This in from the Times today: Bradford & Bingley is in big trouble. They are trying to do a rights issue and issue a profit warning at the same time. Can anyone tell me how one gets shareholders to pony up another 88p to buy a stock that is down […]
I don’t trust the U.S. government’s inflation number for measuring real GDP. The annual rate of inflation in this measurement is only 2.2%, while the Consumer Price Index (CPI) is running at a 4.0% clip. That’s as large a differential as you’ll see between two government inflation statistics.
The GDP number was revised upwards from 0.6% growth to 0.9% growth. However, what is most interesting is the GDP implicit price deflator. This is the index number the BEA uses to get from nominal GDP to real GDP, the inflation-adjusted number everyone hears on TV and in the news. Nominal GDP was up only 3.5%. So what is your guess about the inflation number the BEA used to get the 0.9% growth number you hear on TV? 3% inflation, 4% inflation?
I was just reviewing the Case-Shiller local metropolitan indices and saw that as the decline gets steeper, each of the 20 markets is reverting back to price levels 3 and 4 years in the past. So, here’s what I have on each metro area as of March 2008. You last […]
Double, double, oil and trouble Thursday, May 29, 2008 9:41 AM Is it ‘peak oil’ or a speculative bubble? Neither, really. AFTER oil hit its recent record of $135 a barrel, consumers and politicians started to lash out in every direction. Fishermen in France have been blockading ports and pouring […]
Bloomberg News reported that German retail sales for April were disappointing for the second month in a row. Retail sales growth is negative in Germany, adjusted for inflation.The reason: inflation. Consumers in Germany are losing spending power as inflation erodes the value of their earnings. Sales, adjusted for inflation and […]
The U.S. Dollar (USD) seems to have stabilized against most major floating currencies. This includes the British Pound, The Euro, The Canadian, Aussie and New Zealand Dollar, the Swiss Franc and the Japanese Yen. However, many market participants hedge funds included, do not think the USD’s fall has been stopped. […]
The risks going forward for financial institutions and their capital base are large and growing. The blog CalculatedRisk has reported on yet another story that should give chills to bankers. This one is very significant: Chapter 7 bankruptcy. A judge recently ruled against Cleveland-based regional National City in a case […]
The bloggers over at Calculated Risk have reported on a story making the rounds in the Internet. This story involves S&P’s downgrade of Alt-A Residential Mortgage Backed Securities (RMBSs). The crux of the matter is that S&P misjudged how much collateral in the underlying value of the homes there was […]
UPDATE: The latest chart on U.S. consumer credit growth is here. I have been focusing on debt as a primary contributor to the slump the U.S. is experiencing. We’ve seen skyrocketing Debt-to-GDP and Mortgage Debt. Now, I want to look at consumer credit. The Fed releases a monthly statement showing […]
MarketWatch is reporting today that Nationwide has said that UK home prices are down a record amount. House prices fell for the seventh consecutive month, dropping 2.5% from April, and were 4.4% lower than they were in May 2007, Nationwide said. The string of seven monthly price declines is also […]
I am wary of regional banks for good reason. KeyCorp came out with a disastrous earnings report yesterday and was promptly whacked by the market. The regionals have way to much exposure to commercial real estate (CRE) and construction loans. And in the next leg down of this downturn, that […]