As the goldbugs load up on gold futures, one of the main buyers of physical gold in pulling back. From the Financial Times: As India’s voracious appetite for gold wanes, producers of the precious metal are taking heed. Indian consumers buy about 25 per cent of the world’s gold, the vast majority of which is […]
Read more...A report by Credit Sights, as recounted by Research Recap says that credit card delinquencies are increasing, but not to the degree where there is any threat to the performance of credit card ABS pools. Unlike Fitch, which expects the historical relationship between credit card defaults and unemployment to continue (they normally track each other […]
Read more...From Bloomberg: Bear Stearns Cos. Chairman James “Jimmy” Cayne sold his shares in the firm prior to a shareholder vote on the company’s pending takeover by JPMorgan Chase & Co. Cayne sold 5.6 million shares at $10.84 a piece on March 25 on the New York Stock Exchange, according to a regulatory filing today. Bear […]
Read more...Before I put my buzz saw to work, let me make a few things clear. First, I have a good deal of respect for Robert Shiller’s work. Anyone who was willing to tell Greenspan in 1996 that he ought to be worried about asset bubbles has a good deal of foresight. Second, I am a […]
Read more...Two loosely related and thoughtful posts today point up some of the ways that the fundamental frameworks of how participants think about and relate to financial markets are breaking down. Note that this development is separate from the fact that financial institutions look pretty wobbly. Instead, these two writers, Roger Ehrenberg and Cassandra, highlight two […]
Read more...Dani Rodrik provides us the introduction to a new paper (co-authored with Arvind Subramanian), “Why Did Financial Globalization Disappoint?” which argus that financial liberalization. meaning making their economies more open to international capital flows, has not been a boon for developing economies. It has not produced not better growth and has increased volatility (think of […]
Read more...There has been so much happening in the news that I’ve neglected some of the more serious commentary… IP hypocrisy: US likes WTO rulings only when it wins Ars Technica. “Likes” in the headline is too weak a word. “Complies with” would be more accurate, as this article explains. Kicking the Can Down the Road […]
Read more...A reader sent this note by AIG’s Bernard Connolly, which is surprisingly blunt for a sell-side analyst: In saying today that the housing price correction must be allowed to proceed, Paulson is in effect calling for a massively weaker dollar – athough he probably does not realise it. Of course it is true, as Paulson […]
Read more...Two related sightings on Bloomberg, First, Deutsche Bank says it will fall short of its profit targets: Deutsche Bank AG, Germany’s biggest bank, said the U.S. subprime collapse and slowing economic growth will make it harder to reach a full-year profit goal. Deutsche Bank fell as much as 2.9 percent in Frankfurt trading after it […]
Read more...Martin Wolf of the Financial Times sees the Bear Stearns bailout as the high water mark of free market capitalist ideology. Staunch advocates of a light regulation, both the Fed and Hank Paulson, moved aggressively forward with a government sponsored salvage operation. Wolf says greater regulation is inevitable: the public simply (and correctly) will not […]
Read more...CR at Calculated Risk yesterday pointed to an important sign of improving conditions in the credit markets. The fever chart of the so-called third wave of the liquidity crunch, the TED spread, showed signs of improvement. The TED is difference between the interest on three month Treasuries and Libor; the earlier acute episodes were August-September […]
Read more...Dolphin woos with wood and grass BBC Massive ice shelf on verge of breakup CNN. Eeek. Citigroup slams BoE for risking damage to real economy Telegraph. Looks a bit cheeky and self-serving to me. The bank ought to know that proper protocol is to get a lobbying group or academic to front for you. Banks […]
Read more...As Senator Everett Dirksen once said, “A billion here, a billion there, and pretty soon you’re talking real money.” Although the powers that be have relied mainly on guarantees and loans rather than explicit payment to try to prop up financial institutions and the housing market, the same principle applies. Even though these commitments are […]
Read more...This forecast, that Wall Street credit-crunch-related losses could eventually total $460 billion, is mind-numbing. Consider that less than two weeks ago, the markets staged a rally on the comparatively cheery S&P forecast that a subprime bottom was in sight, that the total damage would be a mere $285 billion, and most of the rest of […]
Read more...This message came from an investor who has provided me with some very useful research from time to time: Mike Belkin, who writes a weekly technically-based look at lots of markets—the only technical service to which I subscribe—notes today that last week equity fund flows netted to a $22.9 billion inflow, broken down as $3.3 […]
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