Investment Help

If you are seeking investment help, look at the video here on my services. If you are seeking a different approach to managing your assets, you have landed at the right spot. I am a fee-only advisor registered in the State of Maryland, charge less than half the going rate for investment management, and seek to teach individuals how to manage their own assets using low-cost indexed exchange traded funds. Please call or email me if interested in further details. My website is at If you are new to investing, take a look at the "DIY Investor Newbie" posts here by typing "newbie" in the search box above to the left. These take you through the basics of what you need to know in getting started on doing your own investing.

Wednesday, August 10, 2011

CNBC and the Fed Meeting

I've got two questions:  First, do the commentators on CNBC have any idea how clownish they look?  Yesterday, as the market rose, then plummeted on the Fed announcement and finally ended up sharply, the commentators, guests, as well as the regular reporters, had great after-the-fact explanations at each stage-as they do at the end of each day. They parade on - one right after the other - first explaining that the Fed didn't tell markets what they wanted to hear as prices went down and then oops! prices are rising; so guests and reporters reparsed the Fed statement and found that  the Fed said exactly what the market  wanted to hear.

Secondly, do the reporters realize how ridiculous they look in practically begging Bernanke to take actions to push stock prices higher?  The incessant pleading in the hope that he will announce that rates will stay low for a protracted period, that he will announce QE 3, that he will change the maturity distribution of the Fed's Treasury portfolio, that the committee will lower the rate on excess reserves, etc. repeated over and over is akin to beggars on the streets of London asking for crumbs from the passersby.  Sadly, this has turned into the step child of the deficit crisis.

Since 1994, when Greenspan actually surprised Wall Street with a rate increase, the likes of Goldman Sachs, Bank of America, and the late Lehman Brothers have fattened themselves on the free ride given by the Fed in announcing its policy and spelling out its intentions.  By announcing its policy and now actually holding periodic press conferences, in case CNBC et. al, are too stupid to understand it, they have enabled the Street to exploit carry trades in which they sweep in essentially risk-free profits by borrowing practically free money and lending further out the yield curve at higher rates.  The bottom line, sadly, is that  the Federal Reserve by its actions (in the guise of transparency)  has become totally impotent - a lackey for the banking system.  Short-term rates have been close to zero and two massive attempts at monetizing the debt (let's call it what it really is), and still we are scratching our heads and wondering if we're facing a "double dip."

As for CNBC - at least it's great entertainment.


  1. Aren't the commentators on CNBC paid to look clownish? I could swear I read somewhere they have clownish incentives written into their contracts. Since the networks have started canceling soap operas, CNBC has done a nice job filling the void. As for the Fed, their mission in life does seem to be to help the bankers make as much money as possible.

  2. Hmmm...Clowns you say? For a minute I thought you were talking about Cramer! :)