The only moderate reduction in market havoc on Friday has all eyes on the European officialdom. Will they mount a credible enough plan over the weekend to buy them a bit of breathing room so they can come up a better salvage operation for the euro experiment? The odds are against both steps in the […]
Read more...We’ll know in due course, now that an investigation is underway, why the equity markets in the US went into complete freefall for about twenty minutes, with the Dow dropping 998 points. Per Bloomberg: Larry Leibowitz, chief operating officer of NYSE Euronext, said trades sent to electronic networks fueled the drop. While the first half […]
Read more...It most certainly is ugly out there. Yesterday, CDS spreads gapped out on all sovereign risk trades, with dealers reporting that there was big protection buying any time spreads eased All risk aversion trades are back. The euro continues to fall versus the dollar, dropping from 130 to 125 in a mere 24 hours. The […]
Read more...Reader Hubert sent along this post, with permission, and the following note: My friend Erwin has published a book out of ten years of columns for the German paper “Die Welt”. He put an Intro in front of it where he lays out why Germany will go down the tubes as everybody else. It is […]
Read more...A correspondent e-mailed me about his belief that credit market valuations are more than a big dubious. For instance, subordinated tranches of commercial real estate bonds, which at the lows of last year were trading at 30 cents on the dollar are now at 90 cents. He thinks (and this is a space he knows) […]
Read more...By John Bougearel, author of Riding the Storm Out and Director of Financial and Equity Research for Structural Logic “The whole intellectual edifice collapsed.” ~ Alan Greenspan “Blaming individuals [or a few institutions] is no substitute for acknowledging the failure of the whole system.” ~ ` BOE Mervyn King ~ Quotes excerpted from Yves Smith’s […]
Read more...I’m having a Dean Baker moment. Baker’s blog Beat the Press engages in short-form shreddings of the economic reporting of the day, with the New York Times and the Washington Post his favorite targets (for instance, Baker at least once a week criticizes the MSM for relying on forecasts from economists who failed to see […]
Read more...By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0 and Yves Smith Conventional wisdom holds that the Chinese are due (as in overdue) for a revaluation of their currency, the renminbi. For instance, a recent report from Goldman argues that China will raise the value of the RMB against […]
Read more...By Tim Iacono, founder of the investment website Iacono Research and creator of the blog The Mess that Greenspan Made Boy, for a group of policymakers at the nation’s central bank who, in a best case scenario, are going to just sit on their hands for at least the rest of the year, there sure […]
Read more...A fair number of policy commentators are hewing to the view that somehow the EU will cobble together some sort of solution to the Greek fiscal mess because the alternatives look vasty worse. As Paul Krugman noted: Now what? A breakup of the euro is very nearly unthinkable, as a sheer matter of practicality. As […]
Read more...As readers no doubt know all too well, the market premium versus safer ones contracts in robust times and widens in downturns. And since credit markets typically signal downturns months before the equity markets, junk bonds are one place to look for advance warnings of changes in economic fortunes (albeit with a risk of false […]
Read more...I saw this item on RGE Monitor (Nouriel Roubini’s blog/economic analysis website) and was gobsmacked: Greetings from RGE! A couple months ago, in a widely read FT op-ed, Nouriel Roubini warned that the “mother of all carry trades,” one funded in U.S. dollar denominated debt, could pump up asset bubbles around the world… When uncovered […]
Read more...By Bruce Krasting, a former foreign exchange and derivatives trader and hedge fund manager. Mohammad said, “One cannot foretell the future”. I think he was on to something. What looks predictable rarely happens. There are always surprises. I have been tripped up so many times. The following are not predictions of things that will happen. […]
Read more...By Edward Harrison of Credit Writedowns I am not sure I buy Meredith Whitney’s assertion that the government is “out of bullets” in its quest to prop up the economy. It’s a matter of political will more than anything else. Nevertheless, I do agree with her basic premise in the CNBC video below that the […]
Read more...Reader Andrew sent a research report by Pivot Capital Management, which makes a compelling case that the capital spending bubble in China has reached its limits. This is important in a narrow sense, since capital investment is now the largest component of Chinese growth, and in its broader ramifications, since China is seen as a […]
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