Barry Ritholtz, editor of The Big Picture blog and two-time Agora Financial Investment Symposium speaker, describes to Forbes how the failed recovery is like economic purgatory… and is at least devoid of new hiring among other problems. With interest rates essentially at zero the Federal Reserve has “painted themselves into a corner” and are well on the way to “making cash trash.”
[Read more...]US Government Redefines “Fixing the Economy�
August 6, 2010 By Leave a Comment
The keen-eyed David Galland, Managing Director of Casey Research and regular contributor to The Daily Reckoning, notices something amiss.
[Read more...]$1 Trillion Mortgage Bomb Still Ticking Away
March 3, 2010 By Leave a Comment
How close are we to being back to square one with impending mortgage meltdowns? According to SNL Financial, much closer than anyone would like to think. It has gotten a hold of an updated version of the original 2007 Credit Suisse chart that such caused a stir at that time. It’s reprinted below along with a few of SNL’s thoughts on the matter.
[Read more...]RBA Rate Announcement Surprises the Markets
February 2, 2010 By Leave a Comment
The currency markets warmed up a bit yesterday, as investors gained confidence and moved funds back out of the ‘safe haven’ of the US dollar. The main driver of investor confidence was the ISM Manufacturing Index, which expanded in January at the fastest pace since August 2004. The index rose to 58.4 in January from December’s 54.9 level. Any reading above 50 signals expansion in the US manufacturing sector. The surprising strength of this index had investors shifting funds back into the higher yielding assets yesterday, and selling dollars. Chuck took a look at the ISM numbers yesterday, and sent me the following on his way out the door:
[Read more...]Yields Up, Stocks Down
December 28, 2009 By Leave a Comment
Now that fears of a deflationary spiral have waned, a rising Treasury note yield is bearish for stocks. Rising Treasury yields increase mortgage rates and decrease the attractiveness of rate-sensitive stocks like utilities, banks, and REITs.
A rising trend in Treasury yields is especially dangerous when you consider that the biggest threat to the economy in 2010 is the backlog of mortgage foreclosures that have yet to work their way through the system. As these homes work their way through the system, it will be another deflationary shock to the banking system. In this deflationary shock, I doubt we’ll see Treasury yields move anywhere near their 2008 lows. Higher Treasury yields will keep pressure on interest rate-sensitive stocks, while the continued deflationary pressures in housing will keep pressure on credit-sensitive stocks.
[Read more...]Markets Believe US Rates Will Move Higher
December 22, 2009 By Leave a Comment
We had another uneventful day in the currency market, with the dollar losing some ground in the morning, but then rallying back up as the day wore on. Overnight, the dollar lost ground again and is trading almost back to where it began yesterday morning. There just isn’t anything to drive the markets, as investors are content to book the gains they have already earned for 2009. There will be a couple of big data days this week, but barring any major surprises, the traders seem content to just stay on the sidelines until 2010.
[Read more...]
Barry Ritholtz: We’re in Economic Purgatory
Barry Ritholtz, editor of The Big Picture blog and two-time Agora Financial Investment Symposium speaker, describes to Forbes how the failed recovery is like economic purgatory… and is at least devoid of new hiring among other problems. With interest rates essentially at zero the Federal Reserve has “painted themselves into a corner” and are well on the way to “making cash trash.”
[Read more...]