What a difference six months makes. When we questioned the thesis that the oil price runup earlier in the year was due solely to supply and demand, we got a fair number of hostile comments (see here and here for some of many examples). And now the view that oil will keep falling has also […]
Read more...The people I know in IT (even though they are in New York. they are doing bleeding-edge work) all professed that they were not affected by the stomach-churning market gyrations of the last six weeks: clients were moving ahead with projects underway, prospects still were keen to meet, contracts were being signed. However, if you […]
Read more...What is remarkable about this forecast for deflation is that, unlike the US, which just posted flat consumer prices in September, the UK’s recent inflation reports have still been in strong positive territory. Just as its housing market went into a sudden downdraft, Britain’s retail prices are projected to go sharply into reverse. From the […]
Read more...The collapse in the Baltic Dry Index continues. As we have noted before, the inability of cargo shippers to secure letters of credit (and the unwillingness of banks to accept L/Cs from other banks) is play a significant role in the plunge in trade transport. From the Financial Times: The cost of shipping bulk commodities […]
Read more...The Labor Department reported today that the consumer price index was unchanged in September and that core CPI (excluding food and energy) fell 0.1%. The markets may take some cheer from the marked reversal in inflationary pressures, but the flip side is that the change points to deflationary forces starting to take hold. From the […]
Read more...The bloodbath continues, largely in reaction to the bad economic news reports in the US . From Bloomberg: Asian stocks tumbled, driving Japan’s Nikkei 225 Stock Average down as much as 10 percent, as concern deepened that the global economy is headed for a recession after U.S. retail sales fell…. “Investors are still pricing in […]
Read more...Boy, that was short lived. The massive EU and US rescue efforts to pump equity into banks, the TARP, the increase in the Term Auction Facility (from $150 billion to $900 billion), the Fed offering unlimited dollar swaps to foreign central banks, and those monetary authorities themselves engaging in liquidity operations, appears to have come […]
Read more...George Magnus, a strategist for UBS, was one of the early popularizers of Hyman Minsky and was similarly one of the lonely few to worry about the financial and economic fallout of dealing with unsustainable levels of debt. His comment in today’s Financial Times, “Is there time to avert a Minsky meltdown?” is cautiously optimistic […]
Read more...Despite the aggressive action by the Fed and EU leaders over the last few days, Nouriel Roubini thinks a severe recession is still in the cards and worries that the financial system is not out of the woods either. From his latest report (hat tip reader Dwight, boldface ours): At this stage central banks that […]
Read more...Now that the world is in the throes of the mother of all financial messes, economists are scrambling to develop expertise. Carmine Reinhart and Kenneth Rogoff recently had this beat largely to themselves. but in the last two weeks, the IMF came out with a stud of 124 modern banking crises. The latest addition to […]
Read more...I must confess a certain fondness for the apocalyptic sort of financial writer, provided they don’t lose anchoring with reality and fall into the tinfoil hat category. Nouriel Roubini is the case example of an economist who favors a baroque, melodramatic style, and despite sounding more than a tad unhinged at points, he has proven […]
Read more...This report from the New York Times is largely anecdotal but not surprising: In response to the falling value of their homes and high gasoline prices, Americans have become more frugal all year. But in recent weeks, as the financial crisis reverberated from Wall Street to Washington, consumers appear to have cut back sharply. Even […]
Read more...We have a certain fondness for Marc Faber: he knows financial history, he is refreshingly direct, not attached to conventional thinking, and has a record of generally good investment calls (and admits to his mistakes). Reader Dean provided us his latest newsletter, plus a story covering recent interviews (no, Dean is not his PR agent, […]
Read more...Conventional wisdom has been that Treasuries have been the yet another bubble as cash exited equities and other risky investments, first feeding a commodities spike, then seeking a better home in Treasuries. But Merrill’s David Rosenberg, who was in a decided minority in seeing deflation as the likely outcome for the US (he has for […]
Read more...Krugman’s post is here, with an acknowledgment that we also possess nukes. We’ve been on that theme a while. A few examples: America: Banana Republic Watch May 6, 2007 End of Dollar Hegemony Coming? May 22, 2007 “We may just have started to feel the pain” March 6, 2008 A secondary theme: Tthe US is […]
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