John Ransom - UBS Pushes Hedge Funds
Posted: 12/9/2014 11:35:00 AM EST

Propelled by new software with a new algorithm that predicts whether the risks in hedge funds are low, medium or high, UBS securities is on a push to get advisors to include hedge funds in asset allocations for clients.

According to Investment News “those predictions are based on an algorithm that evaluates as many as three dozen variables intended to establish whether market, economic, liquidity and volatility risk factors support making allocations to hedge funds.”

Hedge funds have the ability to go both long and short in their portfolio, thereby hedging the market. 

But they are often seen as risky play. With the unraveling of Bernie Madoff’s hedge fund fraud and the high fees sometimes associated with hedge funds, clients can be reluctant to use them.

UBS is pushing to change that.

I'm okay with hedge funds. They generally get a bad rap, but when used properly can help boost risk-adjusted returns. You just need to know the risks.

John Ransom - Japan Trying 'Scare' Economy
Posted: 12/8/2014 1:10:00 PM EST

Japan’s economy contracted more than expected at an 1.9 annual rate last quarter. 

Japan's economy shrank more than initially reported in the third quarter on declines in business investment, data showed on Monday, surprising markets and backing premier Shinzo Abe's recent decision to delay a second sales tax hike.

And it shows the limitations of monetary stimulus measures. Japan has been embarked on a variation of America’s quantitative easing experiment, but the results thus far have been disappointing. 

In part that’s because Japan raised its sales tax from 5 percent to 8 percent last April. The country finally just postponed another scheduled tax increase for next year from 8% to 10%.

The hit from an April sales tax hike turned out to be bigger than expected, the revised gross domestic product data indicated, underscoring the challenges Abe and the Bank of Japan face in pulling the world's third-largest economy sustainably out of deflation.

Like here at home Japan’s politicians are trying to ignite inflation hoping that rising prices will scare the Japanese into buying stuff to get the economy going again.

They have no other plan.

Think about THAT.

Michael Schaus - In Other News: Caring Leftist Praises the “Social Good” of Aborting “Marginal Children”
Posted: 12/8/2014 12:14:00 PM EST

Here are some other highlights and headlines that I noticed over at Ransom Notes Radio:

Vermont is looking at socialized medicine. To pay for a “free” healthcare system, the state would have to raise over $2.2 billion from roughly 630,000 tax-paying citizens. It was awfully nice of those 630,000 Vermonters to work hard, and earn money, so the rest of the state could plunder their profits.


Remember Jonathan Gruber, the guy that boasted about hoodwinking the American people into believing Healthcare Reform was about reforming healthcare? Well, he’s at it again. He’s recently called abortion a “social good” because it reduces the number of “marginal children” in poor urban neighborhoods…. Goebbels called. He wants his reputation back.


It sure would have been nice if Obama was telling us the truth when he said we could keep our doctor because finding a replacement might get kinda tough in the near future.

(Yahoo News)

After Michael Brown was shot by police officer Darren Wilson, Eric Holder sent DOJ officials to Ferguson Missouri to “educate” citizens about “white privilege”. I guess the DOJ is where Al-Sharpton wannabes go when they can’t get their own show on MSNBC.

(National Review)

Eric Holder is releasing his new “racial profiling” guidelines. I’m not sure he gets it: His skin color has nothing to do with why I think he’s a criminal.


A college professor with a pro-communist bias is requiring that his students pledge allegiance to the “racist, sexist, homophobic” United States of America. Yeah… America is a pretty rough place compared to all those communist utopias of the 20th century, right?

(Campus Reform)

John Ransom - More 'Reform': Banks Charge for Big Deposits
Posted: 12/8/2014 12:01:00 PM EST

The Wall Street Journal is reporting that big banks are telling customers to take their cash somewhere else.

Banks are urging some of their largest customers in the U.S. to take their cash elsewhere or be slapped with fees, citing new regulations that make it onerous for them to hold certain deposits.

The banks, includingJ.P. Morgan Chase& Co.,CitigroupInc.,HSBC HoldingsPLC,Deutsche BankAG andBank of AmericaCorp. , have spoken privately with clients in recent months to tell them that the new regulations are making some deposits less profitable, according to people familiar with the conversations.

The banking laws have become some backwards that not only do the banks not want to lend money, they don’t want to deposit money.

In fact in some cases they will be charging large corporations for deposits, which, according to the Journal will make corporations seek out more sophisticated cash management portfolios.

Some corporate officials said the new rules could make it more expensive for them to keep money in the bank or push them into riskier savings instruments such as short-term bond funds or uninsured money-market funds.

“You’re going to see a lot of corporations that have had much simpler portfolios that are going to move toward more sophisticated portfolios,” said Tory Hazard, president and chief operating officer of Institutional Cash Distributors, a broker to large clients looking for places to hold their cash.

These changes are a fundamental change to the way banks operate. Typically banks take the money deposited and loan it out.

But not anymore with the big deposits. Instead they will have to charge companies for large deposits.

