Finance Trends Letter

Today, a little bit of info in the personal finance and investing department. Ever wonder about the benefits of investing in index funds vs. ETFs, or vice versa? Here's a post from The Financial Philosopher blog that might help you to fine tune your investment strategy. Parts one and two in The Financial Philosopher's index fund vs. ETF debate. See also: Altruist Financial Advisor's ETFs vs. index funds breakdown . Let us know if you have any additional info on the subject. Remember: all posts on investing made here are for educational purposes only. Responsibility for your investment decisions rests with you alone; do your own research and/or consult a trusted investment adviser .

The fallout from the U.S. housing bubble continues, as Barry Ritholtz details in his recent post, "Housing Freefall Continues Unabated" . He notes that the S&P/Case-Shiller Home Price indices show negative returns in the National Home Price Index, and many of the other sub-indexes besides. Ritholtz also points to recent news that suggests the housing and construction bust is far from over, despite constant reiterations to the contrary from the media and its endless parade of talking heads. Check out Barry's post at the link above.

An interesting essay from the Mises Institute called, "The Truth About Tulip Mania" . Here's the author explaining why this speculative mania, much misunderstood and frequently mischaracterized, is important to understand: The story of Tulipmania is not only about tulips and their price movements, and certainly studying the "fundamentals of the tulip market" does not explain the occurrence of this speculative bubble. The price of tulips only served as a manifestation of the end result of a government policy that expanded the quantity of money and thus fostered an environment for speculation and malinvestment. This scenario has been played out over and over throughout history. This is an important view of what may have fueled the speculative bubble in Holland, and the author goes so far as to present evidence of a rising money supply before and during the bubble period. This, the author argues, shows conditions for a bubble were ripe. Read on for an interesting v...

I wanted to hold back from commenting on the idiocy of this latest gasoline price gouging legislation I'd heard about until I got a little more feedback and information. My first reaction upon hearing of this ill-conceived exercise in demagoguery was a lack of surprise, combined with a head-shaking disgust regarding the undefined nature of the supposed crime. Assuming that our wise and omniscient politicians were able to "correct" the alleged flaws in the pricing of this commodity, how would they go about identifying the so-called gougers? Is there a reasonable and logical definition of price gouging as described in the House of Representatives' legislation ? The answer, unsurprisingly, is no, there is not. Here's a taste of what the politicians have cooked up , in their latest attempt to save us all: The gouging bill would prohibit the sale of gasoline or other refined petroleum products at ``unconscionably excessive'' prices or prices that take ``unfai...

Welcome to this Friday's edition of "Features of the week". Many interesting stories and article links ahead! 1. Wolfowitz has departed his role as the World Bank president, but the media focuses on the search for a new president . Meanwhile, few bother to ask what the World Bank really does in the first place. 2. At James Simons' Renaissance Technologies hedge fund, only scientists need apply . 3. Bloomberg Markets Magazine on a growing force in the markets: artificial intelligence . 4. Another exchange merger: Nasdaq to buy Sweden's OMX for $3.7 billion . 5. Jim Rogers talks about investing in China, Japan, and commodities. 6. Another hedge fund manager goes public: FT Alphaville on the IPO of Platinum Asset Management and founder Kerr Neilson, the "Warren Buffett of Australia" . 7. Reuters on Britian's "surveillance society" . 8. Bloomberg discusses a row over Okinawan history during the second World War. 9. Archaeologists struggle to...

So you've come back from the grocery store, ready to fire up the grill and throw on a few delectable corn cobs with your steak. The only problem is that you seem to be more hot than your recently turned on grill, and what's got you fired up is rising food prices! Kind of hard to enjoy the bountiful meal you've prepared when you're paying out the nose for it, right? At times like this, there's only one thing to do: blame the hedge funds! We've all heard the recent reports of rising food costs across the globe. Media and Wall Street analysts have labeled this trend, "food price inflation", or more recently, "agflation" . But are the higher food and grain prices we're seeing a "driver of inflation" as the news media reports, or a symptom of the higher cost of living we face as true inflation erodes the purchasing power of paper currencies across the globe? As I wrote in, "Agflation is the new buzzword" , the true cause o...

Platinum's hot, palladium's hot. So let's take a quick look at what's happening in the platinum group metals (PGMs) space. We recently covered the news of some newly-launched exchange-traded commodities (ETCs) in the precious metals groups. ETF Securities and Swiss bank ZKB both recently introduced ETCs representing physical platinum and palladium . No platinum or palladium ETFs currently exist in the U.S. More info on the European PGMs ETCs from Reuters . Demand for the ETFs has been strong, and additional demand has started to come on for palladium as jewelry use, speculative buying, and auto/industrial use has increased. Some analysts are starting to see demand for platinum shifting over to palladium, and think that the current gap between platinum and palladium prices could be narrowed. We talked about the trends that could drive a resurgence in palladium demand last spring; for more on this see, "Metals action and palladium notes" .