Roseman's Eruptions
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Austria's Darkest Hour
Since 1996 I've visited Vienna about 25-30 times or roughly three times per year. Vienna is home to my largest private banking relationship for asset management and remains a flagship domicile for my clients worldwide. About 40% of the assets I manage for investors is based in Austria all through a Swiss-owned private bank operating in Vienna.
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The View from Norway: An Oil Titan Rich with Surpluses
Norway is oil-rich and is home to one of the strongest currencies in the world this decade. It’s also an incredible country gifted by warm people and a strong work ethic.
Prior to my arrival last Sunday, I had last visited Norway back in 1997. That trip was short – barely three hours following a quick stop from Copenhagen via an overnight cruise.
But my arrival in Oslo on Sunday was certainly memorable…
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Cost of Global Borrowing Tops $12 Trillion in 2009
According to the OECD or the Organization for Economic Co-operation and Development, the cost of borrowing requirements in 2009 will approximate $12 trillion dollars – the most since the 1930s in inflation-adjusted terms.
The United States will require about $1.8 trillion dollars or 15% of this total as the cost of financing massive bail-outs and fiscal spending plans sends its budget deficit into record territory through at least 2012.
In 2007, total OECD borrowing topped $9 trillion dollars and is projected to have risen to $10.6 trillion dollars in 2009.
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The Bad News Rails
The best performing segment of the Dow Jones Transportation Average over the last several years belongs to the rails. Companies like Union Pacific and CSX enjoyed healthy margins as U.S. railroad freight traffic boomed from coast to coast.
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Asian Stock Dividend Growth Rate Surpasses S&P 500 Index
Historically, Asian stocks have ranked among the lowest-paying dividend issues in the world. But since last year that trend has changed as once low-yielding markets in the region now provide higher payouts than the S&P 500 Index and in some cases, many European equity markets.
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Non-Treasury Bonds Beat Stocks in 2009 as Spreads Narrow
After suffering their worst year in decades in 2008, the entire gamut of speculative and investment grade bonds have posted big gains since the March 9 intermittent bear market low.
Credit spreads or the yield differential between benchmark U.S. ten-year Treasury bonds and speculative debt has crashed over the last eight weeks as risk returns to the fixed-income market. Spreads for investment grade bonds have also narrowed sharply – led mainly by a huge compression in bank-issued bonds.
Credit spreads or the yield differential between benchmark U.S. ten-year Treasury bonds and speculative debt has crashed over the last eight weeks as risk returns to the fixed-income market. Spreads for investment grade bonds have also narrowed sharply – led mainly by a huge compression in bank-issued bonds.
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Dow Transports and Copper Fail to Confirm Rally
Stocks are now at the cusp of another reality check this week following dismal economic news in the United States, Europe and China. The primary trend now looks bearish as stocks probably terminate the fifth bear market rally since October 2007.
Risk aversion is returning in mid-May as the dollar, yen, gold and Treasury bonds post gains over the last 48 hours – the same leading players that dominated 2008 profits in an otherwise horrendous year for investors.
Risk aversion is returning in mid-May as the dollar, yen, gold and Treasury bonds post gains over the last 48 hours – the same leading players that dominated 2008 profits in an otherwise horrendous year for investors.
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Modest Dividends Portend to Longer Stock Market Recovery
The lack of dividends today will probably delay a full recovery for the stock market.
Historically, dividends are responsible for about half of the stock markets’ total return equation. But in the go-go days of the 1990s, dividends became insignificant as investors lunged after technology and other growth stocks; CEOs ploughed cash back into buybacks at the expense of dividend hikes for the most part. And as the market skyrocketed that decade the dividend yield as a percentage of the markets’ total return shrank.
Historically, dividends are responsible for about half of the stock markets’ total return equation. But in the go-go days of the 1990s, dividends became insignificant as investors lunged after technology and other growth stocks; CEOs ploughed cash back into buybacks at the expense of dividend hikes for the most part. And as the market skyrocketed that decade the dividend yield as a percentage of the markets’ total return shrank.
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Odds of Sovereign Default Remains High in 2009-2010
The worst of the global financial crisis has passed. But the next leg of this severe recession has yet to cripple the weakest balance sheets among sovereign nations.
Before 2010 is over, possibly sooner, some countries in the Baltics, Balkans, Eastern Europe and Central America will join the list of battered credits that have reneged or defaulted on their foreign debt obligations. It’s hard, if not impossible, to imagine that we won’t witness a major sovereign government debt default in the course of this economic cycle.
Before 2010 is over, possibly sooner, some countries in the Baltics, Balkans, Eastern Europe and Central America will join the list of battered credits that have reneged or defaulted on their foreign debt obligations. It’s hard, if not impossible, to imagine that we won’t witness a major sovereign government debt default in the course of this economic cycle.
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Commodity Currencies Overbought Since March
Some of the biggest trend reversals in global markets since March have occurred in foreign exchange markets. As risk reversion has returned with a vengeance over the last several weeks many commodity currencies have lit a fire against the American dollar.
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