Cullen Roche: Pragmatic Capitalism

Share the post "A Useful Wall Street Dictionary" I just finished reading Jason Zweig’s new book “The Devil’s Financial Dictionary” and boy is it good.  If you’ve ever been overwhelmed by all the jargon used in finance and economics then this is right up your alley.  Jason offers up a witty, brilliant and most importantly, useful collection of honest definitions.  It’s a collection of all the things most people think about these words, but are too afraid to actually say.  For instance:...

Share the post "Investment Activity & the Illusion of Control in Exchange for Low Real Returns" I take a cyclical view on things.  This means I can sometimes go years without making big changes in my views or portfolio.  This is a very intentional construct and I think it’s one that most people should adhere to.  After all, you don’t want to be irrationally long-term which usually results in huge amounts of short-term permanent loss risk.  But you also don’t want to be so short-term...

Share the post "Why No One Should Support the Gold Standard" The gold standard is silly.  No one should be in favor of going back to it.  Here’s why: The Gold standard does not create “Sound Money” policy. One of the biggest myths about the Gold Standard is that it will create “sound money” policies that won’t allow the government to debase the currency.  History shows this is totally wrong.  A gold standard does not restrict the government from devaluing the currency.  Over the course of...

Share the post "Rand Paul Has No Idea How the Fed Works" Sorry for the blunt title, but I couldn’t think of anything more appropriate…. I was watching the Republican debate this evening when Rand Paul made the following comments on the Federal Reserve in response to rising income inequality: “By artificially keeping interest rates below the market rate average ordinary citizens have a tough time earning interest and a tough time making money.  They’re actually talking now about negative...

Share the post "How Will the Fed Raise Rates?" A Federal Reserve rate hike is very likely to occur before the end of the year or in Q1.  But many are still unclear about how the Federal Reserve will raise rates.  After all, we’re in a new monetary environment in the post-crisis period thanks to the size of the Fed’s balance sheet.  I’ll try to touch briefly on this to clarify some concerns. In the pre-crisis period the Fed set a target rate for the overnight interest rate and altered the...

Share the post "Economic Bellweather CSX on the State of the Global Economy" I’m a big fan of following macro rail trends around the world so I am fortunate to be in touch on occasion with Executives at CSX, one of the world’s largest rail firms.  I reached out to Frank Lonegro, CFO at CSX to ask him about his opinion on the US and global economy.  He was kind enough to let me publish his thoughts:    1)      How does CSX see current trends in the US rail industry and are these trends...

Share the post "Why Do We Study Macro Finance and Econ?" The study of macro is about big things.  Really big things.  I can only speak from personal experience, but I don’t spend most of my time thinking about money, investing and economics (for fear of death by boredom, I hope you are the same).  I spend most of my time thinking about really big things.  Why are we here?  What is our purpose?  What is the meaning of this existence?  These are big questions which require big answers.  And...

Share the post "Three Multi-Temporal Problems within Capitalism’s Victory" The biggest threat to capitalism is capitalists.  After all, capitalists are monopolists.  And monopolists are antithetical to broader prosperity because they give the monopolist an unfair pricing power over their consumers which often leads to social unrest. We need look no further than the recent case of Martin Shkreli to see how this plays out in real-life. Anyhow, I was reading through this very good report from...

Share the post "Valeant and the Gambler’s Dilemma" If you’ve been paying attention to the financial media in the last few weeks you’ve probably seen the drama surrounding a company named Valeant.  In case you’ve been buried in your bunker waiting for China to blow up the global economy, here’s the short version – Valeant is a pharmaceutical company that has basically acquired its way to massive growth by gobbling up smaller firms, raising prices and restructuring.  They’ve become a...

Share the post "A Good Employment Report, but With Risks" Today’s Non-Farm Payrolls report was an overwhelming positive for the US economy.  Total payrolls were up 271K with 268K coming from the private sector. There was considerable strength in professional and business services which is consistent with the recent strength we’ve seen in PMI Services data. The unemployment rate was down to 5% and revisions in past months did not play a significant factor.  So, all in all, a pretty good...