The Fed has a mess on its hands. Yields on ten and thirty year Treasuries have shot up in the last few days as investors have become fixated on burgeoning Treasury supply in coming months and years. and, as belief in the “green shoots” story is rising, a shift to riskier assets. In addition, while […]
Read more...One of our oft repeated pet peeves has been that the effect of a bankruptcy filing on buyer appetite had not been assessed in the Chrysler or GM bankruptcy plans. We had argued it was vital to get a handle on it, since it would affect how much financing would be required in court and […]
Read more...Uncharacteristically for an economist, Wolfgang Munchau questions the conventional remedy for the debt millstone: use inflation to trash its value in real terms. Bondholders so often get shafted that it’s a predictable outcome. But is it wise? Munchau argues that regardless, the piper must be paid. If the powers that be succeed in creating meaningful […]
Read more...In 2007, Dean Baker proposed an idea he called “own to rent“, in which homeowners facing foreclosure would be given the option of staying in their home indefinitely, provided they paid market rent. The notion was that stressed families would be spared the cost and disruption of moving if they were indeed viable renters (a […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns. A recent post I published on both Credit Writedowns and Naked Capitalism, “Both initial claims and continuing claims now pointing to recovery,” has left the impression that I am a wild-eyed bull – for which I have been duly smacked about the head. This is far […]
Read more...Having seen what Cerberus has done to one of its acquirees (New Page, a group of mills that produce coated paper), nothing should surprise me. But the way that Chrysler treated its dealers as stuffees, pressuring them take extra inventory and make extra investments in plant and facilities shortly before the dealerships were cancelled, is […]
Read more...Even though it is risky to be skeptical when at a remove, we had trouble buying into the bullish talk on China. First, in the Great Depression, it was the creditor/exporter America that had a far more difficult adjustment than the wastrel debtors, who simply defaulted. Second, the stimulus package, which has been widely touted, […]
Read more...You have to give former Fed chairman Alan Greenspan credit for having no shame. Well, he did once look a bit rattled before Congress for about five minutes and ‘fessed up it never occurred to him that people would be so greedy as to pull so much cash out of companies so as to leave […]
Read more...The only bit of cheer coming out of Japan’s dreadful economic report is that the first quarter decline in GDP of 15.2% annualized, the worst every recorded, was slightly less awful than expected. The forecasters surveyed by Bloomberg expected a fall of 16.1%. However, the fourth quarter contraction was revised upwards from 13.2% to 14.1%. […]
Read more...Readers are probably well aware that Chrysler and GM have started the process of closing dealerships. Chrysler is shedding 789 of its 3200 dealers, and GM is excising 2600 of its 6246, with 1100 notified last week. UBS estimates that the total job losses could reach 160,000, although some dealers may be able to operate […]
Read more...Reader Harry H tells us that, at least in Vermont, shovel-ready projects aren’t as ready to go as the very nature of the term would suggest. The Wall Street Journal described some reasons for delay back in March: It turns out, though, that shovel-readiness is in the eye of the beholder. Soon after his visit, […]
Read more...This post is from reader Gonzalo Lira. Although I beg to differ with him on a couple of his observations, it’s certainly colorful and thought provoking. I give my quibbles at the end. Insofar as this burgeoning Millennial Depression goes, I’ve noticed there are two sorts of people: Ones such as myself, obsessively following every […]
Read more...Despite quite a few warnings, the stock market rally continues to grind upwards. Although past is not always prologue, this upswing has not featured a new leadership group, as enduring bull markets normally do, nor has it reached the crushing valuation lows (PEs of 5-8 versus roughly 11 in early March), Moreover, despite the mythology […]
Read more...Was today’s unemployment release another Orwell sighting? Reader (and economist) Gonzalo Lira thinks the numbers were more than a tad tweaked to produce a more palatable result “We’re leveling off! We’re leveling off!”—so is the hope of Turbo Tim, Helicopter Ben, Larry the Wall Street Lackey and the rest of Team Obama. “This recession is […]
Read more...Frank Veneroso is skeptical that a downturn of this magnitude could be nearing an end as soon as the markets seem to believe. He parses the data and investor psychology. Another useful take comes at the Financial Times, where John Authers interviews bear market expert Russell Napier. Opt Publish at Scribd or explore others:
Read more...