This blog from time to time has commented on deteriorating economic conditions in China, and expressed the view that the slowdown is likely to be worse than most mainstream forecasters have anticipated (although the projections are now being revised downward). That sort of post has often lead to reader comments that a lower level of […]
Read more...I assume readers know that I am a pretty skeptical sort, and don’t expect a lasting stock market recovery until the fat lady sings (as Barry Ritholtz pointed out, in the dot-bomb bear market, the stock market did NOT anticipate economic recovery, but rallied after the economy had started to turn). But as the Great […]
Read more...The latest edition of Marc Faber’s latest newsletter fell off two separate trucks in my ‘hood, and I thought the most useful bits were Faber’s observations (honed from many years of seeing the world from Asia) that just because a market has gone down a ton doesn’t mean it can’t go down a great deal […]
Read more...No, the headline above is not goofy, and I presume it did get your attention. In a concise and suitably critical piece, Floyd Norris of the New York Times tells us that the corporate dividends paid in the seemingly good years depended far more on bank largess than was widely realized. And as credit is […]
Read more...A useful piece at the Wall Street Journal discusses the poor prospects for the US banking industry, which will in aggregate post a fourth quarter loss despite heroic interventions by the Fed and Treasury. The article makes much of recent and almost-certain-to-get-worse bank credit losses as the economy continues to deteriorate. Commercial real estate vacancies, […]
Read more...I was quite taken with this post of our occasional guest blogger Cassandra (who holds forth at Cassandra Does Tokyo). I hope you enjoy it as well. From Cassandra: Thumbing through the sell-side research from their multitudes of Strategists, I notice some recurring phrases, small and innocuous as they may be, that trouble me. Time […]
Read more...The most accurate banking analyst, Meredith Whitney, has warned that banks are likely to continue to restrict consumer credit, particularly if reforms to end “gotcha” practices, like universal default and double-cycle billing, are implemented. Credit card issuers shifted their model away from one where they earned a reasonable return from all types of customers – […]
Read more...A story on Bloomberg, “Q Ratio Signals ‘Horrific’ Market Bottom, CLSA Says,” argues that the global equity market bottom will be well below the recent lows, but also thinks we may not see it until 2014 as the current pump priming measures hold off deflationary pressures for a while. Note that Gary Shilling, who was […]
Read more...Conventional wisdom is that the plunge in commodities was due in part to the deflating of a speculative bubble, the balance the result of the nasty contraction now in full force. Once things recover, basic materials should enjoy a strong rebound as China and other emerging markets get back on the growth path. Comparisons to […]
Read more...One of the arguments made by bottom-fishers is that not only are stocks “oversold” (a technical notion that reflects recent trading activity, such as trading volumes, price in relationship to various moving day averages) but are also cheap based on fundamental notions of value. We have been somewhat leery of any long-term valuation notions given […]
Read more...A year ago, major endowments, like Yale, Harvard, and Princeton were seen as the ne plus ultra of sophisticated private investors, regularly posting 20%+ annual returns. Now they are dumping big chunks of their private equity holdings at distressed prices. What gives? The reason this is odd is that the last thing you want to […]
Read more...Two of the most accurate forecasters of the credit crisis anticipate that economic conditions will deteriorate further. Nouriel Roubini, who has been consistently been on the dire end of the opinion spectrum, characterizes our current situation as stag-deflation. Meredith Whitney, who was the first banking analyst to call the crisis in financials, and has made […]
Read more...I am puzzled by some recent market anomalies, which are breakdowns of established patterns: 1. Long dated Treasuries rising (a deflation signal) as stocks stage a dramatic rally 2. Dollar weakening while long dated Treasuries rise (the dollar and bonds usually go together) 3. Oil stocks rallying more than the S&P (28% versus 18%) when […]
Read more...There is a rather odd article up on Reuters with the headline, “Short selling declines as U.S. stocks scrape new lows” It is mainly concerned with the issue of whether shorts are culprits in the recent price declines of automaker and certain financial shares. The declining short interest says the attempts to implicate them are […]
Read more...Some have argued that stocks are cheap because S&P dividend yields are higher than Treasury yields. That presupposes dividend stay at present levels or increase. They are being cut, and with lousy to no profits in the offing, it’s reasonable to assume that in aggregate, dividend payments will continue to shrink. Right now, the cuts […]
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