The Greatest Show On Earth

Things are getting interesting.  Last week, for instance, markets offered up both a rich comedy and tragedy above any story a Hollywood screenwriter could imagine.  The comedy, of course, was the Facebook IPO flop.  The tragedy, fittingly, was courtesy of the Greeks.

Yet the plot for both episodes was the same…it centered on market exploration.  The comedy garnered plenty of laughs as markets’ explored the true value of Facebook shares.  The tragedy received an abundance of tears while markets’ explored a Greek exit from the Eurozone.

Here at the Economic Prism we watched the shows with the hypnotized gaze of a child at the circus.  We knew the juggling clown on the unicycle was headed for a crackup…yet we couldn’t stop watching.

Obviously, Facebook shares are not worth the $38 price tag they were initially offered to the public at.  In fact, Mark Hulbert, at MarketWatch, crunched some numbers, and determined Facebook’s stock should trade for $13.80.  That’s 63 percent less than the IPO price. Continue reading

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Why the End of Uruguayan-Argentinian Bank Secrecy is Good News for Expats

Why the End of Uruguayan-Argentinian Bank Secrecy is Good News for Expats
By International Man

Uruguay Ends Bank Secrecy with Argentina and That’s Good News for Expats!

After months of negotiations, Uruguay capitulated to OECD and Argentine demands to end bank secrecy with respect to Argentine tax investigations.  Once the deal is ratified by both countries’ legislatures, Argentine tax inspectors will have access to Uruguayan bank account information for Argentine citizens suspected of tax evasion.

Oddly, this tax sharing agreement is just one of many questionable decisions by Uruguay’s government, all of which are bringing the local economy to a halt.

In order to understand the magnitude of this announcement, it is important to understand the significant degree to which Argentine investors dominate the Uruguayan economy and its banking system.

Over the last decade, the business environment in Argentina has been so bad, so business-unfriendly, that Argentine farmers, investors and businessmen were desperate to escape Argentina. Continue reading

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How Presidential Elections Are Won

The notion that Americans are a dense apathetic people, with no thought above reality television, is a favorite grievance of social critics and slanderers alike.  Yet, it has, in fact, only some reasonable basis.  The truth is that Americans, as a people, are not entirely indifferent and many are not lazy.

Certainly, the average American’s waist line has expanded a belt notch or two over the last half century.  So, too, spandex pants and oversized t-shirts have somehow gained acceptance as appropriate public attire.  Nonetheless, those Americans who haven’t been dispirited by public assistance still steadfastly get after it each day to improve their lot in life…or die trying.

Where politics is concerned, a passionate populace still reigns.  The mere mention of a presidential election rouses the emotions of even society’s most derelict individuals.  They’ll offer their most ardent opinion regardless of if they have any idea what they are talking about.

What is most important to most people is that they have a vote and that they’re free to express it.  The importance of using one’s vote wisely is secondary, if that. Continue reading

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The Fate of Markets

How quickly things change.  Several weeks ago stock market investors were riding high.  On the first day of the month, the DOW finished the day at 13,279…its highest close since December 2007.

It was just a matter of time – or so it seemed – until the DOW punched through its October 9, 2007, all-time high of 14,164.  You could just feel it.  Nonetheless, some weren’t buying.  They were selling…

“Sell in May and go away,” said the old-timers.

Obviously, so far, this has been good advice for those who bothered to listen.  Since May 1 the DOW has buckled like an overloaded mule…dropping 6.3 percent.  Even so, things could get much worse…

According to economist, Marc Faber, if the stock market were to move up much further we could witness a 1987 style crash.  On top of that, author, Chris Martenson, thinks we’re about to have another 2008-style crisis.  We suppose we’ll soon find out if they’re right.

In the meantime, stocks aren’t the only thing falling.  Oil, gold, copper, house prices…they’ve been going down too.  Yet not everything is going down. Continue reading

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