Here it is, Sunday evening. The Asian markets are opening down. I don’t know about you, but I am already tired of the events of last week. They don’t appear to be ending anytime soon, despite the attempts at reassurance by various people in positions of authority. And no, I didn’t take a beating. It’s […]
Read more...Paul Krugman, in his Friday New York Times op-ed piece, “The Big Meltdown,” gives his vision of how this week’s market events will play out. Per the title, his take is apocalyptic. Frankly, although it’s a plausible scenario, this isn’t Krugman’s best work. He is a very good political economist, but investment strategy isn’t his […]
Read more...Just a couple of posts ago, we complained about Bernanke talking up the stock market. While that may indeed have been what he was doing (and we don’t approve of that), he may also have been trying to slow action in the credit markets, and that is a legitimate use of his power of the […]
Read more...On the one hand, it’s a relief that the stock markets in the US stabilized today, although the Dow recovering only a bit more than 1/10 of its prior day tumble is hardly a rousing vote of confidence. On the other hand, we have to scratch our heads as to how even this wee bit […]
Read more...The last post gave the bears’ case. Here is a far more optimistic view, “S&P A/D Reading Worst in Ten Years – Rebound Likely Tomorrow,” from Seeking Alpha. FYI, Birinyi is as noted a bull as Roubini is a bear. And they both could be right. Birinyi, after all, is only forecasting today’s results: Birinyi’s […]
Read more...Oooh, if you read DealBreaker.com, it was really miserable to be a trader in the middle of the carnage yesterday. But it’s hard to muster too much sympathy when you recall that the average pay at Goldman last year was just over $620,000. The real test of how serious this really is isn’t simply how […]
Read more...That’s the title of an article in today’s Financial Times, describing how concerns about the implosion of the subprime mortgage market has led to concerns about the broader mortgage market. As the piece sets forth, this isn’t simple speculative precaution; it turns out delinquencies are running higher than expected in mortgages that are rated just […]
Read more...It is singularly odd (one might even say out of line) for a former Fed chairman to intrude on the turf of the current Fed chief. So why is Greenspan making predictions about the US economy, ones that seem to be at odds (at least in tone) with Bernanke’s? You may recall that the week […]
Read more...As readers doubtless know, the efficient market hypothesis states that prices of publicly traded securities incorporate all available information. We’ve also commented on the wide spread evidence that (except for the subprime sector) investors have a pretty cheery outlook these days. The US stock market has had a nice run so far this year, with […]
Read more...The Wall Street Journal today ran a story, “Mortgage Bond Pioneer Dislikes What He Sees,” featuring Lew Ranieri’s comments on the mortgage securities market. For those of you too young to remember, Ranieri effectively created the mortgage securities market at Salomon Brothers in the 1980s, as head of its mortgage-backed securities department. He and his […]
Read more...Ah, a man after our own heart (we too have written about Pollyanna markets and complacency about risk). In a nicely understated piece at Seeking Alpha, “Short-Lived Economic Pessimism: Pollyanna is Back – With a Vengeance,” Michael Panzer writes about how various regulators have been perternaturally cheerful this week.The piece is very much worth reading […]
Read more...Somehow, “subprime contagion” doesn’t have the same ring as “Asian contagion” did in 1998, but we have the same sort of phenomenon at hand: that panic in one sector of the debt market could lead to a broader rout. Nouriel Roubini in his RGE Monitor quotes extensively from a Bloomberg story that indicates that the […]
Read more...Earlier this month, Blackstone Group acquired Equity Office Properties Trust for $39 billion, the largest leveraged buyout in history. When a guy as smart and as plugged in as Sam Zell decides to cash out of his biggest asset, it’s worth considering that he might know something that the rest of us don’t know. But […]
Read more...This post from Seeking Alpha makes a persuasive case based on the commodity price outlook that inflation will get worse and the Fed may have to increase rates. When you contrast this with some of our earlier posts, such as ones on the distress in the housing market, the meltdown in the subprime sector, and […]
Read more...Mirable dictu, a Wall Street Journal editorial, “How Expansions Die,” that, for the most part, has a solid foundation in reality. Although the WSJ’s news pages have been reporting on the meltdown in the subprime mortgage market (admittedly somewhat less intently than the Financial Times), both the news and editorial pages have treated it as […]
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