Individuals and institutions are capable of considerable self-deception when faced with difficult choices. The Fed’s latest signals about what it intends to do about inflation are a classic example. Both Bloomberg and the Financial Times tell us that the central bank stands ready to raise rates quickly to ward off inflation. From Bloomberg: Federal Reserve […]
Read more...Promises, Promises from Microsoft. Again Groklaw Wall Street Bank Run David Ignatius, Washington Post. Frankly, this isn’t a very good piece, but I include it because it suggests how far behind the public at large may be in understanding our financial woes. What do the US, Saudi Arabia and China have in common? Brad Setser […]
Read more...Identical Twins Not As Identical As Believed Science News FBI Will Not Go After Borrowers Who Lied on Mortgage Applications homeguide123.com Goldman Sachs likely to cut about 1,500 jobs MarketWatch. A leading indicator that the firm is going to take some earnings hits. Boomers and the Medical System OldVet, Angry Bear It’s too late to […]
Read more...Any doubts that we are going down the Japan path of trying to shore up inflated asset value rather than letting the market find the right level, should now be over. Bloomberg tells us that the Office of Thrift Supervision is looking into a plan that will enable homeowners to refinance houses that have negative […]
Read more...Full disclosure: I am no fan of the Wall Street Journal’s editorials: in fact, I’ve commented on the liberties they often take with facts. But when they are on a pet peeve, they can become so overwrought that the level of agitation alone is amusing. And just because they are often wrong doesn’t mean they […]
Read more...Apologies for the high concentration of monoline items tonight, but that’s where the meatiest material is right now. I received a surprising e-mail from an investor on a rumor he heard from a well-placed source. He was a bit incredulous as to what he was told, and I am skeptical too. Nevertheless, I thought it […]
Read more...It is truly amazing how disconnected credit instruments are from other tradeable financial investments. The Fed released the minutes from its latest Open Market Committee meeting, which lowered the growth forecast and increased the inflation forecast. That shouldn’t be cheery at all; the stagflationary 1970s were a terrible time for equity valuations, but the US […]
Read more...A good article “Markets assess the costs of a monoline meltdown,” by Aline Van Duyn and Gillian Tett of the Financial Times, endeavors to put the bond insurance crisis in context. While some of this will be familiar grounds to readers, the piece does a nice job of putting together some key data. The article […]
Read more...Rare cooperation to save gorillas BBC Disinformation flies as US raises Iran bar Asia Times. The article is a bit shrill, but does explain in some detail how the US is muddying the waters before the IAEA has released its report. Biggest brain drain from UK in 50 years Telegraph Why Couldn’t Medicare Negotiate the […]
Read more...As reported by Bloomberg, Bill Ackman of Pershing Square weighted in with his own breakup proposal today. Details there were sketchy, but a reader sent me a pdf of Ackman’s PowerPoint presentation. One slide points out something we have been saying: Berkshire Hathaway’s proposal would require a payment over and above the premiums paid by […]
Read more...Standard Chartered abandoned plans to support its SIV, which is already in receivership. It is likely to default on its February 15 payment (it has three business days to cure the default). While this development is not expected to hurt either the bank or the marketplace, it’s another indicator that some institutions are less concerned […]
Read more...Two pieces today in the Financial Times address the striking disparity in sentiment and prevailing valuations between the credit and equity markets. Debt market investors are (for the most part) acting as if the floor might collapse beneath them, while equity investors are talking as if the downturn is coming to an end. And interestingly, […]
Read more...This post by Christian Weller at Credit Slips, takes a different viewpoint than, say, that of those in the Nouriel Roubini camp who see an apocalyptic meltdown as possible, and a mere severe recession as possible. Weller instead argues for a scenario more like that of Japan: a grinding period of low growth, falling real […]
Read more...Friendship is not yet an endangered species, but it is on the wane. Studies in the US and France both found that people are spending less time with friends, neighbors, and relatives. The amount of hours worked, not surprisingly, seems to have to do something with this pattern, since a reduction in the workweek in […]
Read more...Martin Wolf of the Financial Times turns over today’s comment to uberbear Nouriel Roubini, who looks more and more prescient with every passing day. Wolf summarizes two recent Roubini offerings, one on the twelves steps of a financial meltdown, the second on why the powers that be are unlikely to pull themselves out of it. […]
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