So if you are wondering why banks aren’t loaning money, it’s because they won’t have money anymore.

And the good news, I say sarcastically, bank reform measures passed by congress haven’t even been halfway implemented yet.

So stay tuned for more reform from congress.

John Ransom - Friday Dec 5th: Ransom Notes Live Investing TV Show 1PM-3PM ET-- NEW!
Posted: 12/5/2014 12:57:00 PM EST
Michael Schaus - In Other News: High Praise! MSNBC Says Obama is Not as Bad as Kim Jong Un
Posted: 12/5/2014 12:46:00 PM EST

Here are some other highlights and headlines that I noticed over at Ransom Notes Radio:

A criminal in England used hypnosis to rob his victim… Kinda like what Obama did to America.


Labor Force Participation is still at a 36 year low. I would make a Jimmy Carter/ Barack Obama comment here, but I don't want to insult peanut farmers.

(CNS News)

China has decided to implement a reeducation program designed to teach artists about the virtues of the communist party. In parts of America we call this public education.


MSNBC points out that Obama is not a dictator… when he's compared to North Korea’s leader. Is this really the best they could do? I mean, it seems like that is setting the bar kinda low, don’t ya think?

(News Busters)

An armed man stopped a robbery attempt at a Red Lobster. This story should be national news – It’s not everyday someone is caught eating at Red Lobster.

(Daily Caller)

Even Democrats are now admitting that Obama’s plan to regulate the internet, is really a multi-billion dollar tax scheme. The first clue that this was really a revenue scheme should have been that Obama proposed it.

(Wall Street Journal)

John Ransom - Consensus No Consensus
Posted: 12/5/2014 11:02:00 AM EST

The jobs report came in strong with the BLS reporting 322,000 jobs created for the month of November. Unemployment remained unchanged at 5.8%.

Yet economists are still cautiously pessimistic about the economy, with moderating growth on the forecast.

While recent quarters have seen GDP growth of near 4 percent, the outlook is for that growth to slow going forward.

Much of that is because wages are not going up. And much of that is because Americans are either unemployed or underemployed.

And despite all that, the strong jobs report will certainly reignite the debate about when or if the Federal Reserve Bank will ever raise interest rates in the near-term.

Just as we discussed yesterday—on the investing show-- the consensus has been that interest rates would stay low for the immediate future.

That consensus could change with this jobs report. And then changed again next week with another report.

John Ransom - Long-Term Unemployment is Key to Puzzle
Posted: 12/4/2014 2:06:00 PM EST

Applications for new unemployment benefits came down a bit to 297,000 for the previous week, says the Labor Department.

But the four-week average remains just a whisker below the 300,000 job per week level. But as the Wall Street Journal noted this week, short-term unemployment is moving down while unemployment of those out of work for more than 27 weeks is still stubbornly high.

Economists are puzzled by the discrepancy.

However some people like myself have suggested that perhaps we aren’t training and educating folks for the jobs available to workers in the modern economy.

We live in a time when graduates with an associates degree pay less for college yet earn more out of school than those with a bachelor’s degree.

John Ransom - Thirty Year Mortgage Continues Plunge
Posted: 12/4/2014 1:06:00 PM EST

Rates for thirty-year mortgages continue to tumble. 

The average rate for the benchmark long mortgage fell to 3.89 percent, the fourth straight week of such declines. 

As I have noted previously, the plunge in interest rates has likely fueled a little more housing activity, which can be a boon for the economy. And despite starting the year with a consensus amongst so-called experts that this was the year we’d finally see rate hikes, interest rates have continued to fall. 

Mortgage rates on the thirty-year are now 50 basis points lower than at the start of the year. 

So now, with no signs of inflation and some concern that the economy may be slowing a bit, it doesn’t look like rates will be heading higher according to the so-called experts until next year. 

The rate of a fifteen-year mortgage now stands at 3.10 percent.

Michael Schaus - In Other News: Chinese Commies Out-Perform Obama Democrats
Posted: 12/4/2014 12:45:00 PM EST

Here are some other highlights and headlines that I noticed over at Ransom Notes Radio:

China is now the world’s economic leader, with America in 2nd place. Under Obama’s stewardship, America is being trounced by a bunch of communists. And China.

(Market Watch)

Protesters in New York were upset over a black musician singing “White Christmas”, because snow is racist (or something).


Coke decided to try using some sexy pinup girls in a campaign to sell milk… And, right on schedule, Leftist Feminists freaked out. Maybe next time Coke should use women in Burkas.

(Fox News)

Organizers of a Ferguson Protest at the University of Missouri, requested that only “people of color” take place in the demonstration. This goes to prove that American progressives are still the “Separate but Equal” advocates they have always been.

(The College Fix)

Roughly 100 human brains have been stolen from the University of Texas. (Including one from a guy named “Abby Normal .”) I really hope someone is planning on sending them to DC.


Hillary Clinton spoke to a largely empty auditorium at Georgetown University. Although, to be honest, I’m not sure that the occupied seats really did much to raise the collective IQ of the room.

(Daily Caller)


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