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 […]
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, […]
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