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Finding a bottom






As the writedowns at global financial institutions near $300 billion in capital lost as a result of the sub-prime crisis, the question as to when we reach a bottom is ever more urgent. Market history tells us that the severity of the bust after an economic upswing is usually related to the size of the original upswing. This mortgage and […]

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We need humility






Today, as I write this blog entry, the U.S. Economy is in crisis. We have a massive consumer and mortgage debt problem. Gasoline and food prices are going through the roof. The U.S. dollar is plunging. People are losing their jobs and their homes. All of this is pretty nasty stuff. How do we get our economy back on its […]

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Panic Time at the Fed






Steve Hanke, a libertarian economist who writes for Forbes, argues that the Fed is panicked about the economy in a piece that came out today. He believes they have lowered the Fed Funds interest rate to where inflation is now a problem. His suggestion: buy gold! (read article here) He is right. The Fed is repeating the awful Depression era […]

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Worst Housing Markets in America






Forbes just published a piece today that finds ten markets that are the worst in which to sell a home. Take a look. Two weeks ago, they published a list of America’s riskiest markets (here).

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Obama sees Bush behind weak dollar






Barack Obama, speaking at a gathering in Gary, Indiana, made some very accurate comments about the dollar’s weakness and its causes (see Reuters story). “We are spending all our money, spending overseas and spending dollars and nobody is buying things from us,” Obama told a town hall event in Gary, Indiana, in response to a question. “What happens is Saudi […]

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All Clear?






We are months into the credit crisis that began last summer, triggered by the meltdown in U.S. sub-prime lending. The crisis has been much deeper, much wider and longer than most market participants have expected. Yet, until the failure of Bear Stearns last month, no major financial institution had suffered. This crisis and the concomitant recession have been marked by […]

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Articles: Bank Writedowns & Failures






I am now updating the information on my Credit Crisis Timeline here: http://pro.creditwritedowns.com/credit-crisis-timeline There have been a tremendous number of economic dislocations during the present financial crisis. Initially written off as a sub-prime crisis, leading policy makers said the crisis was contained. It has since spilled over into Jumbo mortgage rates, Collateralized Debt Obligations (CDOs), all asset backed securities, High […]

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Banks tightening the screws on consumers






The banking crisis in the U.S. is taking on a significant turn for the worse as banks tighten the screws on consumers. With banks facing record writedowns to their equity capital, they are looking to limit their exposure to the mortgage market. The latest salvo in this battle is banks terminating unused lines of credit for homeowners. This reduces the […]

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Global Bank write-offs and failures






Since the housing bubble created a global credit crunch in June 2007 after Bear Stearns announced the collapse of two funds it ran (its High-Grade Structured Credit Fund and its High Grade Structured Credit Enhanced Leveraged Fund), there have been a massive number of announced write-offs and bank failures. As a result, a number of banks have also had to […]

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UK sure to follow the US into recession






I have been in Europe for a while and am back at blogging after a two-week hiatus. This morning I was listening to “Wake Up To Money,” a British finance show that one can hear via podcast. The gist of the discussion was that the UK economy is slowing markedly with consumers really pulling back. In fact, the show said […]

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Interesting Articles






2008 06 – Next Phase of the Credit Crisis to Hit Credit Default Swaps $62 Trillion Market 2008 06 – Frank-Dodd Rescue Prolongs Housing Crisis by Deferring Defaults 2008 06 – Federal Reserve and ECB are in no mood to save us from the consequences of our debt 2008 05 – Immoral Hazard 2008 05 – Government Numbers cover up […]

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Bank bankruptcy or bailout?






Update: Also see my list of Bankrupt global financial institutions. Recently, the pace of writedowns by major money center banks has increased. UBS announced today it wrote down $19 billion. Deutsche Bank announced today it wrote down $4 billion. Lehman Brothers was forced to raise over $4 billion in equity capital. Merrill Lynch and Citigroup are expected to write down […]

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