Dubai’s Shut Up Finance
We have heard of project finance, debt finance, LBO finance, islamic finance... we have even heard talk of Green Finance (self serving smile). But until yesterday, we never had the pleasure of Shut Up Finance. As with indoor skiing when outside te...
Credit Crisis vs. Permagrowth Crisis
Yeah, OK, the Credit Crisis may have abated - at least according to the Sage of Omaha (a.k.a. Warren Buffett, see story here). For example, the spread between BAA and AAA corporate bond interest rates has subsided to a historically reasonable level ...
About CIT And Sardines
CIT, one the world's largest finance companies specializing in lending to medium-sized companies and equipment leasing, just filed for bankruptcy. It is highly unlikely that American taxpayers are going to recoup any of the $2.33 billion of bailout m...
A More “Personal” Look At Debt
It is common enough to look at debt as a percentage of GDP, DPI, etc. but that's so... impersonal. So here are a couple of (very scary) charts that look at things from a dollars per person perspective (click on charts to enlarge). Debt per person and ...
Boundary Conditions
A reader asked if I think the yield curve will flatten. The answer is yes, I do.A steeply positive yield curve - as it is now - is the bond market's way of discounting a sharp rebound in the economy; I believe this optimism is unfounded and will soo...
Lies And Headli(n)es
Today's release of durable goods orders numbers for September was greeted by the following headline over at Bloomberg: US Durable Goods Orders Rise Fourth Time in Six Months in Recovery Sign.OK, so what are the numbers? Orders increased by a seasonall...
The Fisher-Bernanke Snake Oil
Everyone agrees we are going through a Great Recession brought about by excessive debt; or, to be more precise, the deflation of excessive debt. The proximate cause of the crisis is, therefore, similar to that of the Great Depression during which Yal...
Bills And Swaps Indicate Great Optimism
The US Treasury auctioned three and six month bills yesterday. Interest rates came in at 0.08% and 0.17% respectively (these are annual rates) and demand was very strong; the bid/cover ratio was around 4x. Apart from this and the previous two aucti...
It’s The Banks (Plus Kissinger On The Dollar And China)
If you are wondering what lead the recovery of broad stockmarket indexes, look no further than the chart below (click to enlarge). A comparison of relative performance between S&P 500 (yellow line) and the KBW bank share index (black line), it show...
Ending The Happy Hour
Regular readers know that I am a "deflationist", i.e. I believe that the current Great Recession is already characterized by asset and credit deflation, which will likely deepen and widen further before the global economy rebounds. Needless to say, th...
Six Month Sigmas
Today, I put my quant hat on (a small one, to be sure) and go trawling in stockmarket data, specifically the historical performance of S&P 500 over six months. The reason I chose six months for my yardstick is because shares bottomed out in March ...
Where The Debt Lies (..and Happy Columbus Day Mr. Krugman)
Apropos of Columbus Day and before the main topic, a comment on Mr. Krugman's editorial on monetary policy, appearing in today's NY Times ("Misguided Monetary Mentalities"). Please read it before proceeding.When Christopher Columbus sailed west from t...
