The report Tuesday of worsening conditions in the auto market has led to a deepening of gloom on the employment front. Many private sector forecasters now expect workplace conditions to weaken well into 2009. In fact, these forecast might prove to be optimistic. Housing will probably not bottom before 2010 at the earliest, and given […]
Read more...The weakening UK housing market was revealed to be in even worse shape than feared. Prices fell 0.9% in June on top of a record 2.5% fall in May. That puts the British market down a mere 6.3% year to year, which sounds tame compared to the US, until you factor in that UK consumers […]
Read more...Moody’s is dismissing its structured finance chief, Noel Kirnon, for lapses in ratings of constant proportional debt obligations. Bloomberg notes that $4 billion of these instruments were rates AAA, and some fell in value by as much as 90%. This move nevertheless seems odd. True, this was a very large value destroying event in percentage […]
Read more...A workmanlike piece in the Financial Times, “A re-emerging market?” by Gillian Tett, Aline Van Duyn and Paul Davies gives a cautiously optimistic outlook for the revival of the securitization market. However, it’s a bit disappointing that the article skips over a couple of key elements. The first is that the explosive growth of securitization […]
Read more...There is a useful, but in some ways disheartening article in today’s New York Times, “Deep Down, We Can’t Fool Even Ourselves” by John Tierney. It’s about how slippery our standards for fairness are. Some key sections: In voting against the Bush tax cut in 2001, Senator John McCain said he “cannot in good conscience […]
Read more...Um, hasn’t anyone heard of the saying, “The customer is always right”? Apparently not, at least if you are a fund manager. The Wall Street Journal in “Credit Woes Lead Investors to Simplicity,” reports on a KPMG/Economist Intelligence Unit survey of investors carried out in March and April. Having gone to read the report itself, […]
Read more...The greybeards are not only chastened by the state of the economy, but as the example of Eli Broad illustrates, they are speaking up about it. That’s telling, because there is an unspoken rule in American business to stay upbeat, lest you unnecessarily scare investors and consumers who supposedly aren’t sophisticated enough to handle bad […]
Read more...Drunken Swede tries to row home – from Denmark BBC Watermelon may have Viagra-effect PhysOrg. I am not making this up Lehman up after Morgan Stanley’s overweight rating Reuters. I am not making this up either (hat tip reader Dwight) U.S. Won’t Let Iran Shut Strait of Hormuz, Fleet Says Bloomberg. Am I missing something […]
Read more...Lehman’s days are looking numbered as the crisis of confidence continues, measured both in its stock and credit default swaps prices. The reason is simple: Lehman, despite its protestations otherwise, needed either to shrink its balance sheet more or raise more equity. Despite its claims that its $28 dollar stock sale was oversubscribed, we heard […]
Read more...The old saying is that the cure for high prices is high prices. In the case of commodities, high prices reduce demand and also lead to efforts to expand supply. That has happened with wheat, which witnessed a sharp price decline today as it was revealed that US farmers had increased their wheat acreage. Experts […]
Read more...The newly-released annual report of the Bank of International Settlements sounds as if it is unusually lively reading. Most official documents strive for an anodyne tone, while this one appears to be unusually blunt. However, while some reporters have their hands on it, the report is not yet up on the BIS website, so those […]
Read more...Last week, we had put up a perplexed post, wondering out loud as to why some prominent Democratic senators (Charles Schumer, John Kerry, and Claire McCaskill) were calling to block contracts being signed between oil companies and the Iraq government. Narrowly, these deals would help get the faltering country back on its feet economically, both […]
Read more...Florida biologist saves drowning bear Telegraph Preparing the Battlefield Seymour Hersh, The New Yorker. This is a MUST read (hat tip reader Vijay). Inflation, oil help bears get firmer grip LiveMint. An update on the Indian stock market (hat tip reader Saboor) Hoarding Nations Drive Food Costs Ever Higher New York Times Currency Volatility Falls […]
Read more...Consumer sentiment in the UK is pretty much on the same low footing as in the US. Our consumer sentiment hit the lowest level since May 1980. But the UK housing recession started after ours. Does that mean the Brits face up to reality faster than we do, or could their economy be on a […]
Read more...Larry Summer’s latest comment at the Financial Times, “What we can do in this dangerous moment.” is troubling both for its analysis of our economic mess and its remedies. Start with his first paragraph: It is quite possible that we are now at the most dangerous moment since the American financial crisis began last August. […]
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