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Harvard Endowment Fund Re-Visited
The latest returns from the Harvard Endowment Fund are again outstanding and show the importance of proper diversification.
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FINANCIAL MARKETS COMMENTARY for WEEK ENDING AUGUST 15, 2008
For the 2nd week in a row, the US stock market was solidly higher. The stock market was led higher by a stronger US dollar and plunging commodity prices, with oil being in the forefront.
Lower gasoline prices are great, but there are negatives to this recent trend.
First, the only sector of the US economy which has been extremely strong(and keeping the economy out of a recession)has been the export sector. Now, the stronger US dollar is kicking out the remaining strong leg of the US economy.
Second, the stronger US dollar has led many foreign holders of US mortgage securities to sell them. This has pushed mortgage rates to levels not seen in a while, approaching 7%. This is not good news for the housing industry.
This effort to push the US dollar higher and commodities lower has been spearheaded by the Federal Reserve who is trying to bail Wall Street out again from stupid investments. This time Wall Street has placed massive bets of billions of dollars against global growth by betting that commodities would fall, foreign markets would fall, etc. The sad news is that with rising mortgage rates and other negative consequences of this policy, once again the Federal Reserve has sided with Wall Street and against Main Street.
Tony Daltorio, Investing Editor
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