While oil is a finite resource, focusing on the long term can blind one to near-term dynamics. There has been surprisingly little mention in the mainstream media of how large the current oil surplus is. The collective view seems to be that this will take care of itself in short order. But that may be […]
Read more...Submitted by Edward Harrison of Credit Writedowns. This post is from Niels Jensen of Absolute Return Partners. I have featured his monthly newsletter a number of times on Credit Writedowns (here’s the link to the last one, hilarious title). Jensen is very good. Visit www.arpllp.com to learn more about Absolute Return Partners and to sign […]
Read more...Dear readers, we are NOT setting out to have a Willem Buiter-fest this weekend. It’s simply that this is a slow news period and Buiter has a good post after the first video clip I’ve ever seen of him. So if there was more activity, the Buiter-density would be lower. The Anglophile Dutch economist has […]
Read more...The dour consumer sentiment readings said that the great unwashed are smarter than the financial talking heads. They had ceased to be impressed with the “green shoots” theory. Lo and behold, worse than expected employment data has proven them right. We’ve pointed out that the Carmen Reinhart/Kenneth Rogoff analysis of past severe financial crises suggests […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Of late, there have been a lot of worries about he potential for inflation in the U.S. Marc Faber is the most noted pundit in this regard. Over-the-top comments he made back in May about hyperinflation in the U.S. may have been a catalyst for all of the […]
Read more...Um, how come this story is in the Sydney Morning Herald (as of about 20 hours ago) and not the US/UK business media? This is a pretty major development. Yes, commodities heavy Australia is most affected, but Oz is hardly alone in seeing the ramifications. While the US dollar is weakening, the Australian dollar has […]
Read more...Readers may recall that it wasn’t all that long ago that China’s banks were sitting on big losses and the analysts debated how bad the mess was. In 2003, for instance, the damage was pegged at $500 billion, a stunning figure given the size of the economy, and meant the banking system was insolvent. Even […]
Read more...There are some interesting things one learns in putting together a book. Blogging is a lot like working in watercolors, speed and confidence in execution are key, versus the oil-painting medium of a book. And you learn how many times you wind up scraping the canvas and reworking. I’m up to the sixth revision of […]
Read more...Consensus forecasts had expected a modest fall in initial unemployment claims this week; instead they increased by 15,000. Similarly, continuing claims rose by 29,000. Bloomberg still tried to put a happy face on this not-aligned-green-shoots story. This was the third and longest paragraph of a mere four paragraph report: Recent economic data shows some areas […]
Read more...Wow, the credit loss numbers keep getting worse and worse. And although a lot of observers like to attribute banks slashing credit lines and jacking up rates to pending pro-consumer rule changes, the more obvious culprit is their hemorrhaging portfolios. Banks tend to close the credit gate after the horse is in the next county, […]
Read more...Just as one man’s terrorist is another’s freedom fighter, so to is a return to prudent lending practices now leading to “unintended consequences”, namely fewer loans being extended. The post-bubble spin-mongering continues. New lending standards now mandated by Freddie and Fannie as a result of a settlement between New York State and the mortgage giants […]
Read more...Japan once had robust exports and a de facto two-tier economy. Yet the image of the dreadful domestic economy dominated as Japan has been characterized as having a lost nearly two decades. I’ve long harbored the suspicion that Japan played up the stagnant domestic economy so no one would bust its chops over its booming […]
Read more...Michael Pettis put up a long and useful post on the options open to China given a decline in US consumption and therefore its trade deficit, both of which he deems to be inevitable. Pettis argues that all things being equal, growth in China would probably be lower than most assume, 5%-6%. Note that while […]
Read more...What is going on? We noted on June 12 that the World Bank has lowered its growth forecast for 2009 from a negative 1.7% to close to negative 3%. World Bank Group President announced this prior to the G8 meeting and stressed the global contraction would have particularly grim consequences for poor countries. Today we […]
Read more...Andy Xie, writing for Cajing, questions the durability of China’s recovery. He argues that much of hte upsurge in lending, which was one of the developments that cheered commentators, is fueling asset speculation, in this case in commodities, Reports this spring has suggested that as much as a third of the new lending was going […]
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