- Discount Window Dos and Don'ts
- Commercial Paper Hangers
- Closed-End Fund Realities
- Weather Wonders
- Dead Guys
- Speaking Engagements

Discount Window Dos and Donts

So the Federal Reserve Bank made the move to drop the discount rate by 50 basis points. Is this for real?

Wow, the crisis is over. We can all go about our business and start borrowing and lending money again, right?

Not exactly.

It's a nice gesture. After all, the markets in the US, Canada, Europe and most of the remaining countries around the world are all clutched up so tight that, in some spots, they’re locked shut.

But what does it really do? Not much.


Continue reading "Pay Me Weekly: Play It Out"

By Neil George

• Who You Gonna Trust?
• Infrastructure Cash Keeps Coming
• Dead Guys
• Speaking Engagements

Who You Gonna Trust?

Ask any businessman if he could pay all of his bills and cover all of his debt on a moment’s notice and you’d get the same answer: Are you kidding?

Do the same for any consumer. Could you pay off your car leases or loans, credit cards, home equity lines, mortgages--all on a spur of the moment?

If the answer is yes, you’re not doing a lot with your assets. If companies have that much cash on their books, they’re missing out on a lot of business development, and shareholders should be wary.

Credit is the major underpinning of the market. And it’s not just for borrowing to consume; it’s a resource used to build and expand. Folks used to save up for years, maybe decades, before they could afford to pay cash for a major purchase such as a car. How would it work if we all had to pay cash for our vehicles?


Continue reading "Pay Me Weekly: Underpinnings"

For about 10 years now, I’ve been writing what has become By George. Back in the 1990s, it was the Daily Pink, which was the daily companion to my monthly journal Review & Focus. That journal was published at Mark Twain Bank in St. Louis, which was absorbed into US Bank (NYSE: USB) some years ago.

I produced these works as a way to focus my thoughts each day and share them with whoever cared to read them. The format has changed, along with the frequency and delivery, but the purpose is the same.

But I’ve also noted some changes in how information is gathered and how it can better be presented to those who do care.

We were once content to be patient to read about market developments over months. Then came the drive to figure out stuff on a weekly basis, then daily. Now, most of us are plugged in not just each day but on a constant basis.

Having access to information at will is great. But it’s also a potential problem. We can get wound up over something that drives us to act in ways that can end in trouble. This is particularly true when it comes to the markets and our investments.


Continue reading "Our Cut of the Cash"

When Charles Dow--you know, the guy whose company upstart Rupert Murdoch is using to get a leg up on business news--came up with some of his early market indexes, railroads were one of his key barometers for the direction in the economy.

But a lot has changed since Charles Dow. Railroads aren’t necessarily just a boom or bust part of the economy. And this is even more prevalent for the suppliers to rail; some of the best performers in the US market over the past several months have been rail operators’ suppliers.

Some parts of the rail industry have had issues--a weakening housing market has meant fewer shipments of building materials and lumber supplies. And freight loadings of some consumer goods--notably autos--have also cooled. But these products make up only a small part of total rail loads.

This is where my cohort at Personal Finance Elliott Gue and I have been following the industry, which continues to surprise many with its stock price performances. And the rails satisfy our usual mandate: They pay us.

Here’s Elliott’s take:



Continue reading "Not Just for Growth"

Remember the classic Christmas favorite, Frank Capra’s It’s A Wonderful Life? It’s a story about a building and loan company--what’s now commonly known as a thrift--that gets its capital from depositors and in turn lends it out for mortgages, all in one small town.

Trouble begins when one of its major sources of additional financing wants to take it down--and in turn grab the assets of the building and loan. He demands that a big chunk of his share in the company be paid back in cash on the spot.

Folks around town begin to hear rumors about the trouble and then get on board by trying to withdraw all of their deposits, creating a classic run on the bank.

The building and loan seems likely to go under--until cooler heads prevail and locals begin to understand how the company works. They put capital in and get interest and dividends from the mortgage loans. These loans usually can’t just be called, so there’s some time delay in raising cash, especially on the spot.

The building and loan could just hold all the cash in a vault and be ready on the moment to pay it all back. But that wouldn’t make for much of an operating company now would it?


Continue reading "Perception and Reality"

Are stocks spiraling into the abyss of a bear market? Or are they still on that upward spiral of unbridled greed and manic promotion that had way too many folks giddy over recent tops in the S&P 500 and Dow Jones Industrial Average?

