US Finance World

Undeniably, being the typical employee who rises up at 7 AM, drives to work at 8 AM(traffic problems and all) and working under the not-so-pleasant scrutiny of the resident of the corner-office (namely, your boss) does have its perks. It is reassuring to know that as a regular employee, you will receive an X amount of money in X number of days, usually monthly. With this sense of security though, comes the knowledge that you will never receive more than that usual amount, unless you give up your social life and have dinner in your cubicle for that precious overtime pay.

Now, most people dread and live the scenario above. Thank goodness for internet research. You can get to earn extra money at your own pace. You might be wondering how profitable a venture into the internet research business would be. Note that virtually everyone who has access to the internet, goes online for a reason.

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Even if you’ve already joined the mad dash to diversify into foreign stocks, you may still have a warped view of the investing world.

In Saul Steinberg’s famous illustration for a 1976 cover of the New Yorker magazine, a few blocks of Manhattan loom large and the rest of the world looks tiny.

Today, his picture might be called “Portrait of the American Portfolio.” U.S. stocks make up only 42% of the value of all the planet’s equity markets. Yet the average American investor keeps 72% of stock assets here in the U.S., a preference for local companies that’s known as “home bias.”

And when American investors do go abroad, they treat the world as lopsided. Roughly 95% of the $25 billion that U.S. investors pumped into international funds in 2009 went into funds that specialize in emerging markets like Brazil, Russia, India and China, according to Morningstar. By year-end, U.S.

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Paul Volcker wrote a lengthy Op-Ed in the NY Times this weekend without really saying anything. He didn’t lay out rules for how he wants to reform the banks, rather, he reiterated obvious statements that we in the blogosphere have been railing about for 18 months, like:

To help facilitate that process, the concept of a “living will” has been set forth by a number of governments. Stockholders and management would not be protected. Creditors would be at risk, and would suffer to the extent that the ultimate liquidation value of the firm would fall short of its debts.

I mean, I agree with that concept, but it’s a “no shit sherlock” kind of reform. Volcker also made some comments about eliminating “too big to fail” so that we can afford one of capitalism’s necessary features: FAILURE. The quarterly SIGTARP (Special Inspector General to the TARP) report is out. Cal Read more…