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Vanguard’s New ETFs Defy Anti-US Stock Trend – Do They See Something Coming?

By John S. Tobey

Customary Wall Street practice is to follow the trend. Investment product creation and marketing tends to take the easy road. By focusing on what investors want now, firms figure they will simply change tactics when people want something different. In the end, however, the investor-client base that bought near the top feels taken advantage... »

Bond Rating Agencies Now Held Liable – Why That Is a Good Thing

By John S. Tobey

A provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act is the liability of bond rating agencies (e.g., Moody’s and Standard & Poor’s) whenever their ratings are included in formal SEC registration materials. The result: The bond rating agencies now are  disallowing their ratings from being used. Without them, securitized bond offerings... »

Lowenstein’s ‘End’ Whets Appetite for More

By John S. Tobey

BOOK REVIEW As Roger Lowenstein says, the “end” in his latest book’s title, The End of Wall Street, means the repudiation and cessation of Wall Street’s last, big phase. Consider it an evolutionary step that didn’t quite work out as planned. »

Pitfalls in Today’s US Stock Market – Part 3

By John S. Tobey

Given Wall Street’s disruptive game playing described in Parts 1 and 2, what’s an investor to do? Today, I address “III. How we can invest and protect ourselves.” »

Pitfalls in Today’s US Stock Market – Part 2

By John S. Tobey

This write-up continues yesterday’s discussion of an investment approach that seeks to frighten investors into selling at abnormally low prices. Under “II. Why is it allowed to exist,” we covered the removal of short-selling controls (uptick and “naked”) and weak enforcement of false rumors. Today, we will review two other important, negative forces in... »

Pitfalls in Today’s US Stock Market – Part 1

By John S. Tobey

Yesterday, I described two professional investment management approaches. When opportunities arise in emotional times, buy Sell short (and incite); then buy The first is not only sound investing, it provides the means for generating liquidity in tough times, a key element to the long-term health of our public ownership system. The second is the... »

Wall Street and SEC to Investors: “It Wasn’t Us, but We Will Fix It”

By John S. Tobey

Wall Street and the SEC have identified two culprits: High-speed, computerized trading – done by someone, somewhere. They’re not sure who or when or why, but they know it was the main cause New York Stock Exchange (NYSE) – “What? But weren’t they the only ones trying to bring order to the markets?” The... »

US Senate Solves “Too Big to Fail” Dilemma – Dismantlement

By John S. Tobey

Everyone hates the US Government’s two-option approach for dealing with supersized companies in trouble. Both choices (bailout and bankruptcy) have large, undesirable consequences, making for a dilemma. On Wednesday the US Senate approved a solution: A third option that allows conversion of one “too big” institution into many manageable companies. This is great news. »

The Three Sides of Financial Regulation: Rules, Guidelines and Saving Face

By John S. Tobey

When a product or service goes bad, there are three natural reactions: To punish those responsible, to help those harmed and to ensure it doesn’t happen again. I want to address the third item, which typically involves congress and government agencies ramping up protection for users. During such periods, we need to keep our... »

Credit Rating Firms – They’re Back

By John S. Tobey

In September there was talk of the credit rating agencies fading away. Credit ratings were going to be removed from investment guidelines, bond issuers would not bother getting their securities rated and Congress would adopt financial controls to diminish the raters’ independence. Well, the credit raters are back, and they’re showing the kind of... »

New Dawn Is Breaking – Be Ready

By John S. Tobey

Typically I write about one subject to give you an insight into a timely topic, key information that is being overlooked or an objective evaluation of a subject producing misleading emotions. Today, though, it’s time to rise above the details and look at the big picture because a major shift is in the works.... »

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