MarketWatch reports tonight that this year is showing the smallest year-to-year increase in retail drug prices since 1995. I happened to catch a buddy who is an FDA lawyer/biomedical engineer and before that, worked for the National Institutes of Health and one of Big Pharmas. She attributes the slowdown in price increases to three things […]
Read more...This post by John Hussman at Seeking Alpha echoes an article by Martin Wolf (the Financial Times’ lead economics editor) in March in which he declared equities to be considerably overvalued but refused to call a turn. Both Wolf and Hussman’ looked at long historical periods, although Hussman’s assessment is specific to the US. I […]
Read more...Kuwait had a closed door session to discuss its reserves with Parliament before reaffirming the country’s proven oil reserves at 100 billion barrels. As Xinhua points out, this is a odd and troubling set of events. Parliament had refused to pass the budget, which shows a large deficit, unless the oil ministry came clean with […]
Read more...Even the relentlessly upbeat National Association of Realtors is predicting that 2007 will be the first year since the Great Depression to witness a decline in housing prices. With lackluster-to-bad real estate tidings a daily staple, the Associated Press tells us, in “Housing sales may be worse than data show,” that even that information is […]
Read more...Iran has asked Japanese buyers of oil to pay in yen, not dollars. It has always been the convention to denominate oil sales in dollars (the Scotsman in March 2007 reported that China’s Zhuhai Zhenrong Corp, the biggest buyer of Iranian crude worldwide, had started paying for Iranian oil in dollars last year). If other […]
Read more...For those who have somehow missed it, Econbrowser does a consistent job of presenting economic data and trends in a thoughtful yet accessible fashion. And they usually have tons of charts. Menzie Chinn, an economist who has written about currencies, in “A Tipping Point for the Dollar?” gives an update in light of the continued […]
Read more...Readers of this blog know that I have been concerned about the state of the credit markets for some time. We’ve had (until the last month or so), rampant liquidity feeding asset bubbles in virtually every asset class except the dollar and the yen, tight risk spreads (that means inadequate compensation for risk assumption), lax […]
Read more...Another day, another gloomy housing forecast? The Freddie Mac prediction, that housing sales in the US will total 6.28 million, would be the lowest level since 2001. Not surprisingly, the agency attributed the expected decline to higher interest rates and more stringent lending standards. The report also said Freddie Mac’s home price index, for houses […]
Read more...In “Increasing Rate of Foreclosures Upsets Atlanta,” the New York Times gives a solid piece of reporting on a city where the unraveling of the housing boom has come hard and fast. Why Atlanta? Its state laws aren’t very pro consumer. Foreclosures proceed much faster than in most states – an owner can lose his […]
Read more...Thanks to Seeking Alpha, we have a recap of a Barron’s story, “Why a Housing Recovery is Far Off.” Aside from a stern warning in the Economist in 2005 about the US housing bubble, which declared the market to be 20% overvalued and added that when housing bubbles correct, prices often below “fair” value, in […]
Read more...I find it interesting when factoids that are already in the public domain get treated as if they are news. Stephanie Pomboy, as reported by Barron’s Alan Abelson (hat tip Barry Ritholtz) tells us that there are a lot of adjustable rate mortgages that have no equity. And, of course, if housing prices fall, more […]
Read more...The May retail sales reports, which showed the biggest gain in over a year, was generally greeted by investors as a sign of economic resilience. However, the skeptical sorts, looking at overextended consumers, lousy first quarter GDP stats, not particularly strong (and dubious) job growth reports, argued that if you looked at April and May […]
Read more...Because American consumers kept spending, in the face of 9 quarters of negative savings, falling housing prices, rising interest rates, rapidly increasing food and energy costs, and decelerating GDP growth, many economists appeared to believe they could continue to defy gravity. This MarketWatch story’s subtitle, “Signs of household stress are all around.” confirms that reality […]
Read more...Louis Uchitelle, in “A False Sense of Security? You Must Own a Home,” revisits the subject of Americans’ propensity to break into the piggybank of the accumulated equity in their home. In a concerned, rather than alarmist article, he points out that the amount of net homeowners’ equity has fallen, even in a time (until […]
Read more...Admittedly, this story from the Washington Post is largely anecdotal. But I am passing it along because it is an indicator of how widespread housing stress is. Remember, unemployment is still low, and normally defaults move up and down with overall employment. The sources in this article attribute the increase in mortgage defaults and foreclosures […]
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