And That’s The Week That Was: 1.18.08

January 21, 2008 | 1 Comment

Attached/linked please find And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended January 18, 2008.  With virtually all investors calling for some pretty dismal earnings numbers from Citigroup and Merrill, the results were even worse than expected.  Enter more foreign governments with a continuation of the international “bailout”…talk about globalization at its finest/worst.  (Is anyone else concerned about this?)   Earnings season has lived up to its most pessimistic predictions; financials led the negativity, though some consumer-driven companies suffered last quarter as well.  For now, there seems to be no reprieve in sight including Bush’s quickly conceived economic stimulus plan that many believe to be “too little, too late.”  News from the housing, retail, and inflation fronts brought even more sentiments of “gloom and doom.”  Oil prices declined (at least, that’s a positive), gold rose (the ultimate hedge), and the Fed looks to be on target for a 50 bps cut in the weeks to come.  Equities tumbled early in the week and never looked back.  Both the tech-heavy NASDAQ and the small-cap Russell 2000 have fallen over 10% thus far this year and the other indexes aren’t far behind.  Perhaps investors will get this intense negativity out of their system all at once and then move on to better things?  (Wishful thinking…) 

Coming up in the week ahead:  Existing Home Sales (Thursday)

And That’s The Week That Was: 12.21.07

December 21, 2007 | Leave a Comment

Attached/linked please find And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended December 21, 2007.  Is anyone out there?  Do folks work after market close on the day before Christmas Eve?  What if today was the start of the “Santa Claus rally” and nobody was around to notice?  These days, best practices among financial services companies seem to mean selling stakes to foreign state-owned funds.  Add Morgan Stanley and Merrill Lynch to that growing list.  (The motto, “Singapore’s Temasek Holdings Pte. Ltd. is bullish on America” has a nice ring to it.)   With investors sick of the ongoing mortgage negativity, many turned their attention to techs which may represent the last bastion of market strength (thanks Oracle).  Meanwhile, the Fed conducted two “impromptu” auctions that garnered some decent bank participation, and a few once proud and respected governmental officials threw in their “expert” analyses on the never-ending credit crisis.  Three days and counting until the holiday shopping season officially ends and analysts still have no clues about its overall success.  Here’s to hoping it’s a happy one for you and your families. 

Coming up in the week ahead:  Durable Goods (Thursday), Consumer Confidence (Thursday), Existing & New Home Sales (Friday)

And That’s The Week That Was: 11.2.07

November 5, 2007 | Leave a Comment

Attached/linked please find And That’s The Week That Was…the Brounes & Associates market/economic commentary for the week ended November 2, 2007.  Though Merrill’s Stanley O’Neal updated his résumé’ this week (any pointers, ex-Bear Stearns exec Warren Spector?), the unemployment and non-farm payroll releases showed that generally employees are weathering the subprime storm quite nicely (thus far).  In fact, a quick glance at the week’s news would seem to depict that things in the economy are buzzing along just fine.  GDP is growing; labor remains steady; and, as expected, the Fed cut rates by another 25 bps.  So, why are the markets (sans techs) plunging?  Well, apparently the worst is yet to come and the mortgage woes are nowhere close to ending.  And, apparently inflation will soon be rearing its ugly head and oil prices are nowhere close to capping out.  And, apparently the Fed’s job is done for now and they can go back to the speaking tour with “all talk and no action.”  And, apparently equity valuations are still too high and financial services companies will guide the overall markets more directly than techs.  And apparently, the clout of the bears exceeds that of the bulls these days (though, apparently, sentiment is changing by the week, day, hour, minute, second).

Coming up in the week ahead:  ISM – Services (Monday), Balance of Trade (Friday)
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Can Hedge Fund Talent and Skill be Mass Produced?

April 17, 2007 | Leave a Comment

One of the aspects of the hedge fund industry that has always intrigued me is how true talent and skill can rise to the top. When I saw this story appear on The Red Herring recently, I had to ask myself — can a parallel be drawn that might help illustrate the complexity in achieving this?

Goldman Sachs, Merrill Lynch, and J.P. Morgan have rolled out tools to replicate, or clone, hedge-fund-style performance without the standard fees, which typically amount to 2 percent of assets and 20 percent of any gains. Industry players say mainstream mutual funds or exchange-traded funds based on exotic hedge fund strategies could be launched within a year.

IndexIQ, based in Rye Brook, New York, which opened its doors in June and raised $5 million in an A round from angels and financial-industry backers, is joining the effort to create synthetic hedge funds by building and licensing indexes that track hedge fund strategies. One such strategy could be betting on global “macro” trends.

My first reaction is to wonder if this is similar to George-Pierre Seurat’s attempt to quantify human emotion through a new language of art and a scientific method to painting. This announcement by Merrill, Goldman, etc sounds similar to me. However, maybe I’m reaching? This weekend I went to see the current exhibit at the Museum of Fine Arts, Houston, The Masterpieces of French Painting from the Metropolitan Museum of Art: 1800 - 1920 so I had painting on my mind.

Can talent/skill be bottled and marketed?

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