Credit Leads the Way

In the past month, we have observed historically low U.S. interest rates. On August 31, the 10-year US Treasury Note  closed to yield 2.473%, and the 30-year US Treasury Bond closed to yield 3.522%. Outside of the credit crisis of 2 years ago, these are the lowest yields on Treasury bonds in nearly 50 years according to Federal Reserve data, which ends in 1962. Peak U.S. interest rates were observed on October 2, 1981. On that day, the 10-year US Treasury Note closed to yield 15.68%, and the 30-year US Treasury Bond closed to yield 15.07%. Fully two generations of investors have been conditioned to approach the financial markets in a way that presumes an environment of declining interest rates. That assumption is now erroneous. Everything investors knew about how to make money in the financial markets will have to be substantially altered in this knew adverse interest rate environment.

Ode to the Pittsburgh Steelers

With the last pre-season NFL game for my team finally over, the new football season is upon us, and my favorite time of the year is here. I love the fall for the cooler sunny days, the brilliance of natures colors on the trees, and the popping of shoulder pads as giants on a gridiron engage in a battle of wills to achieve victory. When I was younger, I was completely obsessed with football. I would go to high school games on Friday, watch my college team (Penn State) and other college teams that might meet them on Saturday, and watch my pro team and the other pro teams that might meet them on Sunday. And, of course, the Monday night game. As I grew older, my interest waned in the high school and then the college game, and now I have lost interest in most pro games (which has not exactly disappointed my wife). But there exists a white-hot fire deep in the darkest recesses of my being, a passion, a loyalty, yes a love for the PITTSBURGH STEELERS that I think nobody except those of us from southwestern PA can really understand. This blog will attempt to explain it to you, so that you will know that no professional team has the kind of intimate relationship with their fans that Steelers fans do.

An effort towards frequency

As many of you are aware, disruptive change has been a constant in my life since this blog was born. Before I conceived of putting this blog together, I wanted to make a committment to post comments to it on a regular basis, in accordance with my own experience reading other people's blogs. I have failed by every objective measure of consistency thus far.

To stand out, I have tried to write things that are meaningful to me, and to fortify my assertions with historical precedent. While it may not seem obvious to my readers, I have expended a considerable amount of time and research to create my prior posts. To provide more consistency in my entries, I have come to the conclusion that I will have to sacrifice my relatively long and deliberative entries. I am not abandoning them entirely. I am hoping that they will be as frequent as they have been up to this time, but I intend to make more frequent but shorter entries that address the world in which I am immersed--ecnonomics, business and finance.

Stock Selection Shorthand

I’m going to lean more toward the ‘capitalist’ spectrum in this post, which hopefully will be a welcome change to many people. This post is again going to be pretty lengthy, and I apologize for that, as I have promised shorter posts. I guess what I am discovering is that if I care enough about a subject to actually write about it, I generally have a lot to say. My guess is as I more thoroughly lay out my point of view to you, these posts will tend to get shorter.


Throughout my career, I have worn many hats as a professional in the financial services industry. During much of that time, my family and many of my non-financial friends have had little to no idea what I actually did for a living. However, over the years many have asked me how I go about picking stocks, so I figured I would pass along the five general things I look at and what levels I am trying to find before becoming interested in a stock.

My wife is a lawyer and she has urged me to include what is called ‘a hedge clause’ at the top of this post, so here goes. I am not telling you to buy or to sell a stock or group of investments in the following post. I am not saying that this is the best way to go about picking stocks. Indeed, more than likely, it will turn out that I am completely full of crap, and I have the tax loss carry-forwards to prove it. The following post is just my opinion as to what is a good way to approach the stock market. Nuff said.

The Private Corporation--The Fulfillment of Private Property Rights

These first half-dozen or so posts have been fairly long and weighty, and have consequently led to a fair amount of time between posts to allow me to gather my thoughts and do some pertinent research. I have endeavored to lay out some first principals as to my governing philosophy in the economic and political realm. If anybody has ever seen the movie, Patton, with George C. Scott in the title role, this is the part of my blog that is analogous to the conclusion of the first 5 minutes of the movie where the General concludes his remarks to his troops by saying, "Awright you sunsabitches! Now you know how I feel!"

Indeed, you may be forgiven for thinking that this blog should be named Cambrian Republican instead of Capitalist given the nature of the first few remarks. I did so to underline a point. Capitalism could not exist without the antecedents of the American ecosystem that I outlined in the prior 4 posts:

1. An origin that declared that man's liberty supersedes the power of the state, and that every man's rights be secured through the rule of law regardless of ethnicity, religious affiliation or other parochial associations.
2. The creation of a precedent that instructs humility in public servants and facilitates the peaceful transfer of power from one administration to the other.
3. The written enumeration of the processes and powers invested in the government by which all citizens' liberty and property are secured.
4. When the success that resulted from the first 3 principles becomes self-evident to the peoples of the world, continue to remain true to your first principles by creating institutions that communicate the virtues of individual liberty, the rule of law, and more specifically the enforceability of contracts between parties.

Capitalism could not flourish in the absence of any one of these attributes. We are constantly reminded by history and in contemporary times that whenever any of the four attributes is threatened or removed from a country's ecosystem, capitalism is notably impaired and is immediately observable in the most visible component of a capitalist ecosystem--the private corporation.

Is America Exceptional?--Part 4 The Benign Empire

I have heard, fairly consistently, over the past 40 years that America's best days were behind it, and that was probably a good thing because we were suffering from Imperial overstretch that seemed to doom other major empires of history. Of course, that can be a matter of perspective (i.e. one man’s imperial aggressor is another man’s champion liberator).

