I don’t believe in market calls, and trying to time turns is a perilous game. But most savvy people I know have been skeptical of this rally, beyond the initial strong bounce off the bottom. It has not had the characteristics of a bull market. Volumes have been underwhelming, no new leadership group has emerged, […]
Read more...Submitted by Edward Harrison of Credit Writedowns. It has been my thesis for some time that we are seeing a secular change in consumption patterns in the United States. This will have grave implications for a world economy used to seeing the American consumer as an economic growth engine and consumer of first choice. Retail […]
Read more...Frank Veneroso was kind enough to write as a result of seeing a guest post “Debtor’s Revolt?” by his colleague Marshall Auerback. Veneroso also provided his latest newsletter and gave us permission to post it. It it pretty long (12 pages), I extracted the executive summary and other key bits. Be sure to read the […]
Read more...Ambrose Evans-Pritchard has a good piece up at the Telegraph on an issue that appears not to have gotten the attention it merits, namely, the level of underutlization of capacity and the risk it poses to anything dimly resembling recovery. Evans-Pritchard brings up a related topic, that deflation is a bigger issue that most commentators […]
Read more...It was conventional wisdom in the US and UK financial press that Europe was dong a hopelessly bad job of responding to the economic downturn, that it needed to do vastly more in the way of fiscal stimulus, that it was consigning its citizens to continued recession, and the Te Germans in particular were to […]
Read more...As the economy limps along, with jobs still falling (despite keen efforts to call a turn, and with the figures a bit more dodgy if you look under the hood), more and more overindebted and underemployed citizens are out on the street. Reports of tent encampments or parking lots with cars that serve as shelter […]
Read more...Japan may be on the verge of some major shifts, The fact that what amounts to one-party rule in Japan appears at an end ought to be significant, but the proof will be in the pudding. The island nation has been ruled by the Liberal Democratic Party for virtually the entire postwar period, with politics […]
Read more...We’ve been seeing an even higher than usual amount of skepticism on China’s official data releases, as if such a thing were even possible, given the general dim view of Chinese government data. Some observers, including yours truly, had looked to electrical usage as a better barometer of economic activity. Well, it turns out that […]
Read more...Submitted by Edward Harrison of Credit Writedowns If you recall, at the end of May, I wrote a post “Both initial claims and continuing claims now pointing to recovery” that said jobless claims data were pointing to an imminent recovery. The general gist of my argument was recovery would come by year’s end or early […]
Read more...It was mathematician Benoit Mandelbrot who first discovered in 1962, by crunching 100 years of cotton trading data, that markets have “fat tails” or more extreme risks than the standard models predict. A less oft cited finding of Mandelbrot’s was that markets have memory, in colloquial terms. Calm days tend to be followed by calm […]
Read more...Even though China keeps putting out cheery official numbers, its purchases of commodities are down, suggesting there is less to its stabilization than meets the eye. It’s early to say that this is conclusive, but there is a good bit of other anecdotal information and some firmer information raising questions about the true state of […]
Read more...Comstock Partners has a new newsletter out, and it makes a cogent case that there is no pretty way out of our over-leveraged mess. The disheartening bit is not only the narrative but a series of charts. One, on debt to GDP, show that it has risen in the last year (debt was roughly $49 […]
Read more...If you think US economic data leaves a lot to be desired, just remember that it looks stellar in comparison to what comes out of China. The latest China fun facts versus relentlessly upbeat official figures roundup comes with the help of reader Michael. First is that China has been reporting decent growth, with the […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Below is a post I penned earlier this week about double dip recessions. The Volcker Whip-inflation-now induced double dip in 1980-1982 is the best precedent for today. What could tip us into a secondary relapse? A lot of things: commodity prices, oil, higher interest rates, commercial real estate, […]
Read more...Gideon Rachman has a pretty gloomy piece in the Financial Times on the lousy state of affairs in the Baltics. Short story, like a lot of places, they went on a monster debt bender and now have an awful hangover. Rachman suggests that Baltic woes could blow back and hurt Europe’s recovery. The trigger would […]
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