Monday, June 28, 2010

Depression Coming - Paul Krugman Plays Economist Again.

I just came across this post from tech ticker in which Krugman claims we're heading for another great depression. His reasoning? The governments of the world haven't yet bankrupted themselves sufficiently.

Yes, it seems that unending bailouts and unchecked handouts like the ones that got Greece in the news just don't go far enough.

Krugman contends that our economy is poised to re-run the events of 1937:
"Krugman believes that this is exactly the same mistake we made in 1937, when the country was beginning to emerge from the Great Depression. A sudden focus on austerity in 1937, it is widely believed, halted four years of strong growth and plunged the country back into recession, sending the unemployment rate soaring again."

The problem I see with this is that we haven't had 4 years of strong growth - in fact we've had less than a year of questionable growth (the government keeps revising the GDP downward)!

Another problem I have with this reasoning is that the Great Depression was a confluence of many different factors, and to imply that the government not saddling its citizenry with "enough" debt was the cause is just simplicity of the most naive sort.

But perhaps the biggest reason I discount Krugman's economic theories is that he is more political hack than economist. I don't expect him to not have a political preference, and I'm actually glad that he lets people know where on the political spectrum his views lie. But all to often his economic work is little more than a thinly veiled political attack at those on the opposite side, and that just detracts from the science of economics.

What say you? Am I off base here, or is Krugman little more than a hack?

Thursday, June 24, 2010

Mutual Funds Becoming ETFs? What Next?

Wow. I've heard of mergers and I've heard of mutual funds closing to new money, but this is new. According to this SmartMoney article, Huntington Asset Advisors is planning to create an actively managed ETF fund to mimic one of their mutual funds - Huntington Rotating Markets Fund (HRIAX).

I have to say, it's not surprising given that ETFs are so insanely popular, but I'm not sure investing in it makes sense for most people.

I guess it depends on the load of the relevant mutual fund and whether there is any big difference in expense ratio and fees, but otherwise it seems to defeat the purpose of an ETF to begin with. With all these actively managed ETFs, it's really begging to beg the question of what is an ETF really?

When they first hit the scene they were primarily index funds with extremely low expenses, but that seems to be less the case with every new ETF released.

Friday, June 4, 2010

TD Ameritrade Offers $100 Cash, When You Open an Account Online.

Listen up online traders! If you're interested in opening an online investing account with TD Ameritrade, head over to this site and receive the following;

  • 100 Commission-free Internet equity trades.

  • $100 in cash.

All you have to do is open an account from the link above and deposit $2,000 to start. You'll receive the 100 free trades for up to 60 days.

To get the cash reward, you have to start the account with $25,000. :(

That doesn't help me since I'm a small fry investor, but maybe it will help you or someone you know?

The offer expires on 07/15/2010, and your starting funds need to be transferred to the account within 30 days.