A colorfully written and informative post by Toro at Seeking Alpha on the overheated state of the commercial real estate market. We’ve commented before that it has somehow gone unnoticed that lending standards in the commercial real estate sector have become as permissive (one might say non-existent) as in the residential sector before the subprime […]
Read more...Since our immediately preceding post reminded readers of the not-so-great quality of many government statistics, what measures can the public use to gauge the health of the economy? John Dizard, in a Financial Times article, “Useful thinking from inside the box,” reminds us of a metric that was once used by some savvy investors (the […]
Read more...Barry Ritholtz via Seeking Alpha gives yet another example of a disheartening trend, namely, that government-issued statistics that investors, economists, and businesses for analytical and planning purposes are increasingly dubious. The case in point is the employment statistics. While the widely cited Bureau of Labor Statistics monthly employment report has showed tepid to reasonable employment […]
Read more...I have spent the entire long weekend avoiding dealing with this article by David Ranson and Penny Russell, “Does the Fed Matter?” in Friday’s Wall Street Journal. The reason is that if I got going, there is so much in it that is off beam, misleading, or just plain wrong that it would be hard […]
Read more...Nouriel Roubini looked at the various stats released last week – the 16% increase in new home sales versus the 1.4% fall in home prices averaged across 32 metropolitan areas (Federal Housing Finance Board survey) and the 2.6% fall in existing home sales from March to April (National Association of Realtors) and focused on the […]
Read more...This Financial Times story, “Growing biofuels demand raises food prices,” highlights increasing prices of grains and other soft commodities. The grain price rise merits particular attention, since it appears to be a structural rather than a cyclical increase. And higher grain prices in turn mean higher meat, milk, and egg prices. What this story does […]
Read more...Calculated Risk pointed us to a story in the Chicago Tribune, “Price slide nationally hides big gains in some metro areas,” which cites the Federal Housing Finance Board survey of 32 metropolitan areas. The report, which the article notes tends to produce more flattering results than some other analyses, found that, averaging new and resale […]
Read more...One of the elements of the American Dream is that each generation will enjoy a better standard of living than its predecessors. As this article, “Not Your Father’s Pay: Why Wages Today Are Weaker” in the Wall Street Journal makes clear, that is no longer true: American men in their 30s today are worse off […]
Read more...I’m a bit late to get to this item, a predictably good article by the Financial Times’ Martin Wolf on Nouriel Roubini’s observations about why Asian countries became so willing to finance our deficits (short answer: they decided to keep their currencies cheap after the 1997 emerging markets crisis) and whether this situation is sustainable […]
Read more...Until recently, the stock and bond markets have both signaled a great deal of optimism about the economy. But bond yields have started to creep up, which says that fixed income investors are becoming wary. We’ve noted in several posts that inflation is running at a higher rate than the oft-cited CPI stats would lead […]
Read more...One of the funny things about slow motion train wrecks in the financial arena is that even when they are painfully obvious, they can be so long in coming that the Cassandras come to look like idiots, or worse, throw in the towel. Remember the dot com era. Anyone with an iota of common sense […]
Read more...Apologies for the perhaps undue focus on real estate stories, but (unless you want me to write about the Preakness) that’s the most interesting news du jour. We didn’t see any reason for the housing market to improve, particularly since there was a considerable inventory overhang at the end of last year, and the first […]
Read more...One of Barry Rithotlz’s themes has been the idea of “inflation ex-inflation,” meaning the BLS’s predilection to define core inflation in such a way so as to exclude any item, like energy, whose price just might happen to be going up. We’ve noted a more general decline in the accuracy of government-generated economic statistics, particularly […]
Read more...I have a quibble with Nouriel Roubini’s headline, “Housing Recession Deepens and Subprime Credit Crunch Spills Over to Other Mortgages,” but agree with the substance of his post. The difference of opinion is in the idea that the subprime credit crunch is “spilling over.” Lenders have gotten much more stringent with weak borrowers, and somewhat […]
Read more...It’s quite remarkable how indifferent to bad economic data keeps coming in and the markets keep shrugging it off. And what is of particular concern, if you are the worrying sort, isn’t the peppy equity markets (that’s for the optimistic types anyhow), but the near-total indifference to risk in the credit markets. Aside from a […]
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