economy: Jobs Report - Damn Lies and Statistics - 08/08/09 06:35 PM
Thursday evening I noticed something very interesting going on within the "financial media". All of a sudden the evening before Friday's big jobs report many of the media outlets started to run stories about how great the jobs report on Friday was going to be, and how it was clearly going to show our economy had turned the corner. Several financial analysts (and I use the term analysts lightly) suddenly downgraded their predictions for job losses to around 250k from much higher numbers and CNBC even took the effort of running a 1/2 hour special on how great the numbers were … (34 comments)
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economy: Cap and Trade: Yet Another Scam - 07/28/09 02:48 PM
I'm a couple weeks behind this one, as all the media focus lately has been on the health care bill. I've had several interesting discussions around cap and trade lately that inspired me to put my thoughts down into a blog post.
Disclaimer
I consider myself a fairly environmentally conscious person, I do believe based on data and observations human activity is creating a huge and very negative impact on the global climate. I'm extremely worried about the this planet over the next several decades. To me the health of this planet overrides any economic impacts of decisions, but at the … (71 comments)
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economy: The treasuries "toxic asset plan" a massive taxpayer fraud - 03/21/09 04:32 PM
The details of the Treasuries much anticipated toxic asset plan to "cleanse" the banking system and restore financial stability are now public. My reaction posted on Twitter as I was reading it.
@timu_matt: Reading the Treasuries new toxic asset plan. Everytime I think they can't get more hell bent on destroying this country they surprise me again.
Yeah, that pretty much sums it up. In a nutshell the plan revolves around the Treasury and FDIC loaning private investors money to buy the toxic assets from the banks. These loans would be made at almost no money down, when you combine the … (21 comments)
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economy: Comments on todays CBO Projections - 03/20/09 03:08 PM
So this afternoon the Congressional Budget Office or CBO released their updated budget projections for the US government and the numbers are both a shocker and a head scratcher. They are now projecting the US gov to run budget deficits, of $1.8 Trillion this year and $1.4 Trillion next year. That is the US government is projected to spend nearly 75% more money than they took in via taxes this year, and another similar percentage next year. To put this in perspective our budget deficit the last four years was about the same as what we'll now have in a single … (7 comments)
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economy: Fractional reserve banking and FED incompetence - 03/18/09 11:58 PM
Going off the reservation on another financial rant/post today...
The other day I saw this great post explaining Fractional Reserve Banking in really simple terms. It really lays the foundation for why our Federal Reserve and Treasury's policies not just now but over the last decade have helped lead us to where we are now and have actually been a main contributor to our worsening financial crisis.Without going into the details of how it works (follow the link if you want a clear explanation), fractional reserve banking is the type of banking system that the US and pretty much every … (7 comments)
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economy: The next big asset bubble - 03/18/09 04:34 PM
We've all seen several prominent asset bubbles and their collapses in the last decade. The collapse of the stock market in 2000 and again in the last year, the ongoing "housing bubble" bursting, a less talked about but no less spectacular recent collapse in the commodities and corporate debt markets. A bubble is usually used to refer to a boom that gets so far away from fundamentals and often purely driven by psychology or artificial attempts to keeps the good times rolling. Boom and busts are a natural economic cycle, where the principal "The bigger they are, the harder they fall" … (12 comments)
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economy: Breaking the silence, thoughts on stimulus - 02/16/09 08:38 PM
So I haven't written a blog post in what pretty much seems forever, after my massive barrage this fall on the bank bailouts and economic issues. Many people are surprised I haven't chimed in on the massive "stimulus" bill that every-bodies been talking about. Part of the reason is I've been way getting things ready to launch with Timu and haven't followed all the details as closely as I have in the past but also because I just got burned out, frustrated and cynical with everything, particularly anything that involves Congress.
But, ok here's a few quick thoughts...
First of all … (75 comments)
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economy: 2009 Market and Economic Predictions - 01/03/09 06:08 AM
As promised I put together my list of market and economic predictions for the New Year. I somewhat unfortunately managed to go 10 for 10 in last years predictions (Recap). Admittedly my crystal ball is a bit hazier this year, and the law of averages should give people hope. Sorry, if my predictions this year aren't any more optimistic, but I'm not going to pull a David Lereah and will just call them like I see them.
1. The "Credit Crisis" morphs into much wider economic crisis
During 2008 we saw what was first labeled as the sub-prime crisis morph into … (53 comments)
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economy: NAR's "Baghdad Bob" Confesses - 12/29/08 02:52 PM
You remember "Baghdad Bob" from the Iraq War, right? Iraq's information minister who repeatedly claimed no American troops in Baghdad as US tanks patrolled only hundreds of yards from his studio. Well the NAR's very own Baghdad Bob, former Chief Economist, David Lereah was notorious for his bullish optimism during the peak of the housing bubble now admits in a Money Magazine article it was just spin.
As chief economist for the National Association of Realtors, David Lereah was famously optimistic. Now a private consultant, he’s abandoned what he calls the “positive spin.”
Q: Were you wrong to be so … (61 comments)
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economy: 2008 Market and Economic Predictions - RESULTS - 12/26/08 03:36 PM
On New Years Eve last year I wrote a post, Market and economic predictions for the new year where I set out 10 predictions mainly about markets and the economy for the new year. I tried to choose topics where my predictions were differed from the majority of mainstream economists and market pundits. Since the year is now coming to an end, it's time to revisit this list and see how I did. I should have a new predictions list for 2009 coming within the next couple days.
