Global Market Commentary, Analysis and Investments
Who’s the moron?
The month of August came and went. It was full of sound and fury — with big whipsaws in stocks — but what did it signify? Nothing?
Yesterday, nothing happened. Stocks were as flat and placid as a democrat’s brain scan.
But the activists aren’t dead. Fed governors. Newspapers. Economists. All are pushing for more intervention. It is just a matter of time; they’ll get it.
[Read more...]The world is undercollateralized. This is the single most important feature of the 2011 economy. Sixty years ago, if assets were worth less than loans, it was possible to work our way into the black. In 1950, 59% of US corporate profits were from manufacturing; 9% were from finance. The roles of manufacturing and finance have reversed. Thus, we witness the desperate attempts to forestall what cannot be prevented. Yet, the world must deleverage. Banks must write off loans. Loans to bankrupt developers and companies must be called. Living standards must fall.
[Read more...]The Daily Bell recently caught up with Bill Bonner while at the Agora Financial Investment Symposium in Vancouver, BC. Their exclusive interview with the Daily Reckoning founder can be found below…
[Read more...]Given the dismal state of US employment it’s no surprise that Americans are walking away from underwater mortgages and defaulting on consumer debts. These actions, though, are leaving a greater share of citizens in what is essentially the worst credit rating category possible, under 600 according to FICO. As of April, 25% of Americans are under this lowest threshold, an increase from 15% before the financial crisis struck.
[Read more...]Has there been significant deleveraging in the US housing market? Not really. Instead, with already $7 trillion in home equity lost, mortgages have come down only $270 billion. It’s a significant discrepancy that’s going to have to come into alignment somehow.
Jesse’s Café Américain explains:
[Read more...]A recent article by Michael Pento describes how the Great Depression explains the greater one still ahead. It’s a trap President Obama and Fed Chair Bernanke have gotten the nation into… now — when deleveraging is most needed — they instead choose time and again to increase debt in order to temporarily pump new life into a zombie economy.
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Educated Guessing Game
Yesterday, Silvio Berlusconi said he will leave government…once the legislature has agreed on an austerity program.
Too bad. We’ll miss “The Cavalier.”
Once, in Rome, we heard him speak to a crowd. We didn’t understand a word of what he was saying. But he said it well. He was at ease…friendly…joking…enjoying himself.
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