Monthly Archives: June 2015

Be Bearish Because Bundlers Bungled Budget

   Greece said this month they will save a postage stamp by “bundling” all of June’s payments which were due at different days this month into one big payment at the end of the month. Now they are not going to pay the June 30 “bundled” payment.    Of course the world has already discounted the possibility of Greek defaults. Of course the ECB can simply print up money and use it to bailout European banks that are too big to fail so as to prevent a massive EU crisis. But money printing in the form of Quantitative Easing is not enough to stimulate the economy into genuine sustainable growth. Additionally the EU has less corporate bonds than in the

2017-01-10T23:33:19-08:00June 29th, 2015|mayflowercapital blog|Comments Off on Be Bearish Because Bundlers Bungled Budget

NASDAQ Hits New High: Should You Buy?

   The NASDAQ index reached 5,143.31, exceeding the previous high of 5,132.52 of March 10, 2000. First, today’s NASDAQ members are significantly different than those of 2000. Secondly the economy was much more fundamentally sound and growing in 2000 than today. The current market has an enormous amount of low cost capital that is desperately seeking a decent yield and is being used to create bubbles. The tech bubble of 2000 while it had higher PE’s than today’s market was somewhat of a cash-based bubble where people used their ash to overpay for stocks. The current bubble has its support from the excess liquidity generated by the Federal Reserve’s Quantitative Easing which is unprecedented, untested radical and risky way to

2017-01-10T23:33:19-08:00June 18th, 2015|mayflowercapital blog|Comments Off on NASDAQ Hits New High: Should You Buy?

Corporate Tax Increase to Reduce Profits, Cool Down Stock Prices

  There was an article in the FT June 9th about multinational corporate tax avoidance and how it is being suppressed. This means, in my opinion, that taxes for businesses will go up, reducing corporate profits. Since a tax increase is deflationary, then expect this to reduce stock market prices, interest rates, and employment, etc. Corporations could respond by moving more jobs to low wage areas so they can cut costs to make up for higher taxes. The most important thing for a corporation besides sales is profits and in times of slow sales growth the best way to increase profit is to cut costs, usually by cutting wages. Also by moving more jobs offshore that increases the ability of a

2017-01-10T23:33:19-08:00June 16th, 2015|mayflowercapital blog|Comments Off on Corporate Tax Increase to Reduce Profits, Cool Down Stock Prices