I have been out the entire morning and haven’t been able to read any news reports on the GDP numbers. However, I have just now had a chance to look at the data and wanted to share my thoughts with you, unfiltered by the media reports. I would sum it up by calling it a story about the three I’s of imports, inflation and investment. But, I will also have a few words to say about state and local government spending as well.
Wading into the controversy surrounding Peter Schiff’s investment under-performance, the Wall Street Journal has released an article which calls into question the fundamental arguments for Schiff’s investment strategy. Schiff, a fund manager often seen on television, has significantly underperformed the rest of the U.S. stock market, which itself saw a drop of nearly 40% last year. The question is why. Judging from the Journal piece his approach was aggressive and ill-timed. To my mind, this calls into question whether these losses can ever be recouped down the line. I have highlighted in bold the salient points of the article below.
The monthly Nationwide Building Society survey is out for house prices in the U.K. The data show an annual fall that is the steepest on record at 16.6%. This means that house prices are now falling more rapidly than ever in the U.K. and that spells bad news as its economy has just entered recession.
You heard the quotes (China slams U.S. profligacy). Here’s the video. After some brief introductory remarks Chinese Premier Wen gets down to ripping into the United States.
If you want to get right to his most quotable remarks, they begin right about 6:00 in this long video. Definitely worth watching.
Here it is, my daily smörgåsbord of links from around the web. As usual, these links spathe world of economics, finance and politics. But, I will also start inserting a few links on technology as well because I am a bit of a technophile. You can see some of my Tech blog links in the blogroll.
Before I finish, I want to sound off about Google. The company has become a bit of a 900 lb. elephant on the Internet. They have way too much control for my tastes. I have found this out recently in particular because there is no substitute for FeedBurner, which has been syndicating my feeds. Basically, FeedBurner blows and I am sick of my feed being down and screwing up my site. So, I have unlinked my primary feed from FeedBurner. If you are getting my feed via FeedBurner, don’t. T he best feed is http://www.creditwritedowns.com/feed. Please use this feed going forward if you want any measure of reliability.
Whew. I am glad I got that off my chest.
You may have heard about the Rags-to-riches movie “Slumdog Millionaire” which recently won a Golden Globe for Best Picture. I saw the film and thought it was brilliant. Nevertheless, not everyone agrees with this sentiment, as the video below will attest. Some are calling the film voyeuristic poverty porn and are quite upset about it.
I should also note that child actors in the film are said to still be living in the same slum circumstances they were plucked from before the film started.
Bill Gross, the founder of PIMCO and manager of the world’s largest bond fund, has just released his most recent Economic Outlook. In it, he takes a tack regarding the fix to the present turmoil in the markets with which I disagree. However, I would like to draw your attention to his analysis as his voice carries weight in the market place.
Seasonal adjustments for jobless claims are wearing off, but the uptick in claims remains. U.S. Jobless claims for the week ended January 24th came in at 588,000, up slightly from the previous week. Meanwhile, continuing claims reached a new high of nearly 4.8 million. The data only confirms how weak the U.S. jobs picture is and sets us up for a very big unemployment number on Friday.
Bloomberg has a good interview from the World Economic Forum at Davos with Nouriel Roubini and Robert Shiller on the credit crisis and banking industry. The video is below.
Smarting from Tim Geithner’s comments about China manipulating, its currency, the Chinese have retaliated with a condemnation of U.S. economic policy in the harshest of terms. At the World Economic Forum, Chinese Premier Wen went on the attack, accusing the United States of undisciplined profligacy.
As I indicated just yesterday, irrespective of Geithner’s motives in branding China a currency manipulator, his language was unwise. Further comments of these sorts can only increase tensions between China and the U.S.
Here are some worthwhile contributions from the econblgger world I think you should definitely read.
In November, the U.S. federal agencies which oversee the banking system proposed new guidelines for real estate appraisals. One would imagine that these guidelines would be in keeping with the new more stringent regulatory frame of mind the financial services sector. This is not the case.
In fact, the new proposal appears to entirely eliminate mandated written appraisals in connection with cramdowns and refis.