Michael Shedlock, of Mish’s Global Economic Trend Analysis, provides some uplifting charts and commentary that should quash any doubts that this housing cycle is worse than its predecessors: ….this housing cycle looks different than any I have seen. To this point, I have included two charts. I suggest studying them carefully. What you find is […]
Read more...We’ve noticed a new theme among economics writers: Extreme Measures. Commentators have suddenly looked into the abyss, either of the depth of the US subprime/housing problem or the progressing credit crunch that has already caused a seize up in the money markets, and are proposing radical courses of action. Our first sighting was Paul Krugman, […]
Read more...Doing some weekend catch-up, and a reader pointed me to a very good post by Barry Ritholtz, which confirms something I’ve believed but haven’t gone to the trouble to prove, namely, that unemployment is much higher than the government releases would have one believe. Full disclosure: I’m skeptical of quite a few government stats: GDP […]
Read more...Upon occasion, we’ve quoted John Dizard of the Financial Times, who seems terribly plugged in and is unfailingly interesting. His latest piece included a succinct summation of the Fed’s situation and his take on what it will do: The real issue has been the excess liquidity created by the central banks through a decade of […]
Read more...Nouriel Roubini and Marc Faber are well known bears, but that fact has not prevented them from being largely right of late. And since the events of the last few weeks have been particularly nerve-wracking, the US media has taken to focusing on the more soothing aspects of news developments, to the extent they can […]
Read more...Andy Xie, who until last year was Morgan Stanley’s chief Asia economist (he apparently made himself unpopular by being too candid about Singapore), gives a blunt critique of last week’s liquidity infusions by central bankers in “It’s time for central bankers to stop bailing out markets” in the Financial Times. Xie’s conclusion is that the […]
Read more...For months, skeptics like Barry Ritholtz have expected, despite the cheery assurance of bulls, that consumers would start to curtail spending as a result of the housing bust and rising food and energy prices. After all, homes have become a near-ATM, as the savings rate has been negative for over two years (although recently it […]
Read more...Sunday’s New York Times features a story, “Mortgage Mania Didn’t Grip Everyone,” by Gretchen Morgenson on Michael A. J. Farrell, chief executive of Annaly Capital Management, a high-grade mortgage real estate investment trust, who has stuck strictly with high grade mortgage paper (despite considerable pressure from investors in recent years) and is coming through this […]
Read more...Currently docked in Marseille (managed to get a Financial Times yesterday in Monaco, so I feel slightly less cut off from the symbol world) and catching up on the grim market news of yesterday. It seems that the equity markets are getting the message that things are bad enough in the credit markets so as […]
Read more...Jim Rogers, who is by no means a card carrying bear, thinks the US housing market, and therefore homebuilder and investment bank stocks, still have further to fall. And the news of the last few days provides confirming data points. First, this morning’s Wall Street Journal has as a page one story a news item […]
Read more...According to Bloomberg, in “Bulls Load Up on Stocks in Worst Rout Since 2002 ,” optimistic investors are undeterred. In general, bond markets downturns precede stock market declines, since equity market investors need to be convinced that the signals from the credit markets are valid. In my youth, the lag was usually four months. And […]
Read more...At junctures like this, when markets have come a bit unglued and may be undergoing a sea change, making forecasts is as scientific a process as reading tea leaves. And since I am (literally) at sea with pricey satellite access, I’m limiting myself to checking the usual suspect media sources rather than being as comprehensive […]
Read more...Today’s Financial Times has a good piece on the turmoil in the markets yesterday, which has continued into Asian markets today (although Europe appears to be staging a recovery). There were two noteworthy elements in this article, namely the divergence between the equity and credit market perspectives, the second on Bernanke’s posture. On the first […]
Read more...We warned earlier that if conditions deteriorated in the financial markets, investment banks were particularly exposed by virtue of their taking on multiple exposures to the same underlying risk. For example, they lend to hedge funds via their prime brokerage operations, and also may be exposed to them by providing credit default swaps on assets […]
Read more...The New York Times gave a succinct summary of conventional wisdom on yesterday’s stock market drop: Countrywide’s stark assessment signaled a critical change in the substance and tenor of how housing executives are publicly describing the market. Just a couple of months ago, some executives were predicting a relatively quick recovery and saying that most […]
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