Tonight brings some useful commentary on the prospects and possible remedies for the banking industry. Roger Ehrenberg offers a good overview, highlighting an area that hasn’t gotten the attention it deserves, namely, proposals to change the Bank Holding Company Act to attract more investors. Reader Steve sent an e-mail that relates to some of the […]
Read more...Alan Blinder in today’s New York Times, argues for an ostensible stimulus package (hey, since more stimulus packages are probably in the offing, better register your preferences early) that will help the environment. But what I like about it is that it would cost so little that it barely rates in the “let’s goose the […]
Read more...Unexpected fall in puffin numbers BBC Girls = Boys at Math Science Weight Drives the Young to Adult Pills, Data Says New York Times Alibaba’s Jack Ma Predicts Hard Times Ahead The China Vortex (hat tip reader Michael) All Economic Analysis is Counterfactual Tom Bozzo, Angry Bear If a Bailed Out Homeowner Gets Foreclosed a […]
Read more...The New York Times reports that New York city and state officials are worried about revenue losses due to pay cuts in the financial services industry, which they expect to be worse that the dotbomb/post 9/11 cutbacks. Frankly, that downturn was mild compared to 1990-1991, the early 1980s, or the particularly nasty 1973-1975 contraction. From […]
Read more...Boy, what is the FDIC going to do come the fall? A summer Friday night is the perfect time to take over a bank, but the same action even on a Friday night in September will be noticed by a larger number of people. From a practical standpoint, this is really one bank failure, since […]
Read more...The UK’s GDP is a direct casualty of its housing slump. From the Telegraph: The Office for National Statistics reported that Britain’s gross domestic product grew by only 0.2pc in the second quarter – the slowest quarterly growth for three years… They also warned that the figures showed that although strong growth in April helped […]
Read more...Research by an IMF economist concludes that US residential real estate was overvalued by 14% as of the first quarter of 2008. The paper seeks to define an equilibrium price and also anticipates that the housing market will fall markedly below that level. From Reuters (hat tip Michael Panzner): The downward spiral of U.S. housing […]
Read more...The possible downgrade of Fannie’s and Freddie’s subordinated debt involves only a small amount of the GSEs’ total debt, but the symbolism is more important than the dollar amounts. It validates some of the critics’ worries about Fannie and Freddie but also signals the possibility that not only shareowners could be wiped out, but even […]
Read more...When commentators as diverse as Willem Buiter, Marc Faber, and Joseph Stiglitz (to name a few) agree on something, whatever their shared opinion is probably merits consideration. In this case, it’s a cause near and dear to most readers’ hearts, namely, that the rescue efforts orchestrated by the officialdom are poorly designed. They treat taxpayers […]
Read more...The text that accompanies the slides from a July JP Morgan report in its Hands-On China series by Michael Goettti (hat tip reader Michael) notes that it you asked most people how quickly Chinese food consumption was growing, most people would peg it in the 7% to 10% growth range, paralleling GDP growth. This is […]
Read more...Griping Online? Comcast Hears You and Talks Back New York Times Economists’ new research shows positive effects of minimum-wage increases PhysOrg A Turkish theater for World War III Chan Akyam, Asia Times. I have no idea how likely the author’s scenario is, but the piece does suggest, if nothing else, that Turkey is going to […]
Read more...JP Morgan looks again to be at the center of a plan to resolve, as one might put it politely, a troubled financial institution, in this case, the UK’s largest mortgage lender, HBOS. However, aside from the fact JP Morgan’s initiative, if successful, would represent the end of HBOS, the parallels to Bear Stearns diminish […]
Read more...Bond maven Bill Gross has raised his estimate of losses from the credit crunch to $1 trillion. One has to note that his firm is a large holder of Freddie and Fannie debt and he issued this pronouncement the day after the GSE rescue bill passed the House and looks certain to become law. Note […]
Read more...The latest housing news is not pretty. The decline, however, was only slightly below the expected annualized level of 4.94 million units. From Bloomberg: Sales of previously owned U.S. homes fell in June to the lowest level in a decade, signaling tumbling real-estate prices and consumer confidence are hurting demand. Resales dropped 2.6 percent to […]
Read more...Dolphin call tells calf who’s mum BBC Fannie Mae Unsold $5 Billion Homes Bring Peril to Shareholders Bloomberg Why Is the Government Guaranteeing Fannie and Freddie’s Stock Price? Dean Baker Debtors Win Victories Against Mortgage Servicers Katie Porter, Credit Slips Antidote du jour:
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