Global Market Commentary, Analysis and Investments
Congratulations, Federal Reserve! Your zero interest rate policy tempted the world’s most-sophisticated bank to create its own toxic blend of interest income in the derivatives markets.
JPMorgan made headlines late last week for a $2 billion trading loss that’s likely to grow over time. Today, the bank’s CIO fell on his sword for the trading gaffe. Ina Drew, a 30-year veteran of the firm decided today was a good day to “retire” from his trading desk.
[Read more...]The Euro crisis is not “solved.” Not by a long shot. Yet Bloomberg reports this morning (i,e, March 2nd) that European leaders “declared a turning point in the Greece-fueled debt crisis.” The next project for the busybodies: a commitment to a “pro-growth agenda.” This agenda, we can be sure, will involve the few remaining creditworthy EU governments borrowing even more money for stimulus plans.
[Read more...]All central banks are desperate to stop stress from building in the global banking system. Despite what they say, job No. 1 of every central bank is to do whatever it takes to prevent a disorderly collapse of banks caused by “bank runs.” These central bankers are crazy, and nothing will stop them from supporting the status quo.
[Read more...]Early this morning, American Airlines parent AMR Corp. (AMR) filed for Chapter 11 bankruptcy protection, listing total assets of $24.7 billion and debts of $29.5 billion.
Readers of my research service, Strategic Short Report, know that we’ve held a short position on AMR since mid-March. But that’s only part of the story here…
[Read more...]The world’s “faith-based” monetary system is breaking down before our eyes. Don’t be caught off guard.
Last week’s euphoria over the Euro bailout turned around sharply this week on news that the political situation in Greece is worsening. That’s been the pattern for months.
The grim reality is that “rescue plans” can’t fix what’s broken. The Western nations are suffocating under mountains of debt…and there are only two known “cures”: default or inflation.
[Read more...]They just don't make earnings like they used to. In many industries, the quality of earnings has deteriorated in recent quarters.
Banks are among the worst offenders. On the downside of the biggest credit cycle in history, many banks are slowing the pace at which they're provisioning for credit losses. Some banks are even reversing their loan-loss reserves and adding these accounting adjustments to their net profits.
[Read more...]As Wall Street's big money players return from the Hamptons in the coming weeks, they will have to reassess the earnings power of their portfolio companies. Last week, Staples confirmed the message we heard from Office Depot and Office Max: the small business sector as a whole isn't very healthy. Disappointing earnings from Dell dampen the mood even further.
[Read more...]The stock market still has further to fall to catch up with the slowing economy. US GDP will keep decelerating – likely approaching a zero percent growth rate by 2011 – for the following reasons:
1. The long-term trend back towards consumer frugality and higher savings rates remains in full force. This will dampen consumer spending.
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A Big Oops at JP Morgan!
Congratulations, Federal Reserve! Your zero interest rate policy tempted the world’s most-sophisticated bank to create its own toxic blend of interest income in the derivatives markets.
JPMorgan made headlines late last week for a $2 billion trading loss that’s likely to grow over time. Today, the bank’s CIO fell on his sword for the trading gaffe. Ina Drew, a 30-year veteran of the firm decided today was a good day to “retire” from his trading desk.
[Read more...]