Monday, November 28, 2011

The Global Economy's Effects on Investors

1 - The U.S. stock market has lost ground every day for the last seven sessions; according to, those seven days have drained 7.8% from the S&P 500. The latest causes for pessimism continue to come from  politicians on both sides of the Atlantic. The situation in this country won't be settled until next November's national elections -- and may not be settled even then. As ugly as it is here in the states, it is much more complicated in Europe, where the leaders of about a dozen countries -- countries with competing interests and grouchy electorates -- must somehow come together on a unified cure to a rapidly growing infection. Bottom line: we don't have a clue as to where all this is going. Hold on to your hat.

2 - To view a 3-minute video about the economic picture and how we're dealing with it at Millard & Company, click here.

3 - Remember that this coming Thursday (December 1) is our client holiday Dinner and a Movie event. As of this writing, we have received RSVPs from about 50 clients and guests, and we're looking forward to a fun and festive evening. If you haven't signed up yet, click here to do so.

I hope your Thanksgiving was a good one. Have a great week -- and do your Christmas shopping locally!


Tuesday, November 22, 2011

Thanksgiving Message from Andy Millard

1 - Good news: it looks like the federal government will indeed be able to cut $1.2 trillion from the deficit over the next ten years. Bad news: the reduction almost certainly will not come as a result of the Congressional "supercommittee," but rather as a result of the so-called sequester, a process of automatic across-the-board cuts set to occur in the event of the committee's failure to reach an accord. Indeed, the group's twelve members haven't even gathered at the same table for many days, and members signaled last night that they had failed in their mission. What may be even worse is the very real possibility that Congress could rescind the sequester mechanism and its accompanying deficit reduction. What seems clear is that this problem will once again be kicked down the road, to be settled by next year's presidential and Congressional elections. In the meantime, don't expect the financial markets to be happy about the apparently permanent gridlock.

2 - The combination of deepening European woes and the fading hopes of our country's deficit-reduction committee sent global financial markets gyrating downward last week, and the news doesn't look any better this week. But although last week's losses might well be extended as a result, such an outcome is not a foregone conclusion. If there's one thing I've learned in 17 years of watching this stuff, it's that you usually shouldn't assume an automatic cause-and-effect.

3 - We are especially thankful this year at Millard & Company. We've had an outstanding year in our new home, and as the holidays approach, we count our many blessings. Thankfulness is even more potent when it is applied to the future. We recognize the daunting challenges that surround us in this world. But we choose to see an ever brightening road ahead -- for ourselves, our families, our friends and our clients -- and we will work to make that vision a reality. Some may call it wishful thinking; I call it faith.

Shortly before Thanksgiving last year, my Dad (the Great Bob Millard) and I were having one of our periodic computer lessons where I attempt (almost always in vain) to answer his questions -- questions such as: "Why is my email broken?" and "Where is the Internet?" The video below was my attempt to show him one of the wonders of his home computer: the ability to produce videos. It turned into a spontaneous expression of Thanksgiving for both of us. I sent it last year at this time, and the response was so enthusiastic that I thought I'd share it with you again. Happy Thanksgiving!

Have a wonderful Thanksgiving!


Tuesday, November 15, 2011

How About a Roller Coaster Ride?

1 - The stock market finished last week strong -- the Dow Jones Industrial Average gained over two percent on Friday. But as has been the case for several months, the real story is daily, stomach-turning volatility based on continuing uncertainty in Europe. The recent habit of stocks to soar or plunge based on a single day's news, only to reverse direction following the next headline, is troubling to say the least. It's starkly obvious that investors know nothing beyond the present moment, so for a while at least, the present moment will dictate the movement of the markets. Clearly, caution continues to be the order of the day.

2 - The latest eurozone country to cause concern is Italy -- and this time we're talking about a major economy, the eighth-largest in the world. World markets reacted favorably to Prime Minister Silvio Berlusconi's resignation and replacement by economist Mario Monti, but that country's troubles are far from over. Read "Uncertainty Over Italy" below for a thumbnail description of the situation and its potential ramifications.

3 - Reservations for our upcoming Client Dinner and a Movie event are coming in fast. We already have about 35 RSVPs, and we're looking for more. You know that we're going to watch It's a Wonderful Life, but here's the twist: we're going to see the colorized version. Like many people, I generally enjoy seeing vintage movies in their original black and white, but I really think you'll enjoy the high-def colorized version. The colors are vivid and natural, and with a film as familiar as this one, the addition of color allows you to experience it in a whole new way. Come with an open mind, and prepare to be amazed. Click here to RSVP if you haven't already done so.

4 - Check out the video below; the topic is change, and it will leave your head spinning.

Have a glorious week!


Tuesday, November 8, 2011

Madoff's other Victims

1 - Last Thursday morning, I attended a breakfast briefing in Atlanta with Tony Crescenzi Tony Crescenzi, executive vice president of PIMCO and author of the newly-released book Beyond the Keynesian Endpoint Beyond the Keynesian Endpoint. He discussed the European Union economic agreement that had been reached the day before. In the deal, Europe agreed to guarantee the debt issued by European banks, sort of like the FDIC does in our country. But while he praised the spirit and depth of the agreement, he pointed out that it is as yet disturbingly short on details. Crescenzi went on to describe the three major areas of concern for investors: (1) Europe, (2) the possibility of a renewed recession, and (3) the US deficit negotiations. Thursday's agreement went a long way toward alleviating the first worry, and the rising stock market and other indicators have somewhat reduced the second -- although both continue to be real threats. The third is a wild card, with the deadline for an agreement falling on November 23 -- the day before Thanksgiving.

2 - Last night's edition of the CBS news broadcast 60 Minutes opened with an extensive story about Bernard Madoff's wife and remaining son Andrew (the other son, Mark, hanged himself a year after his father's crimes were discovered). If you believe them (which I did, for what it's worth), the biggest Ponzi schemer in history deceived them just as completely as he did everyone else. The interviews were haunting, difficult to watch -- one might even say devastating -- and Sharon and I sat in stunned silence for several minutes afterward. Not only did Madoff ruin his own life and those of his many clients, he also caused one son to commit suicide and shattered the existence of his formerly loyal wife and remaining son. While many viewers understandably will have little sympathy for them, considering their many years of wealth and luxury at the expense of innocent investors, I couldn't help but feel the pain of such an unthinkable betrayal. And the saddest part is this: Madoff left hundreds -- perhaps thousands -- of other, equally shattered victims in the wake of his crimes.

3 - Here's why some people are so pessimistic about our national policymakers' ability to come together on a budget-cutting solution. USA Today reports in a recent article that members of the Congressional deficit reduction committee can't even agree on a proposal to replace the $1 bill with a $1 coin. The switch, which has been considered for years and would save taxpayers $5.6 billion, is the subject of competing lobbying efforts from mining and vending companies (on the side of the coins) and paper and ink producers (in favor of the bills). This issue may be the proverbial canary in the coal mine: if members can't agree on it, how will they come together on the really big ones?

4 - If you love kids, come to downtown Tryon this afternoon at 4:00. There will be hundreds of costumed children (and their parents) collecting goodies from local businesses. If you call Millard & Company after 4:00, don't be surprised if you are asked to leave a message -- we'll probably be with the kids!

Check out our website,, for the video on Madoff's other Victims that will leave your head spinning. Have an outstanding week!