Cullen Roche: Pragmatic Capitalism

Share the post "The Best Time to be Living is Only a Few Seconds Away" As I get older I find myself sometimes reminiscing about “the good old days”.  I’ll listen to music and say to myself “what is this crap”?  Or I look at the state of politics and I wonder to myself “things seemed so much better back when Reagan and Clinton were running things”.  I can’t be totally positive about this, but I think there are a couple of things going on here that lead me to forget that there’s never been a...

Share the post "When Theory Meets Reality" As a market practitioner who reads way too much academic economics and finance I often find myself disagreeing with theoretical perspectives.  This is the result of this strange disconnect on Wall Street where economists and financiers are often segregated.  Although finance and economics overlap in many ways they are viewed as two distinctly different worlds.  This creates a huge gap between theory and reality because the academic economists are...

Share the post "ISIS is About to Make the Euro Crisis a lot more Challenging" 2015 has seen an increasingly challenging environment across Europe. The Greek crisis nearly boiled over to a defection earlier in the year and now the tragic attacks in Paris are likely to make things even more challenging as we head into 2016.  There are two effects from the terrorist attacks that are likely to exacerbate the Euro crisis: Budget deficits are likely to expand and create more tension over the...

Share the post "My Interview on The Investor Podcast" I did an interview earlier this month on The Investor Podcast with Preston Psyh and Stig Brodersen.  We covered a lot of different topics, but focused mainly on my white paper “Understanding the Modern Monetary System”.  We discuss: The importance of forming a sound operational understanding of the monetary system not only for investment purposes, but for political purposes How innovation can overcome regulations and demographic...

Share the post "The Impractical Economics of Bernie Sanders" Extremist views don’t mesh well with economics.  While they often sound good in theory they don’t work well in practice.  This was the crux of much of my criticism of the Republican debates last week (see my comments on the gold standard and Rand Paul’s views).  Unfortunately, some of the same (well, very different actually) extremist views are on display in the Democratic debates.  Bernie Sanders is front and center here and...

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...