Archive for June, 2008
Monday, June 30th, 2008
The Fed's critics have complained very loudly since Ben Bernanke began lowering interest rates last Fall. They argue that low interest rates encourage more borrowing and consequently more spending. And that low interest rates depress the the foreign exchange value of the dollar. They say all of ...
Posted in Dollar, Economy, Fed, inflation, Interest Rates | 7 Comments »
Wednesday, June 25th, 2008
If Israel bombs Iran, $200 oil is a distinct possibility. Both look more likely given recent developments. Consider:
Israel is making oddly accommodating overtures to erstwhile enemies Syria and Hamas. Hamas has been firing rockets non-stop from Gaza into Southern Israel since they drove out Fatah a year ago. ...
Posted in Economy, politics | 19 Comments »
Sunday, June 22nd, 2008
"Rise in Renters Erasing Gains in Ownership," New York Times, June 21st 2008
The story above is based on home-ownership data released by the Census Bureau back in April. The article bemoans the fall in the home-ownership rate from 69.1% in the first quarter of 2005 to 67.8% as ...
Posted in credit crunch, housing | No Comments »
Wednesday, June 18th, 2008
After an analyst downgrade sent their stock diving 30% to $2.35 today, BankUnited Financial of Florida tonight issued a press release announcing a secondary stock offering. The bank is looking to raise $400 million of capital, which at the current stock price would translate into an additional 170m shares.
As ...
Posted in accounting, banking, bubble, credit crunch, housing, shorts, stocks | 19 Comments »
Tuesday, June 17th, 2008
Yesterday's Page One article in the Journal suggested the Fed is in no rush to boost interest rates to protect the value of the dollar:
The Federal Reserve is almost certain to leave interest rates unchanged when it meets next week, and it currently doesn't appear to see a compelling case ...
Posted in Dollar, Economy, Fed, inflation, Interest Rates | No Comments »
Sunday, June 15th, 2008
The New York Times editorial board devotes today's top editorial to criticizing the Bush administration, and John McCain, for doing "so little" in response to "the foreclosure crisis." [Not the first time they've called for a bailout.] Doing "nothing" to prevent foreclosures will have an unacceptably large negative impact ...
Posted in bailout, Economy, housing, Interest Rates, taxpayer issues | 3 Comments »
Saturday, June 14th, 2008
This is the second part of a three-part tutorial on measuring a company's valuation. You can find Part 1 here. Part 3 is coming soon.
What is P/E?
Short for "Price to Earnings ratio," P/E measures the "value" of a stock by comparing the cost of that stock with the ...
Posted in stocks, tutorial | 3 Comments »
Wednesday, June 11th, 2008
The latest high profile investment by a sovereign wealth fund (SWF) may be Abu Dhabi's purchase of the Chrysler building here in New York.
This is making headlines because of the nature of the transaction. A landmark American building, being purchased by an Arab investment fund with $875 billion to ...
Posted in Dollar, Economy, Interest Rates, international trade | 2 Comments »
Tuesday, June 10th, 2008
OptionARMageddon is all about raising awareness of our debt-fueled lives and economy. Debt is a dangerous crutch to lean on. It's a drug, really, offering users the temporary and totally artificial high of having more stuff: the bigger house, the faster car, the size D breasts.
In today's NYT, ...
Posted in credit crunch, Economy | 3 Comments »
Monday, June 9th, 2008
What could be a better bargain than hiring a kid out of college at $100,000 per year to work 90 hours per week? How 'bout hiring a Chinese kid to do the same thing for less than half that.
The wave of outsourcing that has decimated employment in manufacturing and ...
Posted in Wall Street | No Comments »
Sunday, June 8th, 2008
There's been much chatter recently from bloggers covering China's economy. It seems China is raking in foreign reserves at an astonishing rate so far this year. Perhaps as much as $365 billion through April. Drilling down into the sources of that cash suggests the emergence of a new ...
Posted in bubble, Dollar, Economy, international trade | 5 Comments »
Friday, June 6th, 2008
--Update 2:28PM: oil now up over $11--
Oil is near $139 a barrel as I write this, a record high even after accounting for inflation.
Lots going on here. The biggest issue may be comments from the European Central Bank Chair suggesting a possible rate increase later this year. Interest ...
Posted in Dollar, Economy, inflation, Interest Rates, international trade | 1 Comment »
Thursday, June 5th, 2008
What do Ed McMahon and Evander Holyfield have in common? Foreclosure.
But seriously folks, the Mortgage Bankers Association reported today (via HousingWire) that deliquencies are accelerating among prime borrowers faster than among subprime borrowers:
While foreclosure activity hit an all-time record in the first quarter, according to statistics released Thursday morning ...
Posted in bubble, credit crunch, housing | 1 Comment »
Wednesday, June 4th, 2008
The Daily Telegraph in London has an interesting article comparing bank strategies today with similar strategies used in 1929:
Perhaps the most intriguing parallel...is the crude attempt at self-preservation made by the investment trusts in 1929 and the banks now.
In the great crash, investment trusts with vast cross-holdings in each other ...
Posted in credit crunch, credit default swaps, Economy, Wall Street | 1 Comment »
Wednesday, June 4th, 2008
[One of O.A.'s goals is to help readers with the vocabulary of investing and economics. This is the first in a regular series of posts I'll call "tutorials." We'll collect these and post them under a tab at the top of the page....With that, I present Part 1 ...
Posted in stocks, tutorial | No Comments »
Monday, June 2nd, 2008
A reader put me onto a speech by Fed Governor Richard Fisher to the Commonwealth Club of California last week. In it Fisher sounds similar alarms regarding the dangers of runaway entitlement spending that I discussed in my post two days ago....
I see a frightful storm brewing in the form ...
Posted in Economy, Fed, government spending, taxpayer issues | 3 Comments »
Monday, June 2nd, 2008
I'm not kidding. The LATimes has the story.
Posted in bubble, funny, housing | No Comments »
Monday, June 2nd, 2008
Below, an interesting chart published in last week's Daily Economic Commentary from Northern Trust. The shaded areas are recessionary periods.
"The ['gasoline and other motor fuel'] component of consumption expenditures as a percent of disposable personal income...has hovered between 3.3% and 3.8% in the past year...with the April reading at ...
Posted in Economy, inflation | 2 Comments »
Sunday, June 1st, 2008
Hello all. Happy to be working with the folks at ML Implode. A great site that remains ahead of its time.
Thought I'd introduce myself by putting a few of the top posts from the old OA on the top right.
And please enjoy the post below on the entitlements ...
Posted in Uncategorized | No Comments »
Sunday, June 1st, 2008
There is a crisis confronting the U.S. Larger than war, more dangerous than Osama, more hazardous than recession, it threatens our status as the world's preeminent economic superpower. If we fail to address this crisis, we face potentially "catastrophic consequences."
The problem, which I discussed with former Government Accountability Office Chief ...
Posted in government spending, taxpayer issues | 26 Comments »
