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Kurt Brouwer

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  • 3 Rules for Protecting Your Portfolio Against Inflation [View article]
    Good comments. Thanks.

    Javon96's point is a good one. The CPI methodology has changed since the early 1980s or so. Of course, some change is necessary because times are different. However, the current CPI measurement probably understates the inflation we feel most which is in food and fuel prices.

    There are some good analogies to the time period of the late 1970s too. Back then, the Fed allowed inflation expectations to take hold and it required very strong medicine to defeat those once Paul Volcker was appointed Fed chief in 1979. The Fed is allowing the same conditions to take hold now, albeit for different reasons than were in place back then.

    Investing in solid companies should provide some protection from inflation, provided they are undervalued when you buy them.
    Apr 6, 2011. 01:35 PM | Likes Like |Link to Comment
  • What's Down With the Dollar? [View article]
    Great comments everyone. Ben Gee: Your point is a good one. We too should use the vast natural gas reserves we have.

    CYounger: We are in a debt trap of our own making. By being afraid to suffer a moderate recession in 2001, the Fed kept rates too low and triggered the real estate bubble. Now, we are ramping up the effort to avoid a cyclical downturn. The dollar is not doomed, but we need to change. Problems deferred, seldom improve.

    You can go directly to the site here:
    Mar 23, 2011. 01:29 PM | Likes Like |Link to Comment
  • Budget Deficit: Overspending Is Killing Us [View article]
    Excellent comments. We can continue taking on debt if we want, but ultimately it will hurt us. Government debt does not have to be repaid as long as investors are willing to keep buying it. However, at some point, interest rates will go up and that will hit us hard. If rates go back to the level of a few years ago, the Federal deficit will soar due to higher interest expense.

    Debt is the symptom but overspending is the disease itself.
    Mar 16, 2011. 02:42 PM | Likes Like |Link to Comment
  • PIMCO Total Return, Risk Reduction and the Treasury Bond Tsunami [View article]
    BearFund -- Good response on the issue of duration. Cynic2011 must have been thinking of another type of duration.

    In regards to why Bill Gross puts out this information.

    First, he always has been very open with his commentary including the Monthly Investment Outlook as well as many interviews.

    Second, he is, in effect, talking his book. No portfolio manager can help doing that.

    In terms of the end of QE II, who knows? It has not happened yet. Given the turmoil in Japan, a decline in economic activity over there is likely so we may see QE III or as a stealth QE.

    As long as QE continues, it will be bearish for the dollar. However, being as weak as it is, eventually a dollar rally has to ensue.

    Thanks for the comments.
    Mar 15, 2011. 04:20 PM | Likes Like |Link to Comment
  • U.S. Treasuries Holders: China Is #2 [View article]
    Tricky -- These are national purchases. However, in the case of the UK, it is possible that China has purchased bonds through nominees so it could be skewed a bit.

    sandykoz -- The Fed could assess banks I suppose, but that is not the purpose of the Fed's purchase of Treasuries.
    Nov 29, 2010. 02:22 PM | Likes Like |Link to Comment
  • Are We Killing the Recovery? [View article]
    Lawrence -- I think my rule of thumb works even in your scenario. I'm not recommending it, just pointing that fact out.

    Valley Boy -- I have no idea what you mean. Hoover and Roosevelt turned a recession into the Great Depression and unemployment rates went well north of 25%. The Smoot Hawley Tariff Act of 1930 (signed by Republican Hoover) squelched international trade and ushered in the loss of millions of American jobs.

    Are you suggesting that was somehow an improvement over our present situation, dire as it is?
    Sep 29, 2010. 01:46 PM | Likes Like |Link to Comment
  • Second Biggest Deficit in 65 Years [View article]
    It's hard to say what they mean. Presumably, they are talking about mortgage backed securities, but no telling what they have up their sleeve.
    Sep 13, 2010. 02:49 PM | Likes Like |Link to Comment
  • Initial Jobless Claims: How Did They Stop Falling? [View article]
    I believe there is a 50 employee level built into Obamacare at which it kicks in. I have heard anecdotally that small businesses are making sure they do not go over that line.
    Sep 9, 2010. 06:17 PM | 2 Likes Like |Link to Comment
  • Initial Jobless Claims: How Did They Stop Falling? [View article]
    Thanks for the comments. I agree that claims are smaller today as a percent of the working population. That means something over longer periods, but I believe it is clear that claims are too high now to make any meaningful decline in unemployment likely in the next few months.

    Make sure to check out my blog as well:
    Sep 7, 2010. 04:28 PM | 1 Like Like |Link to Comment
  • Initial Jobless Claims: How Did They Stop Falling? [View article]
    I agree with mannettino on this. Uncertainty over future health insurance costs is a significant factor (along with others) plaguing small businesses. Health insurance reform has not really kicked in yet and it won't be until 2014 that we see the full effect, but, from what I have seen, insurance premiums are heading higher.
    Sep 5, 2010. 10:50 PM | 1 Like Like |Link to Comment
  • Is a Bond Market Bubble Brewing? [View article]
    Thanks for all the comments. I agree that interest rates will go up at some point and long-term bonds will get tagged. I just disagree with the bubble analogy. When tech stocks cratered in 2002, many fell 90%. Some disappeared altogether. I don't see anything like that magnitude of a decline as being likely in Treasuries or high quality bonds.

    Thanks for checking in here. You can also come over to the blog:
    Aug 31, 2010. 04:12 PM | Likes Like |Link to Comment
  • Income Investing: Opportunities in Stocks vs. Bonds [View article]
    Thanks for all the good comments. The home page for my blog is: Come on over.
    Aug 7, 2010. 02:41 PM | Likes Like |Link to Comment
  • Savings Up, Economy Down: Careful What You Wish For [View article]
    It is defined as follows by the St. Louis Fed:

    The BEA calculates personal saving by subtracting personal outlays (spending including non-mortgage interest payments) from disposable personal income (take-home pay). The personal saving rate (PSR), then, is the percentage of disposable personal income that isn’t spent. Simply put, a negative PSR implies that U.S. households are spending more income than they have to spend. Why? Households may expect that their incomes will increase in the long-run. They also have access to financial innovations—such as credit cards, home equity loans, and subprime mortgages—that allow expected future wealth to be transformed into current purchasing power. Other possible reasons for the recent “consumption boom” include low inflation, low long- term interest rates, and the perception that programs such as Social Security will provide financial support in later years.
    Aug 6, 2010. 04:11 PM | Likes Like |Link to Comment
  • How Gloomy Markets Rewarded Patient Investors in Berkshire Hathaway [View article]
    Thanks for the comments. I am a fan of Berkshire and Buffett as you can tell I'm sure.
    Jul 30, 2010. 01:38 PM | Likes Like |Link to Comment
  • Gold Coins Facing IRS Scrutiny? [View article]
    Thanks for all the comments. This post originally appeared at my blog on ( Check it out some time.

    I believe gold coins and dealers are just collateral damage on this provision because it affects almost everyone. What does this 1099 provision have to do with healthcare legislation in which it was found? Answer: nothing.

    Also, how could the IRS possibly scrutinize millions of new 1099s? Answer: they cannot.
    Jul 25, 2010. 04:08 PM | 1 Like Like |Link to Comment