An article in Bloomberg, “Credit Swaps Thwart Fed’s Ease as Debt Costs Surge ,” focuses on a noteworthy phenomenon, but does a lousy job of explaining it. I’m posting it nevertheless in the hopes that a reader in the relevant markets might shed some light. The story tells us that corporate borrowers, even AAA ones […]
Read more...As the economy weakens, some of the authoritative media outlets are beginning to question some government statistical releases. We noted over the weekend (“Surprise! It’s Rough Out There in the Job Market“) that a New York Times seemed caught aback by weakness in the labor market. It had, like most of the media, focused on […]
Read more...We’ve long complained that you have to take a lot of the statistics put out by our government with a handful of salt, but even worse is simply deep-sixing information that makes it look bad. Outsourced to Think Progress: The U.S. economy is faltering. Family debt is on the rise, benefits are disappearing, the deficit […]
Read more...Forbes and Bloomberg discuss Labor Department statistics that show that the hours worked by the self-employed fell at a 15.5% annualized rate in the third quarter of 207, the steepest drop in 15 years. The subprime crisis may be the big culprit, since construction workers and mortgage brokers are often in the ranks of the […]
Read more...An excellent post by Elizabeth Warren at Credit Slips reviews some of the canards that have been successfully presented to promote the interests of various business interests against hapless consumers. The latest involves payday lending. The very fact that the Pentagon has come out against payday lending (they’ve proposed a usury ceiling of 36%) should […]
Read more...Today’s GDP release showed third quarter growth at 4.9%. That number was such a howler that it promptly elicited the contempt it deserved. From Barry Ritholtz, in “GDP=4.9% (also, I have a bridge for sale in Brooklyn)“ This 4.9% number is one of the more “fanciful” government releases you will see in your lifetime, (outside […]
Read more...An article in Business Week, “The Coming Consumer Crunch,” had a bit of information that was news to me. The government, that is the Bureau of Labor Statistics, includes some rather large items in consumer spending that many of us would not include: The reason is that much of what the government counts as consumer […]
Read more...I must have problems with authority. One of my forms of recreation is looking out for statistics, particularly government releases, that don’t seem to comport with reality. Fortunately, I have plenty of good company in this endeavor, including (but far from limited to) Barry Ritholtz, Michael Shedlock, Dean Baker. A frequent target is the nonfarm […]
Read more...The Financial Times notes in a story today,”Credit squeeze pushes ECB to peg rates,” that the European Central Bank refrained from its inclination to increase rates to combat increasing inflation. One has to wonder whether the failure to increase rates is out of the recognition that a hike would put more downward pressure on the […]
Read more...Pretty much everyone who reads the financial press knows that investment banks are stuck with large LBO fundings and commitments that are under water. That means that. properly accounted for, the reduction in value of these positions is a loss. Yet there are increasingly indications that the soon-to-be released third quarter earnings may not be […]
Read more...Given that it is now September, and in most communities, the residential selling season is March to October, the forecast by the National Association of Realtors, that the housing recession will continue into 2008, hardly merits the term “forecast.” It’s closer to being facts on the ground. NAR is optimistically calling for a bottom in […]
Read more...Those who have been following the job creation story weren’t surprised at the weak BLS employment (the so-called “non-farm payroll”) report today, or by the fact that it revised the results for the last three months downward by 81,000. Various commentators (see here, here, and here) have observed that the rises reported in recent months […]
Read more...Will someone, please, teach the reporters at the Wall Street Journal the basics about scientific research? I know it’s hard finding stuff to write about day in, day out. But the story “Scholars Link Success of Firms To Lives of CEOs” is a travesty. The centerpiece of the article is a study by Morten Bennedsen, […]
Read more...Below are some excerpts from a good piece by Kenneth Rogoff on the Guardian’s website, which discusses why Bernanke thinks the Fed has no business worrying about asset prices, but argues that the lousy quality of macroeconomic data means policy makers ought to consider the information embedded in market prices: A bit of intellectual history […]
Read more...BreakingViews (free subscription required) reports that the degree of deleveraging of corporate balance sheets may be exaggerated. Yet another reason to look at stocks with a wary eye. Readers may know that the level of corporate borrowings relative to their equity and total assets has fallen since 2002. For example, Standard & Poors reports that […]
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