A story in the New York Times warns, “Some Fear Commercial Property Loans Will Be Next Stage in Downturn.” This is news? I’m in a lazy mood, so I will merely search old posts. Fitch warned in April 2007 (yes, the year is no typo) of the lousy quality of commercial real estate loans and […]
Read more...This cheery update came via reader Michael. Note the Goldman report, which says half the world is in or close to being in contraction mode, includes the US in that camp. Further note that the “two quarters of negative growth” is not a hard and fast rule; the NBER, which is in charge of making […]
Read more...Stories by Bloomberg and Reuters on a talk by Kenneth Rogoff, former chief economist for the IMF and currently a Harvard professor, fail to mention perhaps his most relevant credential as far as opining on the US credit crunch is concerned. He and Carmen Reinhart of the University of Maryland have done an extensive study […]
Read more...We had written in mid July that money supply in the US, as measured by M1 and M2, had been contracting for several month s . Eurozone M1 growth had also fallen to near zero growth levels, and M4, the broadest measure of money in the UK, had actually dipped into negative growth territory. As […]
Read more...Despite the resurgence of the dollar, Ambrose Evans-Pritchard remains unconvinced that things in the US are now as rosy as the new found (albeit guarded) optimism suggests. He comes by his view without disputing the view that the dollar rally has legs. I’m not very optimistic about that. Why? A drinking buddy with amazing connections […]
Read more...Reader Saboor was kind enough to send me an August 1 report by Stephen Roach, former chief economist of Morgan Stanley, now chairman of its Asian operations. It’s noteworthy in two respects. First, although Roach remains a long-term dollar bear, he made a well timed call that it was oversold, due for a rally, and […]
Read more...Two very good posts I suggest you read immediately: one by Michael Shedlock, “Implications of the Slowing Global Economy” which at its close makes the case for deflation, and a rebuttal from Steve Waldman, “Why Inflation“. Both are thoughtful, and as much as Waldman has the stronger argument, I suspect he will not be proven […]
Read more...This post is by Jim Fitch of Some Assembly Required. Americans want cheap fuel, no matter what it costs. Sign Here: JPMorgan, Citigroup, Morgan Stanley. The Usual Suspects. Now they want to take over all the pension funds. With Uncle Sam’s help, blessing, and taxpayer backing. Sort of a consolation prize for not getting their […]
Read more...This is far from the first time that initially positive GDP readings were later revised into negative territory. Fourth quarter growth, initially posted at 0.6% of GDP, was revised down to -0.25 today and first quarter to 0.9% from 1.0%. But what appears to have gotten the market’s attention was that the rebate checks had […]
Read more...Something’s in the air…news of recession everywhere. Or so it seems this evening. First, readers Michael and Scott sent us Jeremy Grantham’s latest newsletter. Grantham is known as a perma-bear, and his call that a major bank would fail in the next five years (this about two years ago) was seen as a symptom that […]
Read more...The proportion of Americans designated as “involuntary part-time” hit a record high. This development would seem to undercut the unexpectedly upbeat news from the ADP payroll report earlier this week, that an unexpected 9,000 jobs had been added. Some experts warn that these reductions in work hours are a precursor to workforce reductions. From the […]
Read more...Readers may know I am a big fan of Kenneth Rogoff and Carmen Reinhart, his frequent research partner and co-author. One of my reasons is that he is much more empirically-oriented than most Serious Economists. One recent bit of Reinhart/Rogoff research that has gotten some attention (but in my mind, still not enough) is their […]
Read more...If Starbucks, which sells an addictive staple at an only somewhat upmarket price point, is having to retrench, it’s a no-brainer that other consumer discretionary spending is taking an even bigger hit. But to date, the results are mixed. Movies, which in many places don’t require much driving, are holding up well. And they did […]
Read more...It no doubt seems absurd to question the idea that deleveraging in underway. We’ve had three heroic central bank interventions, starting in August 2007, to reverse seize-ups in the money markets. The asset backed commercial paper market has been almost in run-off mode. Leveraged buyout loans have been scarce to non-existent. Banks have cut home […]
Read more...There have been quite a few anecdotes about a new tough-mindedness among banks, and it is finally showing up in the data. From the New York Times: Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral — collectively dropped almost 3 […]
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