Conventional wisdom is that the plunge in commodities was due in part to the deflating of a speculative bubble, the balance the result of the nasty contraction now in full force. Once things recover, basic materials should enjoy a strong rebound as China and other emerging markets get back on the growth path. Comparisons to […]
Read more...On the Street, Disbelief and Resignation Wall Street Journal Science paves way for climate lawsuits Guardian BIS warns of collapse in global lending Telegraph Post-Lehman company defaults to soar Financial Times Comparing recessions Jim Hamilton A Reason to Sell Stocks Amid the Rally David Merkel. Merkel is a hard core equity type, and so not […]
Read more...By way of background, we posted this on November 27: How can you give cash compensation to an executive, yet claim it is not a salary or bonus? You call it a “retention bonus,” No, I am not making this up. Note that AIG chose to make this disclosure the day before Thanksgiving, selecting a […]
Read more...As credit default swaps have come in and out of focus over the last year, I have been struck by the assumption that this product would of course continue to exist. I have trouble seeing their legitimate uses. In theory, they could allow banks to diversify and hedge credit risks better, but once risks rise […]
Read more...Further signs that the Chinese economy is in the throes of a serious downturn. From Bloomberg: China’s exports shrank last month and industrial-production growth cooled, Fan Gang, an adviser to the People’s Bank of China, said today. “Things are not so good,” Fan said at a forum in Beijing. “November figures will come out soon, […]
Read more...One of the most pervasive findings in social science, although it is seldom codified this way, is how suggestible people are. Numerous studies in behavioral economics have found that the same underlying bet elicits very different take-up rates when framed as a wager versus as insurance. Even worse, humans are susceptible to obviously exogenous influence. […]
Read more...The Nikkei and Topix are marginally in positive territory as of this writing (the Nikkei up a bare five points) retracing earlier gains. The proximate cause appears to be a downbeat revised GDP report. Stocks initially appeared to shrug off the bad news, taking momentum from the Euro/US rally, but upon reflection, have (for the […]
Read more...Financial crisis hits horse breeders Financial Times Gorilla states in poaching pledge BBC The hottest recessionary activity in town Lucy Kellaway, Financial Times. Even though demand is up, I still suspect the number of trades is down, since money tends to lubricate this sort of activity. Euro Dreams Fade for Zloty, Forint, Koruna as Currencies […]
Read more...Be careful what you wish for. Even a successful auto industry restructuring will involve substantial headcount cuts, deepening the recession underway. A Bloomberg story tallies the likely damage; While the loans may spare General Motors Corp., Ford Motor Co. and Chrysler LLC from collapse, shrinking their workforces would sap an already weak economy, said Paul […]
Read more...The stock market is staging a very peppy rally on the hopes for the Obama infrastructure plan and the auto bailout, but key bits of news point to the stubbornness of some of the underlying economic stresses. We have long advocated mortgage modifications as a remedy that banks used fairly freely in the stone ages […]
Read more...Yet another credit crunch casualty: venture capital firms, and potentially, their portfolio companies. The Wall Street Journal reports that VCs are seeing an increasing number of rebuffs, some borne of necessity, when they hit up their limited partners for dough (reader note: investors in private equity and venture capital funds do not remit the full […]
Read more...In the geeky but important category, the California legislature attempted but failed to pass a budget that included a provision that effectively repudiated the recent Treasury directive to eliminate the limitation on acquiring banks’ ability to use the net operating losses of acquired banks. That rule change was widely described as instrumental in the catfight […]
Read more...Nice piece, “Inside the Influential World of Econobloggers,” by Steve Miln which got prominent placement in the Boston Globe Sunday Ideas section. A good piece generally, with one minor frustration: one of our posts was mentioned by title in the third paragraph, without indicating the source (the first mention of NC didn’t occur until the […]
Read more...Harbour seals’ decline ‘alarming’ BBC Deflation virus is moving the policy test beyond the 1930s extremes Ambrose Evans-Pritchard, Telegraph US Regime Uncertainly, 1937 and 2008 Mies Economics Blog. Overeggs the pudding, but an interesting notion nevertheless. Detroit Bailout Talks Slow Over ‘Czar’ Role Wall Street Journal. Funny, no one worried about such niceties for banks. […]
Read more...Folks, am just back from a quick turnaround trip to Vienna, which was educational and enjoyable (although I did not have the time to see a Van Gogh exhibition at the Albertina which reportedly has a large number of rarely-exhibited top quality works). Am on the verge of doing a face plant, so forgive me […]
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