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Commercial real estate is next






A Bloomberg article today highlight’s the Commercial real estate sector (CRE) as the next leg down in the U.S. property bubble. The article states: With 312,000 private-sector jobs lost in the last four months, foreclosure rates more than double what they were a year before, and the homeowner vacancy rate at a record high, it’s easy to see why commercial […]

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UK home repossessions have soared






That’s the title of a UK Telegraph article on a report showing that UK repossession orders have increased to levels not seen since the housing bust of the early 1990s. According to this morning’s BBC 5 Live program, “Wake Up To Money,” the government claim that only a third of these repossession orders actually result in repossession and eviction. However, […]

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News Round-Up: 07 May 2008






Updated throughout the day MarketsTop UBS banker detained in US – The Guardian (05/07/2008)Bernanke Wants Fed to Pay Interest on Bank Reserves – Bloomberg (05/07/2008) USU.S. Economy: Worker Productivity Increases More Than Forecast – Bloomberg (05/07/2008)Tesoro posts a loss on plunging refining margins – MarketWatch (05/07/2008)Vallejo, California, Officials Vote for Bankruptcy – Bloomberg (05/07/2008)Pending Sales of Existing Homes in U.S. […]

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The TED Spread is coming down

The TED Spread is coming down






Despite stock markets being lower the last few days, there are some bright spots in he macro picture. On Feb 24th, I mentioned that risk in the markets was high as suggested by the Ted spread. (The TED spread measures the gap between the interest rate at which the U.S. Treasury funds itself (3-month T-bills) and the interest rate at […]

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Spain: Next Stop – recession

Spain: Next Stop – recession






Spain is perhaps the next domino in the global credit bubble to fall. The UK economy is slowing as well, but the pace of slowing in Spain is truly remarkable. According to Spanish-language news reports I have seen today (see Round-up), Spain is being hit with a housing bust that has led to increasing unemployment and reduced capital spending in […]

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Question: How is Fannie Mae a AAA company?






Today, Fannie released horrible quarterly financial results. The company lost $2.2 billion and is now looking to shore up its capital base. Fannie said an estimate of its fair value of net assets was $12.2bn at the end of the first quarter. This was 66 per cent lower than the value of $35.8bn assigned at the end of December. The […]

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News Round-Up: 06 May 2008






Updated throughout the day MarketsMajor Asset Class 1,3,5,10 and 15 Year Returns – Safe Haven (05/06/2008)Why We Must Fix It – John Mauldin, Safe Haven (05/06/2008)Goldman’s Murti Says Oil `Likely’ to Reach $150-$200 – Bloomberg (05/06/2008)Company Bond Risk Rises as Mortgage Defaults, Bankruptcies Soar – Bloomberg (05/06/2008)BlackRock to buy UBS debt – FT($) (05/06/2008)Financial doom and other fairy tales – […]

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Last week’s employment numbers






As with the GDP numbers last week, the employment numbers were very dubious indeed. The headline number was still a loss of 20,000 jobs. However, the detail point to likely revisions much beyond that number when more exact data have been compiled in the future. Four SectorsFrom Mish Shedlock’s blog, one can see 4 sectors of the U.S. economy of […]

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Last week’s GDP numbers






This weekend I received a disturbing newsletter from John Mauldin, provacatively entitled ” Lies and Other Statistics,” that dissected the GDP numbers where the headline number was +0.6%. Digging into the detail reveals a completely different picture altogether. We are in recessionIt is in the best interest of the U.S. Federal Government to paint a positive picture. The GDP numbers […]

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News Round-Up: 05 May 2008






Updated continuously throughout the day Markets Why we can’t cruise past a recession – Bill Fleckenstein: MSN Money (05/05/2008) Buffett Says Bond Insurers Don’t Deserve AAA Rating – Bloomberg (05/04/2008)Downgrades Show Storm Isn’t Over – WSJ ($)(05/03/2008) Credit crisis shows that banks need wise men not wide boys – Roger Bootle: The Telegraph (05/05/2008) Wall Street CEO Chorus Is Singing […]

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News Round-Up: 04 May 2008






MarketsBuffett says risk of financial meltdown has declined (MarketWatch, 5/3/2008)Warren Buffett: big is bad for banks (Times Online, 5/4/2008)US-Bankchef: Krise nicht ausgestanden (Die Welt, 5/4/2008) IrelandMortgage lending growth hits 16-year low (Independent Ireland, 5/1/2008)Prices drop in business sector for first time in five years (Independent Ireland, 5/1/2008) SpainHomes razed by Spain stun foreigners as slump deepens (Independent Ireland, 5/1/2008) UKHedge […]

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Ireland, Spain, Canada and Germany scrutiny






As I have mentioned in previous posts, the housing bubble was an international phenomenon. As a result, the U.S. subprime meltdown is indeed spreading beyond this limited sector. In the US, expect Alt-A and prime mortgages to feel the pain as the economy suffers recession. However, I would like to turn the focus to areas beyond the US. The markets […]

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