Latest Posts

China launches retaliatory investigation into U.S auto subsidies

China has sent yet another public signal that it is unhappy with the U.S. and its trade policy by prepping an investigation into alleged illegal auto subsidies by the U.S. government.  The timing of this announcement puts a spotlight on the bailout of GMAC, the auto financial company which effectively has been nationalized the firm. This may be by intention. […]

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A sustainable recovery with 530,000 weekly claims?

That’s what we seem to be expecting based on the huge uptick in equities since March. While stock markets have long since moved it up a gear, the employment market is stuck in neutral. The latest seasonally-adjusted jobless claims numbers came in at 530,000. The widely-followed four week average is still 526,250 and is not coming down. These numbers are […]

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Third quarter GDP growth comes in at 3.5%

While a positive number was expected, let’s wait to crunch the numbers before we pop the cork on the Moet – the price index was only 0.8% versus an expected 1.4%. So I will want to see what is happening with nominal GDP.  I also want to see how inventories look given the huge purges in inventories we saw in […]

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GMAC has been nationalized

And you thought the bailouts were over and market discipline might be restored.  Not a chance – the bailouts will continue, come hell or high water. The latest demonstration of this is GMAC, where the government will now be majority owner. GMAC has officially been nationalized. Now the government is running auto financing in addition to running the companies making […]

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The choice is between increasing or decreasing aggregate demand

The choice is between increasing or decreasing aggregate demand

This is a post I wrote in response to an ongoing debate about financial crises, credit revulsion and deficit spending over at Naked Capitallism. See the four links in the first paragraph for the precursor articles. DoctoRx, Rob Parenteau and Marshall Auerback have each written articles here to bring clarity to some issues I first raised at the beginning of […]

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Links: 2009-10-28

Finance and Politics All Debt is Not Created Equal: Government Debt is NOT the Same as Private Debt – Marshall Auerback Must-read Why rich college kids can sell dope and you can’t – Denver News I have a slightly different take because I know that there have been a decent number of drug raids in the previously protected college scene. […]

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Andy Xie: Central bank “arsonists have been asked to put out the fire”

Former Morgan Stanley economist Andy Xie joins other famed prognosticators like Nouriel Roubini in worrying about an incipient asset bubble. The Rosetta Stone Advisors board member sees the huge increase in money supply created by central banks as fuel to an asset bubble fire. He even goes so far as to call the central banks ‘arsonists.’ The financial crisis exposed […]

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Norway makes three

The Norwegian central bank has hiked rates 25 basis points, making it the third central bank and first European central bank to do so since the global recovery process started. The Financial Times says: Norway’s central bank increased its key interest rate by a quarter point to 1.5 per cent on Wednesday – Europe’s first monetary policy tightening since the […]

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On so-called bureaucrats in Washington and the morality of capitalism

Every time I hear the word ‘bureaucrat’ used to make a point for or against government’s role in the economy, I cringe. I see this label as unfair and dehumanizing. I grew up in Washington , D.C. where my parents and their friends rose through the ranks of government, often to the very managerial positions which are being used to […]

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Extend and pretend and the growing divide between delinquencies and foreclosures

Extend and pretend and the growing divide between delinquencies and foreclosures

Annaly Capital Management’s blog has a good piece up on foreclosures, inspired by yesterday’s Case-Shiller data (hat tip Scott). If you missed it, The S&P/Case-Shiller index showed a pretty steep 1.2% month-on-month increase in U.S. house prices in its latest figures (for August 2009). This is the fourth consecutive month of increases, signaling to some that residential real estate prices […]

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