Bloomberg.com – Bullard Favors More Treasury Purchases Should Inflation Fall The Federal Reserve should purchase more U.S. Treasury securities and expand its balance sheet if the weakening U.S. economy shows signs that inflation is slowing, St. Louis Fed President James Bullard said. “Should economic developments suggest increased disinflation risk, purchases of Treasury securities in excess… Continue reading Federal Reserve Talk
<Click on chart for larger image> Bloomberg.com – Joe Mysak: Short Sellers Are Cutting Borrowing Costs of States Investors have to pay 284 basis points to insure their California bonds, 20 basis points more than for Portugal’s. At 298 basis points, Illinois is in worse shape than Ireland. It costs more to insure the debt… Continue reading Munis
Bloomberg.com – Caroline Baum: Housing Can Find a Home Without Fannie, Freddie Because homeownership was deemed to be “good” (See Summers, Larry, “No one ever washed a rented car”), housing became a tax-advantaged asset. Mortgage interest and real estate taxes are deductable. The first $250,000 of capital gains ($500,000 for a married couple) from the… Continue reading Fannie/Freddie
The Economist – Bank-capital rules: Super model The Basel club publishes new analysis on the impact of higher capital WHEN asked, before the crisis, about the right level of capital they should have, the bankers’ answer was simple: “As little as possible”. Now that the world has changed, their response has morphed to “less than… Continue reading More Failed Capital Rules Coming
Minyaville – David Stockman: How Pimco Is Holding American Homeowners Hostage As overlord of the fixed-income finance market, the latter generates billions annually in effort-free profits from its trove of essentially riskless US Treasury securities and federally guaranteed housing paper. Now Pimco wants to swell Uncle Sam’s supply of this no-brainer paper even further —… Continue reading Bill Gross, “Overlord”?
The Economist – Corporate psychology: How to tell when your boss is lying It’s not just that his lips are moving David Larcker and Anastasia Zakolyukina of Stanford’s Graduate School of Business analysed the transcripts of nearly 30,000 conference calls by American chief executives and chief financial officers between 2003 and 2007. They noted each… Continue reading Lie To Me
Zero Hedge (blog) – Matterhorn’s von Greyerz Explains Why The Apocalypse Is Nigh A few days ago we presented the most recent investor letter by Egon von Greyerz of Matterhorn, whose pessimism makes David Rosenberg seem like a CNBC staple cheerleader. Today, CNBC invited the hyperinflationist to its European studio where von Greyerz engaged in… Continue reading Really Scary Talk!
Calculated Risk (blog) – Census Bureau: 24.1 million homeowners had primary mortgage rates above 6% in 2009 The Census Bureau released a number of tables from the 2009 American Housing Survey today (report to be released in October). The survey showed: 76.4 million owner occupied housing units in 2009. 24.2 million were owned free and… Continue reading What Mortgage Rate Do You Have?
The Economist – Private equity: Less pomp and circumstance A useful industry that will probably become more useful as it becomes less grandiose IF PRIVATE-EQUITY outfits were once the kings of capitalism then during the credit crunch they behaved a bit like George III. Gripped by a bout of madness, they overpaid for firms at… Continue reading Private Equity
(h/t The Big Picture)
<Click on chart for larger image> The Wall Street Journal – Keep an Eye on the Bouncing Jobless Claims If there is a lesson investors should take from the economy’s recent malaise, it is to mind the message coming from jobless claims. The Labor Department’s weekly tally of new claims for unemployment benefits—released every Thursday—has… Continue reading Jobless Claims
<Click on chart for larger image> The Financial Times – Lex: US refis recover The Mortgage Bankers Association reported that loans to purchase homes remained in the doldrums, down nearly 40 per cent versus last year, but refinancing jumped to its highest level since May 2009. Although this certainly encouraged the White House and the… Continue reading Refi Mania