Special Update...........

There have been some interesting developments going on in the economic arena. Greece keeps the Euro-zone and the world in a constant state of speculation of weather the nation will default or achieve the financing to continue. Best of all, was an interesting working paper filed over at the BIS website. The report (Working Papers No. 300) that the dog wants to point you in the direction of is entitled "The future of public debt: prospects and implications" and is written by Stephen Cecchetti, Madhusudan Mohanty and Fabrizio Zampo. In short, the report claims that the debt in advanced nations is unsustainable and that drastic changes are necessary for monetary stability.

Here is the link from the BIS website: http://www.bis.org/publ/work300.htm

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Special update........

Well, here at the dog we wish to point you in the direction of the Euro-Zone. In our humble opinion, it may be a good thing for the U.S. if the Euro loses some value against the dollar. With the Euro monetary union in doubt because of fiscal issues within member nations it could push investment towards the U.S. Will the euro survive? Time will tell.


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What was a major part of the housing bubble???

In an article in Bloomberg, Federal Reserve Chairman Ben Bernanke said that low interest rates did not cause the housing bubble. Here at the dog we already knew this information (Examine our early 2009 posts). In our humble opinion, what was a major factor in the housing bubble was amending the SEC's "Net Capital Rule" in 2004 (Which basically lowered capital requirements). This rule is as old as the SEC and a major reason for its existence (The rule is part of the 1934 SEC Act). Back before the "Great Depression" there was a booming economy. During this time period (The roaring 20's), "Margin Financing" was used to help fuel the boom. Margin financing today is called "Leverage" or borrowing money. Guess what happens when you borrow too much??? (More than you can afford). The Net Capital Rule (1934) was there to keep safe capital levels in relation to debt. Currently, the government or more specifically the Financial Industry Regulatory Authority (FINRA) is attempting to raise capital requirements which in our opinion is an essential part for a potentially stable future. Click on the following link which is the new proposal for your review. (SEC Link Here)

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