lasted 3 years, another for 6 years and a long depression that lasted from 1873 through 1896, a period of 23 years. (…)

How can so many people be so wrong for so long?
It wasn't all that long ago where we had gas lines, a prime rate that reached 20%, unemployment reaching 12%, and inflation at 13%. (…)

The Treasury announced they will begin to inject capital (money) into banks, under terms created under the bailout bill.  This article will try to walk through, in English, what this all means. (…)

Quick history lesson: Mark-to-the-Market was a practice originally begun by futures and commodity traders in the 19th century.  Essentially, mark-to-the-market means your holdings must be "priced" every night…at the price they can be sold at. (…)

"Mr. Valentine has set the price!"
Or, in this case Mr. Bernanke sets the price. (…)

Bank Failures in Nevada and California
The headlines this past weekend showed that US regulators took over two banks Friday afternoon and sold them both to Mutual of Omaha bank. (…)

Have you seen the Bruce Willis movie, "Die Hard"?
When the police officer starts to drive away, Willis sends him a message…throwing one of the bad guys on the hood of the car. (…)

There was an article distributed nationwide, written by the Associated Press, and carried locally in the Asbury Park Press on March 22, 2008. (…)

All these firms hold the same investments.
There is STILL considerable risk in the group.
Why did this happen to just Bear Stearns? (…)

UPDATE: Sunday evening, 03/16/2008: Bear Stearns to be acquired by JPMorgan Chase for $2.00 in stock swap deal.
That is NOT a typo!
The stock closed at $30 on Friday. On Thursday, it was $57.00. (…)

The news surrounding Bear Stearns on Friday morning was not good! There are several important elements to this story. (…)

Most Wall Street recommendations to buy are based on projected future revenues and/or projected future earnings. Projected. Or you could say, "predicted". (…)

The two big questions around my house these days are:
1. What kind of Halloween candy will we be giving out this year?
2. When EXACTLY do we change the clocks again? (…)

The big reason why the market fell apart this summer was because the financial stocks — the brokerage firms in particular — really struggled. (…)

Market bottom? Probably not. But the Federal Reserve is awake.
The Fed stepped in a week ago, and injected liquidity in the financial system. (…)

On Friday, the Federal Reserve cut the discount rate by a 1/2 pt.
They cut the discount rate — NOT the Fed Funds rate. (…)