The Wall Street Journal’s Deal Journal tells us that former Comptroller of the Currency and later Bankers Trust Vice Chairman Eugene Ludwig is forming a (target size) $1 billion private equity fund to acquire banks. Now the bit the WSJ doesn’t seem to know is that Ludwig has been looking to form a fund in […]
Read more...One of the odd things about this bull market is the press fixation on the rather dubious bull case (not that the market won’t continue to be peppy for a while, but with fundamentals like the ones we have now, it can’t continue for long). We’ve pointed before to an excellent Martin Wolf comment on […]
Read more...The main prop under this long-in-the-tooth bull market has been consumer spending. Despite higher oil prices, rising interest rates, burgeoning unsecured debt and non-existent savings, consumption has continued at a robust pace. Relentless spending may finally be coming to an end. Nouriel Roubini focuses on falling retail sales: Last week it was pointed out here […]
Read more...Jeremy Grantham of GMO Investments (the G in GMO stands for Gratham), a very well regarded and long standing investment manager (the firm runs over $140 billion, much of it in equities). He is skilled in the black art of modelling and at the peak of the dot com bubble, correctly called how far the […]
Read more...The reliable Barry Ritholtz of The Big Picture provides his take (and note he expects a downward revision, as with the fourth quarter): GDP came in way below consensus. Given recent revision history, its very likely this will not be the final number. The economy slowed to its weakest pace of gains in 4 years, […]
Read more...The cliche is that the market climbs a wall of worries, but the specter of the Dow breaking 13,000 was accompanied by a chorus of arguments from informed observers that the enthusiasm was overdone. Roughly six weeks ago, in “How long will the markets be able to defy gravity?,” the Financial Times’ Martin Wolf looked […]
Read more...Yesterday, there was widespread commentary on the 8.4% fall in existing home sales in March. Some other factoids have gone comparatively underreported. From Nouriel Roubini’s RGE Monitor: [T]he Case-Shiller home price indices for February showing continued fall in home prices. The 10-city index fell 1.5% y-o-y; this is the lowest level since October 1993. The […]
Read more...Both Bloomberg and the Financial Times have prominent stories on the truly terrible existing home sales results for March. The National Association of Realtors announced that sales fell 8.4% in March, following a 3.7% rise in February. Price declines also worsened in 20 major cities. Some of the fall can be attributed to crappy weather, […]
Read more...For some time, we have argued that the subprime meltdown in and of itself would not lead to a recession, but would put a crimp in growth (the estimate we find most credible is a 1% reduction in GDP growth for the year starting last September). In addition, we saw the subprime crisis as the […]
Read more...Barry Ritholtz in “Watching Trading Volume Fade Out” points out that the March stock market rally, while producing impressive gains, has done so on falling trading volumes. This is an important technical indicator. The run up to the 1987 crash featured record highs on decreasing volumes. Mind you, we aren’t saying there will be a […]
Read more...Barry Ritholtz takes exception to this chart (he thinks markets today bear a resemblance to 1972-1973, which isn’t a cheery comparison by any stretch of the imagination) but enough readers sent him it to him that he relented and posted it:
Read more...Barry Ritholtz has a good post today on how the inflation stats are being presented in a particularly misleading fashion. We already have the proud history of CPI being redefined in the 1990s to lower the published inflation rate. As an economist buddy explained: There was a big fuss over the CPI some years ago. […]
Read more...If you believe in technical analysis, when a commodity or security price falls below a “support level” it will continue in the same direction until it finds a new (lower) support level. Even if you don’t subscribe to this school of thought, it is surprising and likely Not Good that the dollar is falling. One […]
Read more...Brad Setser, who is normally an upbeat counterpoint to permabear Nouriel Roubini at RGE Monitor has an unusually worried post on what the end game might look like for foreign purchases of the US dollar (the central element of the oft-discussed global imbalances). We found this post courtesy Brad DeLong. Setser focuses in on a […]
Read more...The always-informative Barry Ritholtz has long been of the school that the economy is in worse shape than most prognosticators admit, and the downside risk in the market is correspondingly greater. Below is his latest take on historical analogies for our current situation, and they aren’t pretty: To me, the popular 1995 soft landing scenario […]
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