As readers well know, we think the depth of the credit crisis means that the economy will be in low-to-negative growth territory for some time, but we did not want to deny you other points of view. And a positive reading from the credit markets is rare indeed. From Bloomberg: Before you can say “Barack […]
Read more...It’s sad to watch America operate in the illusion that it can exercise much influence over the trajectory of its decline. Mind you, that slippage isn’t inevitable if we were willing to course correct and endure an unpleasant period of low to negative growth as we lowered consumption and increased savings. But since that program […]
Read more...Is Microsoft Office Adware? Open Office Org Ninja ‘Headwind’ Blows as CEOs Navigate Trouble Wall Street Journal. On the sudden popularity of nautical metaphors among corporate chieftans. Fitting, since the line of work with the highest mortality rate is commercial fishing. Obligatory Nonsense on Inequality at the NYT Dean Baker To Republicans: Conservatism Has Failed. […]
Read more...The G7 forecast that subprime damage could total $400 billion is hardly surprising to anyone who has been following that sorryhttp://www2.blogger.com/img/gl.link.gif saga. Predictions that were once regarded as wildly pessimistic have been borne out as correct. What is noteworthy about the G7 remarks is that things have gotten so bad that there is nothing to […]
Read more...Dear reader, even if your taste runs to the practical rather than the theoretical, I strongly suggest you read this post from Thomas Palley. Like it or not, most news reporting and just about all policy discussions in the finance/economics realm are filtered through a particular frame of reference, namely, neoclassical economics. Palley points out […]
Read more...Today’s Telegraph has a good piece, “Japan is the next sub-prime flashpoint,” by Ambrose Evans-Pritchard. And before I get to the piece, I want to say a few things about the author. A number of readers detest Evans-Pritchard, and I am at a loss to understand why. He wears his biggest fault on his sleeve, […]
Read more...Jim Hansen, Climate Code Red and the Atmospheric Singularity WorldChanging. “Climate policy is characterized by the habituation of low expectations and a culture of failure. There is an urgent need to understand global warming and the tipping points for dangerous impacts that we have already crossed as a sustainability emergency, that takes us beyond the […]
Read more...This is a very well done piece, presented as a letter from the chairman of GM, that gives an overview of the fall from grace of what was once America’s premier corporation. The real source is Porter Stansberry of Stansberry & Associates Investment Research (via colleague Paul S) . The article ran last year, but […]
Read more...Don’t ask how I missed this story,, “Debt fears heighten in US and Europe,” in my early a.m. survey of the Financial Times; it’s the lead page one item in the print edition. As far as I can tell, the underlying news story, the dumping of leveraged loans at distressed prices, has not been picked […]
Read more...Clever.
Read more...A very good Project Syndicate article by Thomas Palley highlights the way a shift in US policy priorities circa the early 1980s has lead to a lasting change in the foundation of economic growth in the US. Prior to that, the emphasis was on increasing incomes of workers and being wary of trade deficits. As […]
Read more...The Wall Street Journal and Bloomberg report that the SEC is mulling regulations for rating agencies. Note that rating agencies have benefited from being a protected class, since the SEC determines who can be a Nationally Recognized Statistical Ratings Organization, yet heretofore has imposed no obligations on them. In the 1970s, the SEC set regulatory […]
Read more...Hundreds of lawyers ‘bugged on prison visits’ Telegraph Stimulus Package Will Hasten Collapse of Fannie and Freddie Dean Baker French paradox redux? U.S. vs. French on being full PhysOrg How Non-Borrowed Reserves Became a Sexy Subject Caroline Baum, Bloomberg (hat tip Felix Salmon). Baum explains that the negative non-borrowed reserves sightings are no cause for […]
Read more...In an earlier post, we had taken a worried look at the fact that banks’ net non-borrowed reserves went negative in January. We were only somewhat concerned because this unprecedented pattern was clearly the result of the Fed’s implementation of its TAF, the Term Auction Facility, which gives banks funding if they post collateral (and […]
Read more...Bloomberg reports that Bear Stearns increased its short subprime position from $600 million in November to $1 billion. The story suggests that this hedge is to offset trading positions; there is no indication that the firm is “net short” as Goldman is. For those who might think there is something wrong with this strategy, consider: […]
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