Archive for April, 2008
Tuesday, April 29th, 2008
This article isn't long on details. Treasury feels "enhanced regulatory powers" would be a "better tool than interest rates" to "contain asset price bubbles."
Hmmm. The Fed isn't currently charged with the task of containing asset bubbles to begin with. Its job is to maintain low inflation consistent ...
Posted in Fed, Interest Rates | No Comments »
Monday, April 28th, 2008
Tell you something you don't already know, right? Though the conclusion has been stated often enough, it's nice to see data to back up the story. For that, check out Hale Stewart's latest article over at Huffington Post (via Patrick).
It includes the Case Shiller chart showing the run-up ...
Posted in Fed, inflation, Interest Rates | No Comments »
Friday, April 25th, 2008
With much thanks to Calculated Risk a compilation of early nominees for word/phrase of the year, 2008. This is NOT shameless plagiarism: I take NONE of the credit for these....I'm just not that witty. The best I've saved for last...
Liquidity Cushion
Hyperstagflation, or hyperstagdeflation
"we're all level 3 now"... ...
Posted in funny | 1 Comment »
Thursday, April 24th, 2008
The bad news on housing keeps coming:
WASHINGTON -- U.S. new-home sales slid further in March to their lowest level since 1991 while the supply of homes for sale soared to nearly a three-decade high, suggesting little prospect of any near-term turnaround.
Sales of single-family homes slumped 8.5% last month to a ...
Posted in housing | No Comments »
Tuesday, April 22nd, 2008
The Sunday Times Magazine will be publishing a fascinating article regarding the credit rating agencies and the role they have played in the housing bubble. (The introductory paragraphs of the article are below; the full article is available at the link above.)
In the course of describing the rating agencies' ...
Posted in credit rating agencies, housing, Wall Street | No Comments »
Saturday, April 19th, 2008
Using a phrase like "too expensive" would seem to be subjective. But compare median house prices with median income (via Patrick). If people's incomes aren't climbing, how can they afford so much more house? (Click on the image to see a larger version of the chart....and the back ...
Posted in housing, Interest Rates | 5 Comments »
Saturday, April 19th, 2008
The Fed's aggressive interest rate policy is fanning inflation fears, causing some intrepid observers to argue for a return to the gold standard. I thought it very interesting last February when the WSJ published an op-ed by Judy Shelton that concluded as follows:
It's time to confront currency disorder. Our ...
Posted in Dollar, Fed, inflation, Interest Rates | 2 Comments »
Wednesday, April 16th, 2008
A few interesting items to pass along today.
The first is an interesting interview with an anonymous hedge fund manager (via JL). It's a longish interview, but a good insider's view on everything from the credit crunch to the downfall of Bear Stearns to the hedge fund business itself. ...
Posted in hedge funds, Interest Rates | No Comments »
Monday, April 14th, 2008
Didn't think I'd see an op-ed like this in the Journal. The editors themselves hate Fed easing, and for good reason. Inflation hurts everyone in the economy except for those in debt; those who, financially-speaking, have behaved most irresponsibly. But this opinion piece says the Fed ...
Posted in Dollar, Fed, inflation | 1 Comment »
Friday, April 11th, 2008
From Bloomberg this morning:
April 11 -- Confidence among U.S. consumers sank to a 26-year low in April as the labor market continued to deteriorate and gasoline prices rose.
The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 63.2 from 69.5 in March. The reading ...
Posted in Economy | No Comments »
Wednesday, April 9th, 2008
Arthur Kimball-Stanley published a fascinating op-ed on Credit Default Swaps in the Providence Journal on Monday. I spoke with the author and he gave me permission to republish his piece in its entirety. A 30-page version of this argument was accepted for publication in a law journal ...
Posted in credit default swaps, Wall Street | 14 Comments »
Tuesday, April 8th, 2008
Have taxpayers already bailed out the housing market? An argument can be made that they have. From FT:
Fannie Mae and Freddie Mac and other government-sponsored mortgage companies have become the backbone of the troubled US mortgage market as purely private sources of finance have all but dried up.
Fannie, ...
Posted in bailout, Economy, government spending, GSE, housing, taxpayer issues | No Comments »
Sunday, April 6th, 2008
In the latest CFA Institute Conference Proceedings, Paul McCulley's article ("The Liquidity Conundrum") has a superlatively readable discussion of economist Hyman Minsky's work on financial instability. Minsky's theory goes a long way toward explaining the housing bubble, in particular the creative mortgage products that blew it up.
Minsky’s core thesis ...
Posted in bubble, housing, Wall Street | 3 Comments »
Wednesday, April 2nd, 2008
Rs and Ds in the Senate have agreed on the basic framework for a new housing bill, according to the NYT. The basic framework appears to include the follwing:
$100 million to expand counseling for homeowners at risk of defaulting on their loans
tax-exempt bonds to let local housing agencies refinance ...
Posted in bailout, bubble, government spending, housing, taxpayer issues | No Comments »
