Saft on Wealth: High profits face a test

March 23, 2012

By James Saft

(Reuters) – With corporate profit margins at record levels, the stock market faces a challenge because the logical next move may well be down.

High profits face a test

March 22, 2012

By James Saft

(Reuters) – With corporate profit margins at record levels, the stock market faces a challenge because the logical next move may well be down.

Esperanto vs the middlemen: James Saft

March 22, 2012

By James Saft

(Reuters) – If you think the advent of a common tongue in banking will solve the problems of finance, you are probably disappointed that Esperanto did not usher in a new age of world peace.

Treasuries: Joy, woe or head fake? James Saft

March 20, 2012

March 20 (Reuters) – The price of money is going up, but
it’s difficult to know if this signals a return to normality, a
step down inflation’s slippery slope or just a cunning head
fake.

Saft on wealth: What is gold for?

March 16, 2012

By James Saft

(Reuters) – An apparent economic recovery and a recent tumble in the price of gold has investors wondering if the precious metal has lost its place in a portfolio. Gold, having soared higher since the onset of the financial crisis, is down about 17 percent from its September peak, and has fallen 7.5 percent in less than a month. In large part, gold’s comeuppance is attributable to improving economic data and a sense that – terrible as things may be in Europe – the banking system will not implode. So, then, if the world’s not ending why own gold? Arguing the case against gold ownership is none other than Warren Buffett, who argues for equities and calls gold a non-productive asset. Why hold gold, which never innovates, never increases profit margins and never opens up new markets? “If you own one ounce of gold for an eternity, you will still own one ounce at its end,” Buffett wrote in his most recent annual letter to shareholders. here “This type of investment requires an expanding pool of buyers, who, in turn, are enticed because they believe the buying pool will expand still further. Owners are not inspired by what the asset itself can produce – it will remain lifeless forever – but rather by the belief that others will desire it even more avidly in the future,” Buffett said. Gold, Buffett correctly points out, has benefited first from a fear trade, bought up by investors who worry that central banks and governments will engineer a raging inflation in order to erode away the debts they struggle under.

The ‘long-term greedy’ canard: James Saft

March 15, 2012

By James Saft

(Reuters) – Nostalgia for the era when bankers were “long-term greedy” is a red herring, misdirecting our attention to how banks govern themselves when the true issue is how they are governed.

Column – The ‘long-term greedy’ canard: James Saft

March 15, 2012

By James Saft

(Reuters) – Nostalgia for the era when bankers were “long-term greedy” is a red herring, misdirecting our attention to how banks govern themselves when the true issue is how they are governed.

Bad bank funding drives out good: James Saft

March 13, 2012

By James Saft

(Reuters) – Official funding has a nasty habit of driving away free market money, as Europe’s banks may yet discover.

Ireland, debt and democracy risk: James Saft

March 12, 2012

By James Saft

(Reuters) – Ireland’s decision to hold a popular vote on Europe’s new fiscal treaty adds some unpredictable and much-needed risk to the seemingly inevitable course of the euro bailout steamroller.

Playing the 3-D printing revolution

March 12, 2012

By James Saft

(Reuters) – It may be the biggest thing to hit the global economy since the assembly line, and how you play it might just determine your success as an investor in the coming decades. Additive manufacturing, or 3-D printing, has the potential to radically change how products are designed, where they are built and what labor and material inputs are used. If it takes off, it could radically change global trade flows, delivering a huge boost to the indebted and aging developed world, while threatening the fundamentals which underpin manufacturing success in China and some other emerging markets. 3-D printing is a process under which highly customizable products are literally sprayed into existence using something not too dissimilar from an ink-jet printer. Originally used mostly to provide build prototypes, it is now being used for actual production, notably by a unit of EADS which is working on developing 3-D printing-produced aircraft parts. The advantages are huge: easier customization, lower labor costs and, potentially, a severing of the reliance on a supply chain, a feature of manufacturing since the days of Henry Ford.