I had warned readers against assuming that because we had a bounce in the equity markets, that life would soon return to normalcy (“It Isn’t Over Until the Fat Lady Sings“). But I didn’t expect a rout like this, particularly with no looming news trigger. The yen has gone to 91. The Nikkei was down […]
Read more...Not only are customers reducing their food expenditures, but some food retailers believe that they are actually buying less food, not merely cheaper edibles. Observers believe that shoppers are being less wasteful. From the Independent: Food sales in Britain have fallen for the first time in more than 20 years, as customers tighten their belts. […]
Read more...Despite some calls that a commodities bottom is nigh (see Marc Faber, hat tip reader Megan), the Baltic Dry Index, a proxy for international shipping and international manufacturing, continues an alarming fall. While the BDI is known for false positives about trends in economic activity, the dramatic decline in BDi is partly the result of […]
Read more...Not surprisingly, gloomy news on the housing front continues. Note that RealtyTrac data overstates the actual number of foreclosures, since it counts each court filing in the foreclosure process, and any foreclosure involves multiple filings. However, comparisons of activity over time are useful indicators. Note that changes in various states to draw out the foreclosure […]
Read more...Big caveat: even though we have very strong opinions, we do not give investment advice. What we provide (aside from commentary) might be regarded as investment hazard warnings. You may nevertheless decide to go ahead after reading what we offer, but we hope you will proceed with caution. One thing most investors fail to realize […]
Read more...The blow to many Americans’ net worth via diminished home values and shrunken retirement accounts has lead to a new found insecurity and conservatism. Not only have consumers reined in spending, but they are reported to be suddenly worried about the debt levels and financial buffers. This change in sentiment is aided and abetted by […]
Read more...What a difference six months makes. When we questioned the thesis that the oil price runup earlier in the year was due solely to supply and demand, we got a fair number of hostile comments (see here and here for some of many examples). And now the view that oil will keep falling has also […]
Read more...The people I know in IT (even though they are in New York. they are doing bleeding-edge work) all professed that they were not affected by the stomach-churning market gyrations of the last six weeks: clients were moving ahead with projects underway, prospects still were keen to meet, contracts were being signed. However, if you […]
Read more...What is remarkable about this forecast for deflation is that, unlike the US, which just posted flat consumer prices in September, the UK’s recent inflation reports have still been in strong positive territory. Just as its housing market went into a sudden downdraft, Britain’s retail prices are projected to go sharply into reverse. From the […]
Read more...The collapse in the Baltic Dry Index continues. As we have noted before, the inability of cargo shippers to secure letters of credit (and the unwillingness of banks to accept L/Cs from other banks) is play a significant role in the plunge in trade transport. From the Financial Times: The cost of shipping bulk commodities […]
Read more...The Labor Department reported today that the consumer price index was unchanged in September and that core CPI (excluding food and energy) fell 0.1%. The markets may take some cheer from the marked reversal in inflationary pressures, but the flip side is that the change points to deflationary forces starting to take hold. From the […]
Read more...The bloodbath continues, largely in reaction to the bad economic news reports in the US . From Bloomberg: Asian stocks tumbled, driving Japan’s Nikkei 225 Stock Average down as much as 10 percent, as concern deepened that the global economy is headed for a recession after U.S. retail sales fell…. “Investors are still pricing in […]
Read more...Boy, that was short lived. The massive EU and US rescue efforts to pump equity into banks, the TARP, the increase in the Term Auction Facility (from $150 billion to $900 billion), the Fed offering unlimited dollar swaps to foreign central banks, and those monetary authorities themselves engaging in liquidity operations, appears to have come […]
Read more...George Magnus, a strategist for UBS, was one of the early popularizers of Hyman Minsky and was similarly one of the lonely few to worry about the financial and economic fallout of dealing with unsustainable levels of debt. His comment in today’s Financial Times, “Is there time to avert a Minsky meltdown?” is cautiously optimistic […]
Read more...Despite the aggressive action by the Fed and EU leaders over the last few days, Nouriel Roubini thinks a severe recession is still in the cards and worries that the financial system is not out of the woods either. From his latest report (hat tip reader Dwight, boldface ours): At this stage central banks that […]
Read more...