Yesterday was one fo the best days ever for the stock markets: What does it mean? I think it ultimately depends on factors unrelated to the move itself. Econompic provides us with some context: Obviously large one day moves in and of themselves tell us little about what is to come. So, let us...
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Yves Smith hits a theme I have been harping on, the Federal Reserve, and central banks in general, are making things worse in may ways by destroying the incentive for banks to lend or borrow from one another. She quotes James Bianco of Arbor Research: The Fed’s massive and numerous liquidity facilities are making...
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Despite recent struggles, hedge funds have done relatively well. Why? One recent study shows they can (despite academic claims that you can’t) reduce their exposure to market risk, and increase it, in ways that adds to return. Who wudda thunk it? Download article as PDF
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We have a particular fondness for Jullian Robertson’s offspring, the Tiger Cubs, when it comes to hedge funds. Sadly, they have struggled along with everyone else, though not as much in general. The NY Post reports on some of those hit hardest. Download article as PDF
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I am often asked about individual bank stocks, especially JP Morgan. Generally my answer is that Bank of America, JP Morgan and a few others look to be likely survivors, but how profitable they will be I am really unsure. JP Morgan is a special discussion, because I point out a rather astonishing fact,...
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I have argued in the past that the Federal Reserve’s policies may be helping in some ways, but hurting in others. Way too much borrowing and lending is running through the Fed which is drying up lending between banks. It also reduces the need for banks to find reasons to communicate and trust each...
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Tyler Cowen states his basic views on the crisis. My response in italics: 1. Glass-Steagall repeal was not a major cause of the financial crisis, nor was government-induced “minority lending.” I agree on the first, the second charge has some validity, but only in terms very different than the typical charge. 2. We...
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Let us look at one of the ways that we are being panicked unnecessarily, and why incidentally we can help many of these financial institutions in the fashion I discussed in my post on a potential alternative plan. In my next post we will discuss ways in which we are not being misled, and...
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I do believe we should be doing something as a nation, through our government, to avoid the not insignificant chance of a total financial meltdown. I have seen several things proposed that I find interesting, and I will get into them and other longer term issues in coming days. I had hoped to address...
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If you support the Paulson bailout plan that is. The New York Times has coverage. The Senate proposal would cost more than $100 billion and extend and expand many individual and business tax breaks, including tax credits for the production and use of renewable energy sources, like solar energy and wind power. The bill...
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