The Wall Street Journal – Defaults Account for Most of Pared Down Debt 0.08% — The annual rate at which U.S. consumers have pared down their debts since mid-2008, not counting defaults. U.S. consumers might not be quite as virtuous as they seem. The sharp decline in U.S. household debt over the past couple years… Continue reading Are U.S. Consumers Really Reducing Their Debt?
Bloomberg.com – Munger Says `Thank God’ U.S. Opted for Bailouts Over Handouts Charles Munger, the billionaire vice chairman of Berkshire Hathaway Inc., defended the U.S. financial-company rescues of 2008 and told students that people in economic distress should “suck it in and cope.” “You should thank God” for bank bailouts, Munger said in a discussion… Continue reading Do As I Say, Not As I Do
The New York Times – Wall Street’s Engines of Profit Are Freezing Up Inside the great investment houses on Wall Street, business has taken a surprising turn — downward. Even after taxpayer bailouts restored bankers’ profits and pay, the great Wall Street money machine is decelerating. Big financial institutions, including commercial banks, are still making… Continue reading Bank Profits
Barron’s – Alan Abelson: Suddenly, Everyone Is Not Bearish Was there ever a better sign that the market is about to provide an unpleasant surprise? Thus, a few weeks back, the optimists among the investment advisors polled by Investors Intelligence sank to 29.4%, the smallest number since the dark days of early March 2009. But… Continue reading Sentiment
None Today
A customer asks: New issue fixed income markets are going full bore, equity markets are weak (s&P off roughly 5% in August) and it looks like retail is pulling money out of equities. My question is as follows: How often do the credit markets rally while equity markets struggle? When it does happen, what are… Continue reading Is Corporate Issuance Really “Surging”?
The Economist – America’s economy: Are we there yet? America’s recovery will be much slower than that from most recessions; but the government can help a bit The most wrenching recession since the 1930s ended a year ago. But the recovery—none too powerful to begin with—slowed sharply earlier this year. GDP grew by a feeble… Continue reading Covering The Economy
The Telegraph (UK) – US-China clash over yuan escalates, risking superpower stand-off US Treasury Secretary Tim Geithner has issued his harshest attack to date on China’s currency policy, the latest move in an escalating superpower clash across the gamut of commercial and strategic relations. “We are very concerned about the negative impact of (China’s) policies… Continue reading China
The Economist – Buttonwood: Another paradox of thrift Why low interest rates could also encourage saving Investors seem to have two reactions to the prospect of a prolonged period of low rates. For the bulls, it is a sign that investors will eventually decide to reject the safety of cash in favour of the higher… Continue reading Can Low Interest Rates Lead To Saving?
The Wall Street Journal – Reluctant Realtors: Fannie, Freddie Fannie and Freddie have already taken back nearly as many homes in the first half of the year as they did all of last year. They owned more than 191,000 homes at the end of June, double the year-earlier total. That number will grow because they… Continue reading Fannie/Freddie
The Financial Times – Japan needs to look beyond the low yen If Tokyo’s currency intervention was simply a device to prevent financial markets from overshooting, as they often do, then it would be both worthwhile and feasible. Unfortunately, the government has few ideas on bolstering Japan’s lacklustre recovery other than pushing for a weaker… Continue reading The Yen
The Economist – Finance: Taming the banks The public’s urge for revenge may not have been sated, but the new Basel rules make sense But it is the banks that matter most; and, in banking, it is remarkable how little has changed. Many banks are still “too big to fail” and the casino side of… Continue reading Banks