This was the title of the bill to repeal Glass Steagall (The repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks) in 1999. Anyone who was against repealing the Act, was by definition “old fashioned”. Now some 11 years later, we have dealt with the ramifications of the repeal of this act, but more importantly the question remains; are the acts of the Government and the Federal Reserve any more informed than previous mistakes? Is Ben Bernanke creating a new model of economic renovation that trumps the work of economists in the past?
2010 is the year that our policies started to clarify. The market has reacted positively to Government intervention, stimulus, and the Fed’s accommodative monetary stance. However, we are still in the middle of unwinding our excesses of years past, and have come to terms with high unemployment and slow, historically low growth rates. Ben Bernanke stands alone as the only economic alchemist who has prescribed more spending to solve the problem of our overspending.
The Government and The Federal Reserve have made it clear that 2011 will be another year artificially supported through monetary and fiscal policy. This is a short term positive, as already reflected in the performance of our markets in Q4 of this year. We expect this euphoria to continue through 2011 as the Fed will launch, in our opinion, a third round of Quantitative Easing in the latter part of the year. This will be used to further fuel our economic momentum leading up to the 2012 election.
For these reasons, 2011 and part of 2012 (or the next 18months) reflect a positive investing environment. In fact, the Federal Reserve has all but condemned those citizens who have not invested their cash to exceedingly low returns in the foreseeable future, creating a very real incentive for investment into equity markets or hard goods.
Currently our concern is not the next 18 months; the die has been cast as outlined above. However, the markets actions beyond this period are the focus of our attention. What will happen when the spending stops? What will happen when interest rates and inflation start to rise? Our concern is when to act proactively in the next 18 months to protect your assets and what investment or investment vehicles can be used to properly hedge against the future correction while still garnering a return today.
The actions of our Government and the Fed, in the present will more clearly outline our future results. As we progress through 2011, trends will become apparent and we will be able to adjust the portfolios accordingly. We continuously take a proactive approach to the markets macro trends without being reactionary to micro day to day changes. Certainly the next several years will provide a unique challenge to the United States and the world, which in turn will make the management of your assets in these times more important than anytime in our lifetime. We do not know if Ben Bernanke’s economic recovery recipe is the correct one, or if decisions made by our Government will lead to prosperity, but we can and will be ready to take action for either future result.
Thank you for your business and in your trust in our Group.
Scott Airey
Managing Member
The Financial Modernization Act – 12/14/2010
This was the title of the bill to repeal Glass Steagall (The repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks) in 1999. Anyone who was against repealing the Act, was by definition “old fashioned”. Now some 11 years later, we have dealt with the ramifications of the repeal of this act, but more importantly the question remains; are the acts of the Government and the Federal Reserve any more informed than previous mistakes? Is Ben Bernanke creating a new model of economic renovation that trumps the work of economists in the past?
2010 is the year that our policies started to clarify. The market has reacted positively to Government intervention, stimulus, and the Fed’s accommodative monetary stance. However, we are still in the middle of unwinding our excesses of years past, and have come to terms with high unemployment and slow, historically low growth rates. Ben Bernanke stands alone as the only economic alchemist who has prescribed more spending to solve the problem of our overspending.
The Government and The Federal Reserve have made it clear that 2011 will be another year artificially supported through monetary and fiscal policy. This is a short term positive, as already reflected in the performance of our markets in Q4 of this year. We expect this euphoria to continue through 2011 as the Fed will launch, in our opinion, a third round of Quantitative Easing in the latter part of the year. This will be used to further fuel our economic momentum leading up to the 2012 election.
For these reasons, 2011 and part of 2012 (or the next 18months) reflect a positive investing environment. In fact, the Federal Reserve has all but condemned those citizens who have not invested their cash to exceedingly low returns in the foreseeable future, creating a very real incentive for investment into equity markets or hard goods.
Currently our concern is not the next 18 months; the die has been cast as outlined above. However, the markets actions beyond this period are the focus of our attention. What will happen when the spending stops? What will happen when interest rates and inflation start to rise? Our concern is when to act proactively in the next 18 months to protect your assets and what investment or investment vehicles can be used to properly hedge against the future correction while still garnering a return today.
The actions of our Government and the Fed, in the present will more clearly outline our future results. As we progress through 2011, trends will become apparent and we will be able to adjust the portfolios accordingly. We continuously take a proactive approach to the markets macro trends without being reactionary to micro day to day changes. Certainly the next several years will provide a unique challenge to the United States and the world, which in turn will make the management of your assets in these times more important than anytime in our lifetime. We do not know if Ben Bernanke’s economic recovery recipe is the correct one, or if decisions made by our Government will lead to prosperity, but we can and will be ready to take action for either future result.
Thank you for your business and in your trust in our Group.
Scott Airey
Managing Member