Submitted by Edward Harrison of the site Credit Writedowns Now that everyone is talking about green shoots and the potential for economic recovery, I thought I would run through the statistics of U.S. GDP with you. The reason I am bringing this up is that there is a lot of confusion about what recovery means […]
Read more...As readers may know, power use is considered a good gauge of economic activity. And while many have pointed to loan growth as an indicator that China is making a recovery, energy consumption has yet to confirm it. From ChinaStakes (hat tip reader Michael): Power generation in China dropped again in April, indicating that the […]
Read more...During the oil price runup of 2008, economists liked to harangue market participants and observes who thought a move that rapid could not be solely the product of fundamentals. Where were the inventories, they demanded. If the price was “too high” as in excess of supply and demand, surely there would be excessive inventories. There […]
Read more...I am coming to realize there might be method in the seeming madness of changing dates and shifting sneak previews via favored members of the press as to what the stress tests might entail. Tire out the critics, numb the casual followers, and leave the boosters in firm control of share of mind. Let’s face […]
Read more...The WHO has designated swine flu an “imminent” pandemic, and raised its alert to a level 5 out of a possible 6. The World Bank guesstimates the cost of a severe pandemic at 4.8% of world GDP (yikes!). Yet the US had a very nice day for equity investors yesterday, and the Japanese stockmarket is […]
Read more...The New York Times reports that the Chrysler brinkmanship continues, with some small hedge funds acting as pigs in the hope of extracting yet more concessions from the government, as the bankruptcy deadline looms. The reason the funds can play such hardball is that the Administration does not want to BK Chrysler. Despite all the […]
Read more...Well, that isn’t exactly how the Financial Times’ Martin Wolf put it, but his comment today does carry a sobering message. Bank balance sheets need a tremendous amount of additional shoring up. Some not too pretty factoids: We appear to be less than halfway through writedowns, and the fundraising and recapitalizations to date are falling […]
Read more...I’ve been waiting for estimates of what the impact of a pandemic would be. Although the swine flu has now been elevated by the WHO to pandemic status, it’s far too early to say what that might mean in costs, both lives and dollar costs. Moody’s has made a first cut. From the Financial Times: […]
Read more...Forgive me for sounding even crankier than usual, but the reason deception sells is that so many people line up for it. The release claiming to describe how the stress tests were conducted in fact provided no new information. Some analysts were more than a tad dismissive: The central bank released a so-called white paper […]
Read more...The obstacle to a bailout of Chrysler is the still large bid and ask spread between what the secured creditors are now willing to agree to in the way of a haircut, versus what Treasury is willing to give them. The drop dead date is next Thursday. But news reports tonight differ on what a […]
Read more...A 1.3% fall in global GDP may not sound that bad to some readers, but in fact it is a horrid outcome. Most of us deal with advanced economy growth statistics, which are lower than those of emerging economies. And a negative world result of this level again confirms the sychronized nature of this contraction. […]
Read more...In America, the 1990 census showed a marked decrease in childbearing. 25% of the women between 30 and 34 were childless, while the comparable figure in 1976 was 16%. By 1985, the birthrate expected per average woman over her lifetime had fallen to 1.8, slightly below Europe’s level and below the “replacement rate”, the level […]
Read more...We said at the beginning of April, when the idea of a “surgical” bankruptcy of GM and Chrylser was first mooted, that we assumed this was an effort at high stakes poker, because there was simply no way to make reality conform with the Administration’s fantasy. Readers may recall that the high concept was a […]
Read more...Readers may know we have oft pointed to the work of Carmen Reinhart and Kenneth Rogoff on financial crises. They have built a large database of past crises, and have compared the US to past crises countries. Their conclusion was that the US looked like a typical crisis country “only more so”, and in two […]
Read more...KBW, a firm specializing in bank stocks, expects Wells Fargo to show $120 billion in “stress test losses”, meaning losses under the assumption of a supposed worst case of recession through the first quarter of 2010 and unemployment reaching 12%. Note that the 12% figure (according to Bloomberg) was included in the analyst’s report;. This […]
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