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 [...]

Oil at $100? That’s certainly my call and I’ll stick to it. So far my call of oil peaking at $150 is holding.( We’ll see for how long). On July 9th, after oil’s first pullback to $138 I said:
Yesterday, oil fell the most in one day since the start of the Gulf War in [...]

Recently, the SEC restricted short selling on a list of 19 stocks because of turmoil following the Fannie-Freddie worries last week. In effect, the SEC was signaling that these institutions are too big to fail because a number of these companies were not subject to rumors of massive losses while a number of institutions not [...]

Just because the financials are in for a few further rounds of pain doesn’t mean that quality financial institutions in the U.S. don’t exist. There is a stark difference in the level of risk some institutions took during the heydays of the housing and credit bubble.
For example, take yesterday. Dour Jamie Dimon reported [...]

“Prime looks terrible.” Those are the words of Jaime Dimon, CEO of JP Morgan Chase regarding the future of prime mortgage loans. Wall Street analysts were ecstatic at the largely positive news in JP Morgan’s earnings report even though earnings were down by more than half compared to a year ago. Yet, Dimon [...]

Back in June, I wrote about financial investors in bank shares having lost $10 billion. Then, I predicted that losses would mount and bank shares will fall. It seems that one part of that equation is true already as bank shares have fallen precipitously in the last several days on the heels of [...]

Looking at today’s selling wave, a number of bank shares are down over 10% including Washington Mutual (WM), National City (NCC), Wachovia (WB), Zion (ZION). Many other shares are trading well into negative territory with share prices below $10 including KeyCorp (KEY), Fifth Third (FITB), Dearborn (DEAR), and Huntington Bancshares (HBAN). These are [...]

Given the fact that the FDIC lost a massive $10.7 billion on the IndyMac transaction, I am re-posting this blurb from July.

I said then, I still believe, the FDIC needs a lot more money or it will be bust. Sheila Bair has already requested $500 billion. See the WSJ article “Bill Seeks to Let FDIC Borrow up to $500 Billion.”

Dean Baker has been on record since at least 2002 as predicting both the mortgage bust and the Fannie-Freddie collapse.
“If housing prices fall back in line with the overall rate price level, as they have always done in the past, it will eliminate more than $2 trillion in paper wealth and considerably worsen [...]

Yesterday, oil fell the most in one day since the start of the Gulf War in January 1991 to close at $136.03 in New York trading. Now is the time to evaluate whether we have seen the top in oil prices? On Thursday in my post “Oil close to $146” I said,
The price action [...]