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News Round-Up: 28 Jul 2008

IMF sees no end in sight to credit crisis – FT BBVA boosted by expansion in U.S. and China – FT Former Google engineers unveil new search engine – National PostCommodities such as oil could be the latest bubble about to burst – Roger Bootle, Telegraph U.S. to post record-high budget deficit in 2009 – Market Watch Hostile bids at […]

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Canadian housing hits the wall

Canada is one of the last bubble markets to hit the wall. Buoyed by the commodities boom in the west, Canada looked set to keep on an upward path even while its largest trading partner, the U.S. had already started to see a bust. But, evidence of the housing slowdown is everywhere in Canada. Will this be a US-style crash […]

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What if a large US regional bank goes to the wall?

I fully anticipate this will happen, so the question becomes: what will the Fed do? The FDIC stepped in at two banks over the weekend, 1st National Bank of Nevada and First Heritage Bank. These banks failed as a result of construction loans in real estate bust regions of the US. No, surprise there. This is to be expected in […]

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The Big Mac Index

The Big Mac Index

“The Economist” has developed the Big Mac Index as a way to determine if currencies are overvalued or undervalued. The thought is that a McDonald’s Big Mac being pretty much the same everywhere around the world, one should expect the cost to be the same as well. Of course, this is never true and the Economist publishes its Big Mac […]

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Recession while GDP is growing?

Recession while GDP is growing?

Given my recent prediction for a positive GDP number in Q2 for the U.S. and after another positive number from Q1, how could I maintain that the U.S. is in recession? It’s simple. The commonly-held version of recession is misguided. Most people use the rule of thumb of two quarters of negative GDP to call a recession. However, as is […]

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Ten predictions for 2008

With 2008 now half over, it’s obvious that the global economy has lurched to the downside. While many have remained unrealistically optimistic about the workout of the present credit crisis, downside risks have been the determining factors in keeping things soft. Where are we headed? I’d like to answer that question with my top ten predictions for the second half […]

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The divergence of US worker and corporate interests

In reading about profit increases of some U.S. multinationals due to robust overseas business and the weak dollar, while the U.S. economy faces a protracted downturn, it has occurred to me that the divergence between U.S. worker and business interests has reached a critical juncture. Before globalization, most U.S. companies earned their business in America due to products largely produced […]

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Chart of the day: debt’s diminishing marginal return

Chart of the day: debt’s diminishing marginal return

After the United States started its ‘Guns and Butter’ exercise under President Johnson and eventually de-linked from gold in 1971, its economy has become ever more leverage- and debt-propelled. Interestingly, the result has been a diminishing marginal return for each new dollar of debt.

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News Round-Up: 26 Jul 2008 – weekend edition

Lean Times in a Town of Billionaires – Deal Book UK economic growth slows sharply – BBC News Ottawa rejects Air Canada layoff waiver request – National Post Eurozone mortgage lending at record low – FT Japan inflation accelerates – FT Investors fear worst from UK bank results – FT WaMu reveals $10bn capital buffer – FT Mild slide in […]

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FDIC steps in at two more failed banks

1st National Bank of Nevada and First Heritage Bank, operating in Nevada, Arizona and California were taken over by the FDIC on Friday. They always wait until Friday night to do their business. This marks the first FDIC closure action since the FDIC closed the much bigger IndyMac. Bad loans to developers and home builders in Arizona and Nevada led […]

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US Airways says speculators caused oil price rise

US Airways says speculators caused oil price rise

I received a note from U.S. Airways in my inbox today asking me to contact my Congressman to stop those evil speculators from causing oil prices to rise. Last time I checked, U.S. Airways is an airline, not a consumer advocacy group. Dear U.S. Airways customer, Several weeks ago, we wrote to you about skyrocketing oil prices and the impact […]

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Ron Paul on the Housing Bill

Ron Paul sounds off on the housing bill that was just passed. This bill has more problems associated with it than any bill we have seen enacted to counteract the economic downturn. The moral hazard, the lack of congressional oversight, and the lack of transparency are all breathtaking. Congress has abdicated its responsibility again.

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