Tag Archive

New EPA Mileage Standards Could Stimulate Auto Sales

By John S. Tobey

A common view of government regulations is that they are a necessary evil. They can help in areas such as safety, but they can also interfere with free choice and efficiency – plus, they can be costly. However, there is an oft-overlooked benefit: Regulations can spur economic development. General Motors’ (GM) story in the... »

A Potential Boon from Lower Corporate Taxes

By John S. Tobey

Just when we thought paying the US government deficit was the highest concern, a joint political effort focused on future economic growth is emerging. The approach? To rewrite the corporate tax rules, with the goals of simplification and lowering the tax rates. Here’s why this action could be a boon – to the US... »

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... »

The US Stock Market’s New Thrills

By John S. Tobey

The US stock market continues to get into the record books. This time it’s the quick drop from April 26 to June 7, unmatched in the past 80 years except in 1950 when the Korean War broke out. So, what’s going on? Is this the beginning of a new bear market? Or is there... »

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. »

Buffett and Munger Support Regulation and Consequences – For Others

By John S. Tobey

Berkshire Hathaway Chairman Warren Buffett and Vice-Chairman Charles Munger made some prepared and impromptu statements at last weekend’s annual meeting and press conference. Some of those comments give us an unexpected – and disappointing – look into their thinking. »

Banks to Congress: “Don’t Fence Us In” – $20 Billion Derivative Revenue at Stake, but Not Future of the Business

By John S. Tobey

Congress’ derivative legislation work is stumbling about as the “big banks” press to avoid constraints on their money machine. $20 billion annual revenues is certainly worth fighting for, but it raises an important question: What are they doing with derivatives that is worth $20 billion? »

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... »

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