Latest Posts

Case-Shiller offers up another depressing spectacle in U.S. housing

Case-Shiller offers up another depressing spectacle in U.S. housing

You might have thought house price declines were slowing. I certainly had hoped so. The latest data from January 2009 from the S&P/Case-Shiller index suggests this is wishful thinking as year-on-year declines hit another record of 19%. The decline was not only steep, but very broad-based. Data through January 2009, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home […]

Links: 2009-03-31

Obama’s Mid-Term Election – Nate Silver on 2010 Congressional Elections Do Democrats need an economic miracle to avert a serious setback in congressional elections next year? The stats guru’s new model shows that Obama will need about a 65-percent approval rating to hold the mid-terms. Wagoner encircled, exits GM with $29m handshake Bradford & Bingley reveals chief earned £1m for five […]

Is China avoiding using US dollars?

In the wake of recent statements by Chinese officials about the dollar and dollar assets (see our previous comments here, here and here), it does seem like the Chinese are avoiding dolar-based transactions: China and Argentina have made a tentative agreement to swap $10bn (£7bn) worth of their currencies. The move, which allows both countries to bypass the US dollar, makes […]

Banks can do ‘You Walk Away’ too

The website You Walk Away has become pretty popular because it teaches mortgage holders how to dump their properties on banks and get out from under their mortgage without losing everything. Apparently, banks are getting into the act too — and walking away. That leaves some people holding the bag when they didn’t expect to: Mercy James thought she had […]

Obama’s GM plans: good moves, poor optics

I like the fact that President Obama has drawn a line in the sand and signaled that no more funds will be given to U.S. automakers without their presenting a viable long-term plan for restructuring. Ultimately, the automakers cannot survive merely as a result of government largesse, but through the discipline of a competitive auto market.

In my view, the American automakers are viable companies which can produce cars that sell well. It is their poor operating cost structure and disastrous balance sheets which make them bankrupt organizations. This should mean they are prefect candidates for restructuring.

Nevertheless, other aspects of Obama’s treatment of the automakers are troubling. The dichotomy between how the big three automakers are being treated and how the big banks are being treated plus the sacking of a CEO at a critical juncture leave a lot of questions.

Hungary cut to a notch above junk by S&P

Standard and Poors had their hands full today cutting credit ratings.  They cut Ireland. But, they also cut Hungary, putting the country just above a junk credit rating.  I don’t think these will be the last sovereign debt ratings downgrades, especially in emerging markets — economies worldwide are deteriorating. The Brown Brothers Harriman currency group has released a view that […]

Nationwide: Press release on Dunfermline acquisition

Dunfermline, the largest uilding society in Scotland was forced into the hands of the Nationwide.  This happened only after the U.K. government was forced to pony up 1.6 billion pounds – not the best of news for Gordon Brown before a major world summit. As the Times Online says: The state-backed rescue brings to six the number of UK deposit […]

Is the ECB all-in on printing money?

Two weeks ago, the Fed roiled bond markets by signalling it would start to purchase Treasury bonds with printed money – the very definition of inflation.   Now, its the ECB’s turn to show it can inflate with the best of them.  They have adopted extraordinary measures despite the view of many that they have not inflated. But, the ECB […]

Spain gets deflation

Spain gets deflation

Spain is one of the original four bubble economies to implode.  This group includes the U.S., the U.K. and Ireland.  Unfortunately for the Spanish, in the wake of their property crash, things in Spain are looking particularly bleak with unemployment rising, GDP plummeting, and banks like Caja Castilla-La Mancha and property developers like Martinsa Fadesa and Drac hitting the skids.  Add deflation […]

Links: 2009-03-30

Zero Hedge: Exclusive: AIG Was Responsible For The Banks’ January & February Profitability Basically Citi and BofA may have been telling tall tales about profitability in January and February. How a Modern Depression Might Look — If the U.S. Gets There – WSJ Letter to FASB: Don’t Change Mark-to-Market! – Rolfe Winkler Reflation and How to Exploit It – WSJ […]

Chart of the day: Dow 1914-1929 vs. 1982-1999

Chart of the day: Dow 1914-1929 vs. 1982-1999

Has the bear market come to an end? It is certainly hard to say. In January, I called for 10% down in U.S. equities, which is basically where we are now (7900 on the Dow vs. the present 7776). My view has been that we would break through 2002 and 1998 lows to the down side before this was over […]