Ulivi Wealth Management

The past few days have seen a strong rise in stock prices (except Monday the 30th.).  Are we witnessing the beginning of a new bull market?  No one can know for sure until after the fact.  At best, all we can do is make predictions, because the future is always uncertain.  But am I willing to bet that the stock market will continue to increase in value in the short term?  No.

Why not?  Because one of the keys to rising stock prices is the general belief that corporate profits are on the rise and that they will be sustained over the next few years.  I don’t believe conditions are ripe for such a scenario just yet, because the American economy is driven by consumer spending which will not be increasing in the near future.  Rising unemployment, the need to replenish savings due to losses incurred in the stock and real estate markets, the low rate of interest being paid on CD and cash equivalents, and retiring baby boomers, are factors which will keep consumer spending at reduced levels for some time. Read the rest of this entry »

If the value of the dollar continues to drop, which is most likely, interest rates will need to rise or the dollar will continue to fall even further.  For example, this week the U.S. currency had its biggest weekly decline since May versus the euro, falling 1.9 percent. It dropped 2.5 percent drop versus the yen this week too, its fifth weekly decline in the longest losing streak since December

What are the consequences if the dollar continues to drop in relation to other currencies?  Those of us who are paid in dollars and have our assets in dollars will become poorer relative to our international counterparts.  Also, the price of imported products will increase, and because we import so much, we can expect to see higher inflation rates, which will make us poorer yet. Read the rest of this entry »

Professor Ricardo Ulivi, Ph.D.

It is not often that we Americans have the opportunity to examine the financial experiences of less developed countries and attempt to learn from them.  Usually they learn—or should learn—from us, but now may be the time to humble ourselves and see if we might benefit from their experiences.
There are a great many parallels between Argentina’s economic depression from 1999 through 2001 and the current situation we are facing in the United States.  Argentina overcame its depression starting in 2002 but it left enormous financial wounds and dramatic losses.  However, some investors had foresight and took certain actions which led them to make money—and lots of it– while others saw their savings and investments dwindle.  I believe we can learn from their examples, the good and the bad ones, and apply the lessons from Argentina so that we can place ourselves among the winners, when we get out of the current mess we are in. Read the rest of this entry »

Is the financial crisis over?  It depends on what we define as the crisis.  If we mean the credit freeze which began in the fall of 2008 and the panic that followed, yes, I believe the crisis is over.  Remember the fear we all experienced when we heard that blue chip financial companies like Lehman Bros. and Bear Stearns were disappearing instantly?  Remember when Paulson cited the heads of the greatest banks in the US and “forced” them to accept a massive gift of cash (what else can you call what he gave the banks)?  Remember when we read the Reserve money market fund was breaking the “buck per share” rule and investors were losing money?  When the chairman of GM flew in his private plane to seek his share of the billions being given away by the government?  All these events now seem part of history now, so yes, the crisis is over.  But does that mean that a new party has begun? Read the rest of this entry »