It’s quite remarkable how indifferent to bad economic data keeps coming in and the markets keep shrugging it off. And what is of particular concern, if you are the worrying sort, isn’t the peppy equity markets (that’s for the optimistic types anyhow), but the near-total indifference to risk in the credit markets. Aside from a […]
Read more...I am loath to seem overly dependent on one source, but the market’s drop today was so overdue that it didn’t strike me as news, and the rest of the news didn’t seem that juicy either (how long can Wolfowitz keep going? In his next incarnation he can be an EverReady ad). So Ritholtz’s fulminating […]
Read more...We had mentioned the possibility of a downward revision of the first quarter GDP release in an earlier post; Roubini says first quarter GDP is likely to be revised downward to 0.7% (JP Morgan now forecasts 0.8%). He thinks the trajectory will worsen this quarter: Based on a variety of data that have come out […]
Read more...That’s the bottom line of a smart and scary bit of analysis by Michael Shedlock of “Mish’s Global Trend Analysis.” And it confirms, even more dramatically than we imagined, the large and growing gap between the Fed’s reputation and its real power. The Fed is a close cousin to the Wizard of Oz. It hides […]
Read more...A few days ago, we used the patently manipulated April nonfarm employment report as the point of departure for a post complaining more generally about the increasing dubiousness of government-produced statistics. Barry Ritholtz, who was also on this story early, gives a recap of the various other analysts who have looked at the report and […]
Read more...Recently, several well regarded skeptical-to-bearish market mavens (Jeremy Grantham, Barry Ritholtz, and Dennis Gartman) have independently come to the same point of view, namely that the stock market has become disconnected from reality and is trading on momentum, and the trend will accelerate. A quote from Ritholtz’s post “Buying Panic” was widely cited: In a […]
Read more...Many economists have observed that the current global imbalances, meaning US trade deficits financed by overseas capital flows, cannot continue forever. Indeed, there are already signs that foreign central banks are getting uncomfortable with their level of US dollar holdings and have said they plan to diversify their currency holdings (translation: sell dollars) which would […]
Read more...Michael Shedlock has a post, “Real World vs. Financial World,” which has a lot of interesting charts, which in his view pointed to an upcoming recession. The ones that interested me in particular related to money supply. As readers may know, money supply has fallen out of favor (the Fed prefers inflation targeting these days), […]
Read more...I’m certain you’re familiar with the expression “death wish.” I am beginning to wonder whether America has a banana republic wish. The country has been taking steps towards being a small-minded, elite-dominated, sham democracy. Mind you, I am pointing to a tendency, not an established fact. The US isn’t Haiti, or even Argentina. But we […]
Read more...Kudos for an excellent post, “Inflation Targeting is Flawed,” by Michael Shedlock at Mish’s Global Economic Trend Analysis. Like many other observers, we’ve criticized the Fed’s failure to consider, or even acknowledge, asset price inflation in its monetary policy decisions. Instead, the Fed and other central bankers focus on traditional price inflation, and stick their […]
Read more...For those of you who were market watchers in the 1990s, Goldman Sachs’ investment strategist Abby Joseph Cohen always made to case to buy stocks. She was so well regarded that a bullish pronouncement would move the market. And since the market for the most part appreciated handsomely, she looked brilliant, until, of course, she […]
Read more...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 […]
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