The latest victim is the mortgage market. Folks seem to think that every single mortgage lender and, by extension, every corporate banker is either a fraudster or an idiot. The result is a malaise in stocks that don’t even deal in mortgages or business loans.

But even those that do participate in the mortgage industry aren’t all doomed. Some actually do know what they’re doing, and they’re straightforward about their operations and finances.

Mortgage lending and investment aren’t for novices, especially when it comes to more creative mortgage lending. Investors and traders in mortgage companies tend to have a quick trigger finger whenever any news hits concerning mortgage lending companies, even if the facts reported don’t fit their own companies. “Guilt by association” can spread like wildfire, burning those that dump even the best lenders, only to regret it later.



Continue reading "Spiraling"

Don't like stocks these days? You're not alone.

The S&P 500 hasn’t been the place to be for traders--or investors--unless a short position is involved. What’s been working in the US stock market index, especially the past several days, has been longer-term US bonds. Unlike the US stock market, bonds haven’t fallen like a rock; they’ve actually rallied.

Sure, bonds aren’t immune to some short-term ups and downs as economic data flows day by day. But overall, bonds have been cruising along.

Everybody’s now holding and hoping that the general stock market is going to get its relief rally, which many pundits were anticipating as the Dow Jones Industrial Average plummeted. But the bond market is really on top of the game as traders and investors pile in, driving yields lower and prices higher.


Continue reading "Don't Like Stocks?"

Keeping up with the Dow Jones Industrial Average was quite a headache, if not a horror show, this week. How about those nice folks over at Standard & Poor's? Those guys know how to show some good losses, don't they?

The stock market indexes had some really bad days this week. Gut wrenching? Yes. Terminal? No.

What we need is to simply ignore all the chatter regarding how the big indexes are headed lower. At Personal Finance, we don't own a chunk of Dow stocks or the biggies of the S&P 500. But we tend to own what we want you to own and aren’t concerned about whether the Dow or the S&P 500 have a bad day, week or year.

Instead, it comes down to cash--not stuffing mattresses but owning investments that simply pay us. Owning investments that keep cash coming can buy a whole lot of time and patience when the general markets are in major flux or failure.


Continue reading "The Way Out"

Getting to the right stocks means sometimes stepping out of the mainstream markets. Some of the best growth companies happen to be in oddball locales with a little political heat. To get to the right markets at the right time, I have a few key guys inside the US intelligence community who provide my research team and Personal Finance readers the inside scoop on how to profit:

With most media and political attention directed toward Iraq, don’t forget about the rest of the world, the likely location of some of your biggest winners and, if you’re not careful, biggest losers.

In this article, we’ll travel the world to see what’s not just below the media radar but below public view so you know what your money is up against.


Continue reading "Hot Spots"

Editor's Note: I really do wear those bow-ties, Roger Conrad is literally the nicest guy on the planet, and Elliott Gue's affinity for English tailors survived his repatriation after university studies. Need your own proof?

I'd like to extend a special invitation to those of you joining me and my PF editorial team at the San Francisco Money Show: I'll be hosting the Dining Dozen at one of San Francisco’s finest establishments Friday, July 27, at 7:30 pm.

The cost for the Dining Dozen is $150 per person. So, if you’d like to join us for martinis, good food, my wine selections and stimulating conversation, call my publisher's Member Services at 800-832-2330 to make a reservation for you and a guest. We limit seating to only 12 people to keep the conversation intimate. Call early to secure your place.

There are few things more unpredictable than the weather. But weather is the most important factor in determining the short-term direction of natural gas prices.

We’re all aware of what happened to natural gas prices and the market in the wake of hurricanes Katrina and Rita, as US natural gas inventories were tight; many were concerned that a cold winter and high gas demand would bring shortages.

But the opposite was true: The warmest winter in more than a decade spelled low demand for heat across most of the country. Gas inventories built up through the spring months and now stand at near-record levels. Excess supplies have kept a lid on natural gas prices.


Continue reading "Unnatural Low"

Editor's Note: I really do wear those bow-ties, Roger Conrad is literally the nicest guy on the planet, and Elliott Gue's affinity for English tailors survived his repatriation after university studies. Need your own proof?

I'd like to extend a special invitation to those of you joining me and my PF editorial team at the San Francisco Money Show: I'll be hosting the Dining Dozen at one of San Francisco’s finest establishments Friday, July 27, at 7:30 pm.

