WSJ: Barton Biggs: ‘Charming Man of Deep Intellect’

By Simon Constable

Sad news. Famed hedge fund investor Barton Biggs died over the weekend after a distinguished financial career.

It was particularly meaningful to me as I’d had the opportunity to meet or speak with him a number of times over the years both here at WSJ and at my previous employer, TheStreet TV. Most recently I spoke with him about his father and last year he invited me to his home in Greenwich Connecticut where we taped The Big Interview. There were other occasions also.

While some people found him to be somewhat crabby, I found a charming man of deep intellect. There are many people who throw back sound bites during interviews. Not so with Biggs. He pondered each question, thought it through and called on his many years of experience.

He was also modest. Once he proclaimed that he wasn’t very good at timing his investments. That’s something small investors might want to consider. If even a veteran of markets and investing found it tricky to jump in or out of a stock, what chance do the rest of us stand?

He will be missed. See original post here.

WSJ: What Are Covered Bonds

By SIMON CONSTABLE

Is there a path to higher yield and lower risk in the bond market? Apparently there is, if you believe the promises of so-called covered bonds.

These are a type of mortgage security, issued mainly by financial institutions in Europe, that offers fixed-income investors a double layer of protection against default.

Covered bonds differ from typical mortgage-backed securities in the U.S. in that the issuing bank retains ownership of the underlying mortgages. "The fact that it's on [the] balance sheet means that the issuer has skin in the game," says Kristion Mierau, a portfolio manager and covered-bond expert at Pacific Investment Management Co., or Pimco. See original post here.

Barrons: Why Commodities Are Set to Tank

By SIMON CONSTABLE

Investors in commodities need to watch out.

Fresh data show the U.S. economy is weakening. The economy added a paltry 80,000 jobs in June, not enough to keep up with population growth. Earlier last week, we learned the manufacturing sector contracted in June for the first time since July 2009. Other indicators have been equally uninspiring. 

Why does this matter to commodities? The raw-materials sector tends to get hit harder than the rest of the economy in a recession. See original post here.

WSJ: Anna Schwartz, Mother of Monetarism, Was Intellectual Giant

By SIMON CONSTABLE

If it’s rare to find one’s self in the presence of greatness, it’s even rarer to know it at the time.

Yet, the one and only time I met the late economist, and so-called mother of monetarism, Anna Schwartz, I knew she was awesome. She died Thursday aged 96.

How did I meet her?

At the height of the recent financial crisis on March 30 2009 she was part of a panel discussion on the Great Depression that I moderated at the Council on Foreign Relations here in New York City. Watch video from the event below.



The others on the panel all showed their smarts, but intellectually she dwarfed us all. That’s not meant to take anything away from anyone else, but rather to point out that even on a panel of distinguished intellectuals she stood out.

In that 60 minute-long discussion three years ago it was all I could do to keep up with Schwartz. Afterwards my mind was fried.

Although it’s an unfashionable view in some quarters now, she made it clear she hated Keynesianism: the idea that government spending could stimulate growth. She also hated the bailouts. Policymakers might want to take note of those things.

Schwartz, along with Milton Friedman, invented monetarism: the idea that monetary policy can stimulate economic growth. If he was its father, she was its mother.

Friedman got more credit for inventing monetarism that than she did, but likely that is a function of a time when women got less recognition than men, even for the same achievements.

The two authored the 1963 tome A Monetary History of the United States, 1867-1960.

See original post here.

WSJ: What Yogi Berra can Teach the Winner of Presidential Race

By SIMON CONSTABLE

Yogi Berra had it right when he said: “If you come to a fork in the road, take it.”

Whoever will be U.S. president next year needs to do just that, and make a decision on which way to go. That will go a good way to help the ailing jobs market.

You see the problem with the economy, the most pressing problem of our time, is at least in part due to lack of decisiveness from government itself. That’s according to 2011 research from Stanford University economists Nicholas Bloom and Scott Baker and the University of Chicago Booth School of Business‘s Steve Davis. They point out that uncertainty over which of many strategies the government will pursue is actually making things worse.

They call this “policy uncertainty” and according to the trio, it’s up more three-fold since 2000.

See original post here.

WSJ: What I Learned from Dad About Money

By SIMON CONSTABLE

Listen up. It's Father's Day, and, believe it or not, the old man still knows his way around the block. He still has a few lessons worth learning.

So The Wall Street Journal Sunday asked some really, really smart people in the business and financial world what they learned at home.

The question: What did you learn from Dad about money and finance?

The answers (in a nutshell): Work hard, save your money and diversify your investments.

And what dad would disagree?  Read more here.

Photo by Tim Mossholder on Unsplash

Barron's: Its Back to the '60s As Central Banks Embrace Gold

By SIMON CONSTABLE

Big changes are afoot in the gold market. The short take: The new environment will favor long-term investors who buy and hold for years over speculators who try to trade day-to-day gyrations.

For one thing, central bankers are back buying gold. Think it's no big deal? The last time we saw the so-called official sector as such a consistent and major buyer was in 1965. See original post here.

Photo by Zlaťáky.cz on Unsplash