Friday, February 24, 2012

What a Guy!

Last night I attended the New York Hedge Funds Roundtable and heard Mike Mayo speak.  He is a banking analyst who maintains high principles and dares to speak out about companies who do not.

He just published "Exile on Wall Street", which chronicles his career as arguably one of the country's top bank analysts and perhaps one of the few who understands that his fealty must be to the clients who invest, rather than to the companies he was employed by who were most interested in seeking profits.  It is a great read - especially for his honesty and willingness to admit when he was wrong (rarely) and not to gloat when he is right (frequently).  His mantra:  bank executives must be held accountable.  When fat compensation packages accrue to management who've managed to drive the share price down, thereby hurting its investors, something is wrong.  Very wrong.  He names several.

I've written before about banks and how those at the helm seem not to be accountable for the errors they made and the financial losses they have caused.  We the people are paying the piper.

Mike Mayo calls them out with truth and humor.

Wednesday, February 15, 2012

The Devil's in the Data

The latest retail sales report should come as no surprise to anyone - despite the rosier picture painted by Washington, few appear to be buying it. Nor, it seems, are they buying much of anything. Instead, buyers are voting with their feet, and the results aren't pretty.

Things like building materials, autos and furniture were hardest hit, dropping to barely a tenth of their combined December levels. Some try to suggest that retails sales are up, if you subtract gas, autos and building materials - which seems to be a crazy way of looking at it. After all, gas prices have risen steadily for several months, and most of America drives daily. Subtracting gas prices from overall retail sales is hardly representative of any economy, healthy or not.

Food sales shot up to the highest level in months. But it may not mean necessarily that people are buying more. Rather, a more reasonable explanation could be that prices are higher, as nearly anyone who enters a grocery store - even Costco and Sam's Club - will attest.

What the data signals is that we're still slogging our way out of this recession, and will be doing so for the foreseeable future. Until people get back to work, don't expect much to change.