There is a nice little post at VoxEU, “(At least) Three simple reasons to fear inflation,” by Tommaso Monacelli, Associate Professor of Economics at Università Bocconi, Milan. While the entire article is worth reading, I thought his discussion of the interaction between growth and inflation was particulalry useful: In the plethora of comments on the […]
Read more...A nice recap in the Guardian of how far underwater the various sovereign wealth funds are on their investments in large Western financial institutions. The tally is not pretty. It isn’t simply that the losses are large in percentage terms, but the falls came fast, making the buyers look like chumps. And these were high […]
Read more...Commodities Unravel, Confidence Collapses The Financial Ninja. I don’t pretend to understand the charts, but the commentary is interesting. In Washington, a Split Over Regulation of Wall Street New York Times. The skirmishes are so preliminary that it’s obvious that any new rules are a long way off. Are Defaulting Homeowners All That Sympathetic? Paul […]
Read more...I am late to this story, which ran Thursday in the Financial Times, but is sufficiently important as to merit comment (and my quick search of the usual suspect blogs showed it went unreported there too). The Chinese temporarily suspended tax collection on mutual funds to bolster share prices. China’s stock market, which has been […]
Read more...If you read between the lines of the Financial Times story that served as a point of departure for a post earlier this evening (“Desperate Central Bankers to Bail Out MBS Market?“) it was clear that the Bank of England was the most keen to shore up the wobbly mortgage securities market. This New York […]
Read more...Leaping stingray kills US woman BBC Steve Forbes on Ending the Panic Cactus, Angry Bear The Bear Meltdown Rattles B-Students Business Week. I am no doubt going to anger a lot of fellow MBAs, but in my view, fewer people getting that degree would be a plus. I was in a position to get far […]
Read more...I quoted Lucy Kellaway, who once said (apropos management fads), “No idea is too ridiculous to be put into practice,” and warned that the credit crisis would soon get that sort of treatment. A story in the Financial Times indicated we are getting closer to that stage: Central banks on both sides of the Atlantic […]
Read more...I am mystified at the efforts by soon-to-be-ex chairman of Bear Stearns and still-barely-a-billionaire Joe Lewis, who took a large stake in the securities firm, to try to find another buyer for Bear. My pet theory is that Lewis et all are bluffing, knowing they have a very bad hand, to scare bondholders and CDS […]
Read more...Partying Like Its 1929 Paul Krugman AP president: US arrests journalist in Iraq to ‘control’ information Raw Story Wall Street Taps Fed’s New Loan Program Wall Street Journal You Weren’t Meant to Have a Boss Paul Graham. This essay looks at the workplace from an unexpected angle. Alan Greenspan Loses His Mind Paul Kedrosky Paul […]
Read more...I’m late to this item, which appeared in the Financial Times on Thursday, but according to Google News, was not reported elsewhere, so I thought it was still worth featuring. The IMF warned that commodities prices include a speculative element as investors are treating it as a new asset class and a safe haven in […]
Read more...A sign of the times: we haven’t sighted an Extreme Measure since October, and here we have two in one day (note that day was Thursday; we started on this last night but there were so many news-driven items that we are getting to this only now). By way of background, an Extreme Measure is […]
Read more...Today’s Bloomberg provides yet another example of how the credit crisis is producing behavior well outside historical norms. We had noted, courtesy Alea, that fails in the repo market had reached “massive” levels. The explanation? A lot of Treasuries are now held by investors who aren’t willing to lend them (this is often due to […]
Read more...The markets are making wildly different interpretations of the news and economic prospects. Record low T-bill prices and a sudden fall in commodities suggests that a serious slowdown and deleveraging pose major risks, yet equities had a strong showing, with the Dow up over 260 points. What gives? We’ve had repeated head-fake rallies in this […]
Read more...We had observed that commodities prices looked overbought, historically fell during recessions, and in recent years had been strongly influenced by emerging market demand, which looked vulnerable to a US slowdown. These observations have proven out much sooner than we anticipated. Commodities continued their fall today. From Bloomberg; Gold headed for its biggest weekly drop […]
Read more...The market had taken some comfort from Lehman’s and Goldman’s first quarter better-than-expected results; these will likely be undone by the surprise warning by Credit Suisse, which heretofore had looked comparatively unscathed, by virtue of remaining profitable. That was undone today when the Swiss bank announced it expected to lose money this quarter. What is […]
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