The New York Times, in “Reports Suggest Broader Losses from Mortgages,” does a workmanlike job of providing an update on the losses likely to result from the housing slump. Nevertheless, the piece feels woefully incomplete. It’s not the authors’ fault, but the bad news is coming in faster the experts can update their estimates. Today, […]
Read more...Bloomberg reports that famed investor/fund manager Jim Rogers is moving entirely out of US $. He depicts the US as in the process of losing its reserve currency status (a theme familiar to readers) with dire consequences for the currency’s performance. From Bloomberg: Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all […]
Read more...We’re a bit late to a very good comment in today’s Financial Times, “Interest rate cuts will not solve the crisis,” by Wolfgang Munchau. Munchau argues that despite inflation targeting, the potential to move into an inflationary cycle is greater than many analysts recognize, and that even a small increase in inflation at this juncture […]
Read more...A reader question got me to work through a back of the envelope calculation of what the SIV rescue plan, the so-called Master Enhanced Liquidity Conduit, would buy for its chief beneficiary, Citigroup. What I came up with gives cause for pause. It’s one thing to know in a general way that a proposal is […]
Read more...An excellent post by Angel Ubide, an economist for Tudor Investments as well as for the Center for European Policy Studies, at Vox EU (you need to click through to Telos to read the full text). He starts with a simple premise, that this crisis can’t be about liquidity because aggressive injections of liquidity haven’t […]
Read more...The recent record highs in stock market were presupposed on the notion that the credit crisis of the summer was now history and that growth would resume its former course. Investors chose to regard large writeoffs at UBS, Citigroup, Merrill, and Deutsche Bank as signs that they were all putting the problems behind them. That […]
Read more...The Financial Times’ Lex column today, in reflecting on the coming anniversary of the 1987 crash, dashes cold water on those who continue to be optimistic about corporate earnings. Independent of the outlook for housing, it seems quite remarkable that analysts can come up with forecasts of meaningful aggregate increases in earnings over the next […]
Read more...Michael Panzner of Financial Armageddon is the source of this very interesting chart, which he depicted as possible speculative convergence. If his observation is correct, his label is way too polite.
Read more...Ah, the thankless task of endeavoring to uphold sensible principles when events conspire against you. Mervyn King, the governor of the Bank of England, had to eat quite of a bit of crow in the Northern Rock bailout, when a mere two days after a submission to Parliament in which he criticized other central bankers […]
Read more...Even though members of the Adminstration and the financial media keep insisting that the economic fundamentals are sound, executives at major companies, who see what is happening in the real economy (admittedly through the window of their comany’s activity) before it is captured in statistical releases, are finding it hard to read the trajectory of […]
Read more...George Magnus, the UBS economist who popularized the term “Minsky moment,” has a thoughtful comment, “The credit crisis: why it is still too early to relax,” in today’s Financial Times. The article expresses doubts about the beliefs that undergird the current optimism in the financial markets, namely that the credit crisis is pretty much over, […]
Read more...Bloomberg reports today that commercial paper outstandings rose for the first time in eight weeks. However, the increase was a very modest $4.5 billion (by contrast, the decline in the first two weeks of the fall was roughly $90 billion per week, and the third week’s decline was just shy of $60 billion). Upcoming weeks […]
Read more...Despite the evidence of some recovery in the credit markets, such as the sale of some formerly-hung LBO debt (at admittedly lower prices) and the return of buyers to the structured credit market, the patient is far from healthy. An article “Is the storm over? Credit market conditions look changeable,” by Gillian Tett in the […]
Read more...Two gloomy sightings on the housing front at Bloomberg. The first was the release of wretched existing homes sales data for August, which followed a July that also showed serious deterioration. The only possible positive spin is that the rate of decline was lower in August than in July, but the August figures were an […]
Read more...The normally cheerleading Wall Street Journal, contrary to its usual form, voices considerable doubts about the near-200-point runup in the Dow yesterday: Stocks soared to a new all-time high….suggesting that investors already are shrugging off the problems that rocked global financial markets only weeks ago….. The scamper to new highs comes despite surging mortgage defaults, […]
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