Our Site has Moved

Hi All,

Please visit www.klaraos.com. We have launched a new and improved website where our blog information is in a much better layout.

We will not be making updates to this blog.

Thank you,
Klaraos

Penny Precision

Penny Precision
How precise does one really need to be? Growing up, curfew was 10:00, but 10:05 was approximately the same. My first job was making pizza and each pizza was supposed to have 1/3 pound of shredded cheese. Again, I guessed more than not, but was pretty closes to 1/3 pound. Then I worked construction, and the approximations narrowed significantly. It was basic math that stated whether or not a retaining wall had the correct force to support the structure of a house. Precision became quite crucial then.
It seems many firms have their own versions of ‘Precision’ these days. When rounding in the area of a tenth of a cent, accountants have found that a .4 is close enough to .5. This becomes crucial when rounding is involved because now, when stating earnings per share (EPS), 16.4 cents somehow magically makes its way to 16.5 cents, which is then rounded up to 17 cents per share. Millions of shares are bought and sold on the outcomes of these pennies.
At first, I found this quite intelligent number fudging until a report stated how this slight-of-hand was ascertained. The real genius comes down to standard mathematics. When deciphering the statistics of normal random distribution, the SEC found that when charting the tenth of a penny, the number four was found the least.

This anomaly was discovered by several people using computer programs to cipher through 26 years of data, only to state what was pretty obvious to begin with; precision for Wall Street is as exact as curfews and cooking.

Greece Cartoon

The Weight of a Nation

The Weight of a Nation

They say a team is only as strong as it weakest player. Currently in Europe, that weakest player is nearly anemic, with fragile players as teammates. This combination of players on a team is what is holding back the currency throughout most of Europe.
The downfall of Iceland as an outcome of the current economic crisis could be the first of many to fall by the wayside. Greece sits on the edge of bankruptcy, looking deep into the abyss of its demise. With this, the European Union is applying pressure on the Greeks to deal with their financial situation, but has refused to bail them out. The future of Greece is murky, and hope does not seem to be close in the distance.
Greece is not the only European country struggling to fix their economic woes. As Greece slides further into its budget deficit; Spain, Portugal, and Ireland look to join in the mire. When the first reports of Greece’s economic struggles were released, the Euro showed signs of weakness. Now, with several Eurozone countries in the mix, the Euro looks to get pulled down with a lot more than just the weight of one nation.

Obama Cartoon

Reminder: Holiday Open House Tomorrow!

Hey all,

Just a quick, friendly reminder that the Holiday Open House is tomorrow at our offices, at 6:00PM. If you have any questions, please let one of us know. We are looking forward to seeing everyone there.

Best,

The Klaraos Team

The Bottom Dollar

By Tim Coleman

As a native to Washington State, I used to travel to Vancouver, Canada about once a year, simply to feel wealthy. It used to be that you could travel up from the states, exchange US into Canadian dollars, and go shopping and skiing and whatever else made you smile, simply because the US Dollar was more dominant. That was a long time ago. These days the US dollar has shown the strength of a Chihuahua in a Pit Bull fight. Anyway, this is the first week in a long time that I thought of traveling back up north for some good old Canadian camaraderie.

This graph shows the dollar over the last four months and the blue line represents a downtrend that finally has been broken. This doesn’t mean that I can race back up to Vancouver and do all my Christmas shopping, but it does hint that a shift has struck this last week.

To back up my claim on the mighty dollar I found help with volume. Last week we saw volume jump nearly double. Friday’s spike in volume was three times what we’ve seen in the last half year. This is another hint at what may come.

Gold, oil and the Yen have backed up my synopsis on a trend shift. Historically, gold and the dollar tend to perform in an opposite manner.

Last week the Dollar showed strength, and gold had its first real pullback in months. Oil also followed suit in another pull back and the Bank of Japan recently offered up $113 billion in a lending program, simply trying to curb deflation. The last time Japan offered cheaper loans, the Yen tumbled 7.7 percent.

So, can I now quit my job and move to the frozen tundra of Mounties? Of course not, but I can keep a look out for things to change. When changes do arrive, Vancouver better watch out, because it’s been a long time since I’ve been up there and I would love for my precious US Dollar to have that Pit Bull fight back in it.