Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Mark to Market

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A fellow Sloper sent me this article from the Washington Post – – an excerpt……

A controversial change in accounting rules earlier this year has
allowed banks to claim billions of dollars in additional earnings
simply by tweaking their bookkeeping, greatly enhancing the appearance
that the industry is returning to health.

The proposal, which the standards board will consider issuing for
comment later this month, would require banks to report the value of
all loans and other assets based on the prices that buyers are willing
to pay. This process is called marking to market, and the result is
called a fair value. At present, banks are not required to report the
fair value of most loans. They can instead report a value based on the
original purchase price.

I'm sure we all remember when this goody was given away during the market's swoon. Reverting to the old method seems sensible, don't you think? I mean, if you bought $1 million of FAZ last March, and I asked you on a balance sheet to tell me how much that holding contributed to your net worth, don't you think it would be more proper to say its value was $28,000 (which is the truth) and not $1 million (the original purchase price)? Doesn't that seem beyond the most basic definition of "obvious"?

Dollar Sentiment

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One of the charts I enjoy in EWI's Short-Term Update is the US dollar versus sentiment. It has proven to be a reliable contrary indicator. Monday's issue showed that just about everyone hates the US dollar (and, given its performance, that is no surprise):

0805-dollar

The red "8.7" figure – a record low on this chart – shows how miserably low sentiment is toward the dollar.

The good news for the bears, if this contrarian notion pans out, is that a strong dollar will weaken most other assets (including equities). The EUR/USD has been quite strong since March 3rd, and is has brought the entire stock market up with it.