Submitted by Edward Harrison of Credit Writedowns. It has been my thesis for some time that we are seeing a secular change in consumption patterns in the United States. This will have grave implications for a world economy used to seeing the American consumer as an economic growth engine and consumer of first choice. Retail […]
Read more...It was mathematician Benoit Mandelbrot who first discovered in 1962, by crunching 100 years of cotton trading data, that markets have “fat tails” or more extreme risks than the standard models predict. A less oft cited finding of Mandelbrot’s was that markets have memory, in colloquial terms. Calm days tend to be followed by calm […]
Read more...Comstock Partners has a new newsletter out, and it makes a cogent case that there is no pretty way out of our over-leveraged mess. The disheartening bit is not only the narrative but a series of charts. One, on debt to GDP, show that it has risen in the last year (debt was roughly $49 […]
Read more...Wellie, we get a bit of cheery news of sorts to take the edge off the sting that Goldman, presumably alive today thanks to the many ministrations of the government, ultimately borne by chumps like you and me, is off again looting making money hand over fist. It appears that quite a lot of Goldman […]
Read more...Submitted by Edward Harrison of Credit Writedowns. This post is from Niels Jensen of Absolute Return Partners. I have featured his monthly newsletter a number of times on Credit Writedowns (here’s the link to the last one, hilarious title). Jensen is very good. Visit www.arpllp.com to learn more about Absolute Return Partners and to sign […]
Read more...If Alan Greenspan were serious about rehabilitating himself, he could hire himself out to central banks and instruct their officials in the art of Looking Serous and Appearing to Say Important Things While Actually Communicating Nothing. This is a crucial skill for anyone in an important bureaucratic position. The Chinese could use a few lessons. […]
Read more...What is going on? We noted on June 12 that the World Bank has lowered its growth forecast for 2009 from a negative 1.7% to close to negative 3%. World Bank Group President announced this prior to the G8 meeting and stressed the global contraction would have particularly grim consequences for poor countries. Today we […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns. During the last generation, the economics profession has veered toward a ‘science’ model of economics and finance. The intellectual underpinnings for this development began with the Efficient Market Hypothesis (EMH) and has continued in no small measure due to what is often termed ‘University of Chicago […]
Read more...Are we seeing a rerun of early 2008 in diminished form, as least as far as oil prices are concerned? Reader Michael sent along an article by Dan Dicker that contends that oil prices are well ahead of their fundamentals, and that, as before, the oil bulls are taking considerable cheer from Goldman’s boosterism. A […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns. Hi everyone. I will be cross-posting a lot more this week as Yves is out on holiday. I want to start things off with a video that outlines a bear market rally point of view that is very much consistent with my market view (For more, […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns. The data for personal consumption came out yesterday. However, I have not had a chance to look at the data and write a post until now. What I see right now is not good for a sustainable recovery. Let me tell you why and how this […]
Read more...To be perfectly clear (as one discredited President was fond of saying), It would appear that the Treasury has a pretty considerable supply problem that is starting to hit now. Longer dated bonds slid in a serious way late last week and had another bad day today (although the 2 year action went well). And […]
Read more...The TARP elicited a firestorm of criticism at its inception, and at various points of its short existence, particularly the repeated injections into “too big to fail” Citigroup and Bank of America, plus the charade of Paulson forcing TARP funds onto banks who were eager to take them once the terms were revealed. Now, however, […]
Read more...This post is from reader Gonzalo Lira. Although I beg to differ with him on a couple of his observations, it’s certainly colorful and thought provoking. I give my quibbles at the end. Insofar as this burgeoning Millennial Depression goes, I’ve noticed there are two sorts of people: Ones such as myself, obsessively following every […]
Read more...Despite quite a few warnings, the stock market rally continues to grind upwards. Although past is not always prologue, this upswing has not featured a new leadership group, as enduring bull markets normally do, nor has it reached the crushing valuation lows (PEs of 5-8 versus roughly 11 in early March), Moreover, despite the mythology […]
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