The cost for the Dining Dozen is $150 per person. So, if you’d like to join us for martinis, good food, my wine selections and stimulating conversation, call my publisher's Member Services at 800-832-2330 to make a reservation for you and a guest. We limit seating to only 12 people to keep the conversation intimate. Call early to secure your place.

Sin pays--for investors, that is.

You may not approve of the habits that alcohol, tobacco and gambling outfits flourish on, but that doesn’t mean you should abstain from profiting from others’ vices.

Investing in a collection of sin stocks would have beaten the market handsomely during the past five years, as Ivan Martchev, associate editor of Personal Finance and editor of Vital Resource Investor, notes in the following discussion. Whether economic times are good or bad, people want their vices.


Continue reading "Pay for Our Sins"

Editor's Note: I really do wear those bow-ties, Roger Conrad is literally the nicest guy on the planet, and Elliott Gue's affinity for English tailors survived his repatriation after university studies. Need your own proof?

I'd like to extend a special invitation to those of you joining me and my PF editorial team at the San Francisco Money Show: I'll be hosting the Dining Dozen at one of San Francisco’s finest establishments Friday, July 27, at 7:30 pm.

The cost for the Dining Dozen is $150 per person. So, if you’d like to join us for martinis, good food, my wine selections and stimulating conversation, call my publisher's Member Services at 800-832-2330 to make a reservation for you and a guest. We limit seating to only 12 people to keep the conversation intimate. Call early to secure your place.

As we wind up another week’s work in the markets, many of us are gearing up to hit the links with our regular foursomes in the constant quest to shoot our age. Others are packing up the beach bag and jumping on the Long Island Expressway or the Garden State Parkway on the way to the Hamptons or, my favorite locale, Long Beach Island.


Continue reading "Packing the Beach Bag"

Editor's Note: I really do wear those bow-ties, Roger Conrad is the market's ultimate utility player, and Elliott Gue's affinity for English tailors survived his repatriation after university studies. Need your own proof?

I'd like to extend a special invitation to those of you joining me and my PF editorial team at the San Francisco Money Show: I'll be hosting the Dining Dozen at The Olympic Club, San Francisco's famed downtown athletic club, Friday, July 27, at 7:30 pm.

The cost for the Dining Dozen is $150 per person. So, if you’d like to join us for martinis, good food, my wine selections and stimulating conversation, call my publisher's Member Services at 800-832-2330 to make a reservation for you and a guest. We limit seating to only 12 people to keep the conversation intimate. Call early to secure your place.

See you in San Francisco.


Continue reading "Days Turn into Weeks"

Editor's Note: I really do wear those bow-ties, Roger Conrad is the market's ultimate utility player, and Elliott Gue's affinity for English tailors survived his repatriation after university studies. Need your own proof?

I'd like to extend a special invitation to those of you joining me and my PF editorial team at the San Francisco Money Show: I'll be hosting the Dining Dozen at The Olympic Club, San Francisco's famed downtown athletic club, Friday, July 27, at 7:30 pm.

The cost for the Dining Dozen is $150 per person. So, if you’d like to join us for martinis, good food, my wine selections and stimulating conversation, call my publisher's Member Services at 800-832-2330 to make a reservation for you and a guest. We limit seating to only 12 people to keep the conversation intimate. Call early to secure your place.

See you in San Francisco.


Continue reading "Toil and Trouble"

The headlines of the weekend financial and business sections will be all about crude oil. Are we heading to even higher highs, or is this it? Will high crude prices be the end of economic expansion or an impetus for further gains?

For us at Personal Finance (http://www.pfnewsletter.com), it’s not about guessing the price of crude but rather how to make crude a real product. It’s also about turning that real product into real profits, complete with cash payments in the form of biggie dividends.

This is where I turn to my cohort, PF Associate Editor Elliott Gue. Elliott is my energy guru, so I asked him to help us all better understand the petrol market. This market isn’t just about the black sludge gushing out of the ground but the business of what happens well after that downstream from the wellhead.

One of the biggest and more certain parts of the downstream market for petrol is in moving it all around from where gas and oil is made through refineries and on to consumers. To enlighten us further, Elliott provided me with the following information:

US consumers burn through more than 61 billion cubic feet of natural gas and 20.5 million barrels of crude oil every day.


Continue reading "Not So Crude"