1. The fear of inflation is misplaced, deflation is coming...
Correct - There … (52 comments)
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economy: Look At The Dollar Rocket - 10/21/08 11:24 PM
One of my 10 predictions at the start of the year was despite the forecasts of most, was the US dollar was going to strengthen against foreign currencies during the year. Well in the last couple weeks the dollar has been on an absolutely impressive tear against almost every currency in the world. The ferocity of this move has simply been amazing, with it moving almost nearly 3% against a basket of currencies in just the last 24 hours. Think of it this way, your dollar in your pocket just got 3% more valuable in the last day, even if it … (20 comments)
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economy: Why Start A Company In A Bad Economy? - 10/19/08 06:51 PM
This question has been in my mind a lot lately. Anybody who reads my blog knows my outlook on the economy over the next several years in pretty bleak. I believe and have believed for some time now that we're not just heading for a protracted recession, but a downturn that will fit the definition of a depression before it's over. I believe the stock market declines are far from over, despite any any short to intermediate term rallies we may get. I believe the biggest asset bubble, the bond bubble has yet to begin it's collapse and I believe we've … (46 comments)
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economy: The "Smart Money's" Take - Sequoia Capital Meeting Notes - 10/12/08 12:02 PM
I thought this was interesting enough to repost on my blog as it is Sequoia Capital's take on our current economic situation. For people that don't know Sequoia Capital is one of the most respected of the large VC firms. There portfolio of companies reads like a who's who of well known Internet firms, many of whom everybody here would be familiar with. I'd had this meeting described to me on Friday, and I was able to get a copy of meeting notes today from another source.
This is particularly relevant to me, as I am in the process of building … (9 comments)
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economy: Rubbernecking at the Lehman Brothers train wreck - 09/13/08 08:45 PM
Hot on the tail of the governments massive bailout of Fannie Mae and Freddie Mac another crisis (actually several) has now taken center stage is it appears very unlikely Lehman Brothers the nations 4th largest investment bank will survive through the weekend or at least EOD Monday. They were the obvious candidate next inline to blow after Bear Stearns failed back in the spring. They both had a very similar, and relatively undiversified business model, sat atop a literal mountain of bad mortgage debt, and were significantly under capitalized and over-leveraged. To be fair almost all the investment banks have been … (10 comments)
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economy: 2008 Market and Economic Predictions - UPDATE - 09/13/08 03:54 PM
I was just going through post blog posts and I saw one I did right at the start of the year with ten predictions for the new year mostly related to markets and the economy. I forgot to do a mid year update, but thought I'd revisit it now as I'm now feeling pretty confident I'll be batting 10 for 10 when the new year rolls around. My current comments on each prediction are below, and you can find more commentary in my original post.
1. The fear of inflation is misplaced, deflation is coming...
This one has now proving out … (13 comments)
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economy: Oh boy, Credit Crunch round #4 - 02/12/08 06:51 PM
Ding, ding, ding...
Looks like Round #4 of the credit crunch is just about to start. I wrote a few months ago in Credit Problems - Round 3 how drops in the ABX indices foretold the major credit problems in Feb, Aug, and then the ones in Nov a few weeks in advance. Well the heavyweight fighter is almost ready to come off his stool for the next round.
This time the problems aren't apparent in the ABX indices, which attempt to provide visibility into the price changes mortgage backed securities. This time we are seeing the (big) impending problems in the CMBX … (12 comments)
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economy: Why the FED may cut deeper soon, and the scary implications... - 02/05/08 12:04 PM
Ok, just a warning before reading any further, if you are having a good day, don't proceed as this post may be a little disturbing...
In the last several week the FED has cut the target overnight rate by 125 basis points. It's the most they've cut in a single quarter in the last twenty or so years. If you don't understand why I've bolded target you may want to go back and read one of my previous posts (rants) Why does no one in the media understand The FED?
Basically the FED does not in fact set interest rates, only sets are … (16 comments)
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economy: What are the Monolines and why is everybody trying to bail them out? - 02/03/08 05:57 PM
One of the big stories that has finally started to hit the mainstream media in the last week or two has been the Monoline credit insurures and everybody from banks to the government trying to arrange a bail out for them. I thought I'd try to put together another one of my simple explanations of what is going on and what the problem is.
What are the Monoline credit insurers?
These are companies like MBIA, Ambak and FGIC that for a fee provide insurance on debt against default. They insure all types of debt from municipal bonds, to student loans, to mortgage backed … (31 comments)
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economy: Are pigs smarter than economists? - 02/02/08 01:18 AM
In a story from Reuters:
CHICAGO (Reuters) - "Darke County Dave," a local hog, will opine -- or oswine -- on America's economic outlook on Friday, the Ohio treasurer's office said.
In his inaugural outing, Dave will choose between a trough of sugar or one of sawdust to gauge the economy's future course at the event in Greenville, Ohio, northwest of Dayton. Sugar means the U.S. economy will run sweetly, while sawdust ...
Lets see if this pig can outsmart the economists, which shouldn't be hard given their record. As of only a month ago (I'm not sure if they are now) more … (6 comments)
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economy: Market and economic predictions for the new year - 12/31/07 11:23 AM
Since the fad this time of year in the blogging world seems to be making predictions of what will happen in the next year, I think I'll make some of my own. Given that one of my primary interests is markets and economics I'll make my predictions mainly surrounding those topics. Yes as many may know, I'm pretty bearish right now and many of these predictions may go against the grain, but I'll lay them out there anyways.
1. The fear of inflation is misplaced, deflation is coming...
Despite many economic indicators as well as anecdotal evidence showing increasing inflation pressures, … (42 comments)
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