Seymour Zises, President and co-founder of Family Management, writes bi-monthly opinions on issues and observations of relevance to clients and investors.

Zig Zag
July/August 2009

What is the price to earnings multiple on hope? The stock market advanced as soon as President Obama said that it was a good buy. Did he mean a “good-bye”? Maybe the President should head for Wall Street after his career in government. As the markets have surged over 30 percent in the last few months, we find ourselves saying “where’s the beef?”

In referring to the economy, Larry Summers, a former Treasury Secretary and the current Director of the National Economic Council, said that it no longer feels like a ball falling off a table. So does it feel like a ball bouncing once it has fallen off a table?

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Quadrillion
July/August 2009

Not too long ago, a billion dollars was a lot of money. Not too long ago, a trillion dollars was a lot of money. Well my friends, welcome to the new world, “The Quadrillion Dollar World.” Before too long, we’ll hear that term as our deficit and expenditures rise to unprecedented levels. As the world becomes increasingly less confident in central banks, the price of gold has continued to rise. There is an inverse relationship between the two. The lack of confidence in paper money is showing up all around the globe.

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The New Deal
July/August 2009

“We must accept finite disappointment, but we must never lose infinite hope” said by Martin Luther King, Jr. These days, his comment could not be more relevant. The underpinning of every capitalist society is the financial strength of its banks. As of this writing, most of America’s large financial institutions have been compromised by loose lending standards and securitization of residential and commercial mortgages.

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Change
November/December 2008

That is what you would get from exchanging a $10.00 bill for one share of Citigroup. Can you believe it? As we write this letter, the U.S. government grows bigger and bigger while private industry continues to shrink. Is this absolute proof (as we have stated before) that repealing the Glass-Steagall Act was the biggest regulatory mistake of the 20th century? It is time for responsibility and accountability to return to American business.

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The Truth
September/October 2008

It was the spring of1994 and President Clinton decided to introduce an enormous “home ownership initiative” that would eventually loan over one trillion dollars to people who did not qualify for a mortgage. Thus, $200 billion a year for five years was pumped into the banking system with a directive to provide mortgages to those who were previously unqualified. So heavy handed was that initiative that the government was prepared to penalize banks (“The Community Reinvestment Act”) that did not lend to sub-prime candidates.

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