A useful summary of data points from John Mauldin illustrates that the US housing market is still receding. This matches the IFC chart showing that sub-prime mortgage problems are not expected to peak till the beginning of the year. (That chart is in the July Review here.) First the inventory of existing homes rose yet …
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The risk of a global coordinated slump
The Economist asks whether the golden age of stable growth enjoyed by America and others for 2 decades is coming to an end. Regular readers will know that my prognosis is not optimistic. While the risk of a global coordinated slump is low, it seems that economic imbalances have grown rapidly beyond historical norms in …
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Quality enforcement Chinese style
As previously reported, the head of China’s Food and Agriculture minister was executed for corruption and dereliction of duty earlier this year. That sets the tone for measures that will be taken in in China to maintain standards. But it is more extreme than one would like. So, with the spate of product quality issues …
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Energy, credit and big picture change
This statement from hedge fund manager Hamid Hakimzadeh bears serious reflection. The global financial system is critically predicated on future energy supplies meeting projected demand. The credit pyramid presumes that future expansion is adequate collateral for today’s debt. The emerging reality on energy undermines this assumption, which in turn erodes the valuation of wide variety …
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Exxon denying pollution cartoon.
This new cartoon, produced by Friends of the Earth Europe, sums up in comic form how Exxon worked its way into government channels to further its business interests at the expense of the planet. It could be funny, if it wasn’t so sad. Millions paid to “think tanks” to deny pollution.
The non-bank banking crisis, and a solution for the future
Andrew Hunt has pointed out that many UK banks have been behaving as if they were non-banks. This is likely to have been the case in America and elsewhere too. Hunt points out that: the problems in the UK banking system have arisen because the banks have, in effect, been behaving as though they were …
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OpenEco – business tools to track GHG
OpenEco is a new global on-line community that provides free, easy-to-use tools to help participants assess, track, and compare business energy performance, share proven best practices to reduce greenhouse gas emissions, and encourage sustainable innovation. Akin to social networks, OpenEco aims to help build support for carbon-reduction strategies though sharing information among companies, government institutions …
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Fast and loose culture of top finance houses.
A recent article in the NYT describes how financial analysts are opting to learn on the job, rather than do MBA’s. While the article is largely anecdotal, what is apparent is that the culture of Wall Street encourages a cut-throat approach to business. While you can make more money than you need (maybe even more …
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Japanese housewives trading FX
Its not just the professionals that have benefited from the yen carry trade. Japanese housewives have been moonlighting as currency speculators too. Unfortunately, in the past couple of months the reality that there is no risk free investment has hit them hard, often wiping out savings in a few weeks because of leveraged/margin positions. This …
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A different scale of leverage has accelerated our progress and imbalances
As has been discussed over the past months, the economic imbalances around the world have grown beyond normal measures for some years now. Trade imbalances, government debt, consumer spending have all been beyond expectations in the US and other mature economies. With the tremors of collapse touching many since the cracks in US housing started …
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