While the New York Times gives plenty of caveats, its story,”Economy Fitful, Americans Start to Pay as They Go,” says the American love affair with debt has gone sour: But now the freewheeling days of credit and risk may have run their course — at least for a while and perhaps much longer — as […]
Read more...Constitutional law and Padilla rdan, Angry Bear Wal-Mart Ignores Widow’s Letter Asking Why It Took Employees 9 Hours To Find Her Husband’s Body In A Bathroom Stall Huffington Post Great firewall of China faces online rebels International Herald Tribune How risky are uninsured bank deposits? MarketWatch. A sign of the times. Bubble Economy Endgame Mish’s […]
Read more...Fitch was warning of lax lending practices in commercial real estate in the US starting in April of last year. The typical pattern, of going from unduly generous terms to stringent ones, with nary a stop in between, is occurring now, and with a vengeance. By happenstance, I had dinner with a colleague whose family […]
Read more...This story, reporting on work by an international group published in the Proceedings of the National Academy of Sciences, warned that human induced change could push the climate to certain tipping point as early as the current century. This research is getting little coverage in the US. According to a search in Google News, it […]
Read more...The refusal of private equity firms to join in the salvage of bond insurers being orchestrated by New York state insurance superintendent Eric Dinallo comes as no surprise. In fact, it is shocking that this idea was ever regarded as a serious possibility. Nevertheless, the headline in the Financial Times reads, “Setback for monoline rescue.” […]
Read more...Perhaps my memory is failing me, but the insistence by three major Wall Street firms, that utilities prove that their new coal-fired plants are economically viable, is at a minimum highly unusual (I’d say unprecedented). Normal Wall Street practice is simply “disclose and sell.” Under securities laws, if the issuer presents its financial situation and […]
Read more...The Financial Times reports that selling group discipline broke down on a $14 billion loan syndication for the acquisition of Harrah’s by Apollo Group and Texas Pacific Group. Buyers are unresponsive, a big problem for Wall Street, which is sitting on $150 billion of inventory that is already considerably underwater. Ironically, the interest rate cut […]
Read more...The Minsky Moment John Cassidy, The New Yorker (hat tip reader Doug) Did Life Evolve in Ice? Discovery Magazine The US subprime mortgage crisis: A credit boom gone bad? VoxEU. Three IMF economists have analyzed the data, and our suspicioun are officially borne out. Huckabee Asks Jesus to Stimulate Economy Andy Borowitz, Huffington Post
Read more...Sunday’s Washington Post has a long article on Japan, “For Japan, a Long, Slow Slide,” that is truly odd. Mind you, on the surface, there is nothing wrong with it. It makes the usual observations: Japan’s population is aging, productivity is falling, the country is losing its economic standing. It give the impression that Japan […]
Read more...Long term, the dollar is not a good bet unless the US increases its savings rate and reduces its current account deficit considerably. Monetary easing and fiscal stimulus only exacerbate the problem. But never forget the Wall Street saying, “Don’t fight the tape.” From Bloomberg: Ben S. Bernanke’s decision to lower interest rates 1.25 percentage […]
Read more...This article from Project Syndicate (hat tip Mark Thoma) is a report from Davos by Nobel Prize winner Joesph Stiglitz on the considerable skepticism abroad toward US financial and business practice, particularly our faith in deregulation. It is a telling indicator of how rapidly the world is changing, yet many in the US are still […]
Read more...We have been skeptical about the possibility of a private-sector rescue of the troubled bond insurers. Nevertheless, both the Wall Street Journal and the Financial Times reported progress on discussions to shore up Ambac, the number two insurer, and that efforts were underway to assist the smaller fry. From the Financial Times: US and European […]
Read more...The Financial Times Says Bankers are Too Dumb to Breathe Dean Baker BLS Censors Birth/Death Employment Disclaimer Bernanke Panky News Cramer: “Ethanol is a fuel that doesn’t work” The Big Picture. Cramer is so often nuts that I wanted to highlight one of those rare occasions when he says something sensible. Inflation expectations are rising […]
Read more...Brad Setser has been concerned of late about the implications of China’s (and other central banks) exchange losses on their large and ever-growing holdings of US Treasuries which they buy to fund our current account deficit. Setser, a keen watcher of official data, has also noted that private foreign demand for US securities has virtually […]
Read more...Spain has been in the throes of a housing bubble that is arguably worse than ours, since housing (narrowly defined) accounts for 5% of US GDP versus 18% of Spain’s. And like the US, Spain’s mortgage banks have entered a financial crisis and are making heavy use of the ECB’s discount window. But oddly, this […]
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