Finance Trends Letter

While yesterday's post dealt with money laundering and present-day drug smugglers , today's feature looks at their 1930s precursor: bootleggers of alcohol and the US Prohibition era of the 1920s and '30s. Russ Roberts of the EconTalk podcast speaks with author, Daniel Okrent about his latest book, Last Call: The Rise and Fall of Prohibition . Roberts notes at the outset that the book is not only a history of Prohibition, but also a thorough look at America and its social history leading up to the Prohibition era. It also seems to provide a real insight into the development of the progressive movement and its resulting "well intentioned" legislative acts. Have a listen to Okrent's and Roberts' look back at the rise and fall of prohibition; you may enjoy the insights on the unintended consequences of Constitutional amendments which were set up to restrict individual rights (rather than defend them). Related articles and posts: 1. The Economics of Prohibiti...

Here's a rather interesting piece of reporting from Bloomberg: "Banks Financing Mexico Drug Gangs Admitted in Wells Fargo Deal" . " Just before sunset on April 10, 2006, a DC-9 jet landed at the international airport in the port city of Ciudad del Carmen, 500 miles east of Mexico City. As soldiers on the ground approached the plane, the crew tried to shoo them away, saying there was a dangerous oil leak. So the troops grew suspicious and searched the jet. They found 128 black suitcases, packed with 5.7 tons of cocaine, valued at $100 million. The stash was supposed to have been delivered from Caracas to drug traffickers in Toluca, near Mexico City, Mexican prosecutors later found. Law enforcement officials also discovered something else. The smugglers had bought the DC-9 with laundered funds they transferred through two of the biggest banks in the U.S.: Wachovia Corp. and Bank of America Corp. , Bloomberg Markets magazine reports in its Augus...

Chart of the Day brings us this latest figure on "Post-Massive Bear Market Rallies" . In other words, they're plotting the extent and duration of some major index rallies that have occurred after a 50% or greater decline. Have a look at their chart description for more on the Dow and Nasdaq rallies which followed major market declines, and why this post-bear rally may be flattening out over the coming weeks and months. What do you say: are we in for a downward move in the major US market averages or a sideways consolidation period? Or are you prepared for whatever comes our way?

Slate's recent profile of writer/speculator, Vic Niederhoffer has been getting some attention from traders and finance types in recent days. I thought we'd take a look at it here too, to offer up some possible educational value from Vic's experiences with trading and loss. Here's an excerpt from Slate's profile of Victor Niederhoffer : " I've enjoyed getting your e-mails. It sounds like you've thought a lot about being wrong. Well, the reason you contacted me, to call a spade a spade, is that I'm sort of infamous for having made a big, notorious, terrible error not once but twice in my market career. Let's talk about those errors. The first was your investment in the Thai baht, which pretty much wiped you out when the Thai stock market crashed in 1997. I made so many errors there it's pathetic. I made one of my favorite errors: "The mouse with one hole is quickly cornered." That is key. There are certain decisions you make in li...

As I don't pretend to be an expert on matters of currency movements, here are comments from a few more knowledgeable sources on the recent policy shift in the Chinese renminbi (yuan) currency peg. 1. China to put renminbi in a currency basket - Daily Reckoning. "The renminbi is now 'flexible!'" These cats reckon that moves higher in the RMB vs. the dollar are not a foregone conclusion (as many/most suspect). 2. Chinese yuan under 5 by 2020 - Maoxian. Chairman Maoxian sees a long-term controlled appreciation of the Chinese currency that is likely to suit the country's own interests (and timetable). 3. Yuan revaluation impact to be limited - PragCap. Bondsquawk contributes this post on the revaluation, noting that deterioration in the euro is having an effect on "China's plan of allowing considerable appreciation for the yuan". 4. Chinese currency: why Americans should care about yuan revaluation - CSMonitor. Notes on how the exchange rate fle...

Some Friday reading (and listening material) for you in our, "Features of the Week". 1. Medvedev says he'll make Russia a "dream" for foreigners - Bloomberg TV. 2. Russian President Medvedev's interview on BP, Euro, political instability - WSJ. 3. North America in the lead? ETF assets & money flow. - Derek Hernquist. 4. James Rickards on, "Why BP Will Not Survive" - King World News. 5. Looking for stocks making "The Next Big Move" - Joe Fahmy. 6. "Refusing to Be Counted" : a conscientious objector to the census - Vijay Boyapati. 7. Interview with Jim Rickards on IMF, a global currency, and the economy - King World News. Hope you enjoyed these articles, interviews, and video features. Have a nice, peaceful weekend and we'll see you next week!

As noted on Twitter this AM, government estimates on the BP oil spill have been raised again , with the Obama administration now claiming 60,000 barrels a day are flowing into the Gulf. We've been following these estimates with interest, noting earlier this month that estimated spill numbers seem to be purposefully climbing higher towards Matt Simmons' earlier call of 120,000 barrels/day. Simmons made his call on the BP spill's magnitude toward the end of May in this Financial Sense Newshour interview . That estimate seemed to echo a report from Purdue University engineering professor Steve Werely , and today Matt Simmons is on Bloomberg repeating the 120k barrels/day estimate, citing research from a report published on Sunday. If you're curious about what the credit markets are saying about BP's future, here's a snapshot from Weekly TA on the CDS market's reading . WSJ reports that CDS on BP debt climbed to a record 625 basis points Wednesday, before se...