All Content

US Recession Signals

The U.S. has been flashing red regarding recession for some time despite the naysayers.First, let me define recession because you usually hear that it’s two consecutive quarters of a decline in real GDP. Not exactly. The National Bureau of Economic Research (NBER), the official arbiter of recessions says: The NBER does not define a recession in terms of two consecutive […]

Read more ›

The UK Economy

Recent news out of the UK has been very negative. There is so much data piling up suggesting that the UK is quickly moving toward a US-style housing collapse that I am going to use this blog entry to post recent news stories without comment to give a fuller picture of where the UK economy is headed. InflationCPI surge poses […]

Read more ›

British banks are underestimating losses

As the epicenter of the credit crisis has clearly moved to Europe, British Banks are at the center of new developments. However, doubts still exist about how they are valuing their assets and accounting for loan losses. Yester day the Times of London reported that activist investor Knight Vinke is publicly questioning HSBC’s writedowns due to losses from Household International’s loans.

Read more ›

Credit Crisis Timeline

The list below is the largest collection of links related to the present credit crisis on the web. I have been amending this list since May 2008. But, as the list is pretty large now, I have taken care to break it up into different sections. Please use the Index to move around this post and find just what you are looking for.

Read more ›
Inflation is here to stay

Inflation is here to stay

The inflation genie may be out of the bottle for a while. The headlines are being made by food and energy prices spiking higher. The Fed and many economists ignore food and energy when looking to underlying inflationary trends, relying instead on core inflation to signal the direction of prices. To date, core inflation has been relatively tame in Europe […]

Read more ›

Oil price rise is accelerating

Oil hit $126 a barrel today on production fears. Refiners and firms that need oil to make money seem to be hoarding it as the price rises inexorably higher. According to Bloomberg, “U.S. crude supplies rose 5.65 million barrels to 325.6 million barrels last week, amid increased imports.” In the end, this may spell disaster for an economy attempting to […]

Read more ›

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 […]

Read more ›

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, […]

Read more ›

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. […]

Read more ›
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 […]

Read more ›
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 […]

Read more ›

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 […]

Read more ›