Some of the major proponents of this theory ironically have always been the greatest benefactors of our international largess. European powers were bristling under the influence of our "authoritarian hegemony" 40 years ago, and were particularly vocal about the United States' "Imperial instincts" in recent years via the rantings of France's Chirac and Germany's Schroeder. The powers that move the European Continent have been continually frustrated by the, at times, overwhelming impact of the U.S. footprint in military/political/economic terms. In many instances over the past decade, they have worked at cross purposes with the U.S. in the pursuit of creating a "multi-polar" world order to restrain the apparent omnipotent hegemon.

Is America Exceptional?--Part 3 The Constitution

No meditation on the exceptional nature of the United States of America would be complete without an analysis of the Constitution. While the Declaration of Independence is the verse that inspired the birth of the nation, the Constitution is the plodding prose that instructs its citizens on how to remain true to the spirit of the verse. The Constitution obviously cannot be discussed thoroughly in this forum, as volumes of the very best scholarship have been produced over the centuries. I will restrict my comments to the uncommon nature of this document, its often overlooked central principles and main features of what its authors hoped would be sustainable, and some commentary on the effect the document had on the character of the nation.

A written document describing the governing principles of a polity--a constitution--was not altogether unique in the Colonial Era. John Adams was the primary drafter of the Massachusetts State Constitution, and Thomas Jefferson was the primary drafter of the Virginia State Constitution. However, in the summer of 1787 both men were thousands of miles away--Jefferson in France and Adams in England--representing the United States' interests in those countries. The act of constructing the document in America was the realization of the vision that Adams described during his fateful speech in the First Continental Congress urging the ratification of the Declaration of Independence.

Is America Exceptional?--Part 2 George Washington

The series of posts I have in mind for "Is America Exceptional?" continues to change as I meditate on the extremely broad subject. Indeed, the breadth of America's exceptionality defies concision and methodology. In my deliberations on the subject matter that should follow the first post in the series, I found myself thinking more and more about a man whose name is ubiquitous in our society, but who ironically is relatively unknown and underappreciated for the many gifts he bequeathed to his citizens and his country. Today George Washington turned 278 years old, and so I am compelled to cast my puny laurels to the man whose name is synonymous with greatness.

Contemporary scholarship on American History has tended to focus on the subject matter involving World War II and the Civil War. Those Americans who still care about their history and begin a cursory study of the Civil War, always tend to marvel at the extraordinary man who was Abraham Lincoln, and indeed I whole-heartedly agree that Lincoln was a great man who transcended his own time. Lincoln did things that defined many of the great aspects of this nation, and this nation would be unrecognizable without his efforts. Many historians--both amateur and professional alike--think so highly of Lincoln's contributions as to rate him the greatest of all Presidents. I believe this to be a grave error. While Lincoln did many great and virtuous things, the Lincoln we knew could never have existed without Washington.

Is America Exceptional?--Part 1

As a matter of introducing this topic, let me just state that I am astonished, given the tone of recent political discourse, one has to expend intellectual energy in establishing the fact that the United States is, indeed, an Exceptional Nation. It is not an exercise in jingoism to believe in the exceptional nature of America, because virtually all the defining characteristics about America can accurately be described as exceptional. However, powerful forces inside and outside of America have produced a great deal of rhetoric to diminish America's legacy and current standing in the world. I intend to catalog in great detail over several posts that the United States of America is manifestly an exceptional nation. Indeed, the experience of America describes the term--The Exceptional Nation. This post deals with America's exceptional birth, later posts will speak of the Constitution and American History and will respond to some of the most prevalent critiques of Americans and their activities throughout its history.

What is a Cambrian Capitalist?

I am an average American living in the Northeast U.S. with very strong convictions about a wide range of subjects. I am sure that people readily get the 'Capitalist' part of my blog title, but perhaps the 'Cambrian' part is a little less self-evident.

The Cambrian period of our earth's history was characterized by an explosion of life on the planet. Some suggest that this period marked the peak in the number of different species of life on the earth. Imagine the soupy, shallow seas teaming with life in an epic struggle to survive and thrive. This period, I believe, marks when our planet was most alive.

Cut to about 500 million years later, and another dramatic change occurred in the history of humanity. Humans, through their ingenuity and intellect, finally became the masters of their environment. We finally were able to overcome our own physical limitations to alter our surroundings and create improvements in the quality of our lives by great orders of magnitude. This period, the Industrial Revolution, was touched off via the arrangement of societies centered around a deep respect for human liberties, and based on the rule of laws and not men. These societies allowed for the organization of various stakeholders, in the pursuit of their own self-interests, to pool their private resources toward the achievement of their aims--Capitalism.

In the United States, the Silicon Valley of this period was located in western Pennsylvania. In the county of Cambria, where I was born and raised, private interests were busily innovating and improving methods of manufacturing the 'silicon' of the age--STEEL. By 1870, this area of the country housed the most modern and prolific steel manufacturing facilities in the world. Manufacturing firms were quickly born and in many cases quickly died, but those that survived and thrived, prospered mightily. Because of these early efforts, the world would be forever changed. Man could now build structures that would scrape the sky, structures that would allow travelers to bridge large bodies of water, and erect transport systems to integrate and unite a nation as large as a continent.

One hundred years later, I was born, and I got to witness from histories front row, a new change in the unforgiving ecosystem of capitalism. I witnessed the destruction of America's dominance of steel manufacturing in broad, swift strokes. This destruction is just as essential to the advancement of the human condition via capitalism, as the growth of the mighty steel industry was to western PA, and through my ruminations on this virtual parchment I intend to convey to you that the destruction wrought by capitalism is just as beautiful as the creation.

This blog is dedicated to the essential and harsh realities of liberty, a republic's governance, and capitalism--the three essential legs to creating an independent, self-directed and fulfilling life.