Archive - Nov 2009
To You, Our Readers. A Look Ahead, and a Look Back. Your Comments are My Inspiration.
Submitted by Travis on 11/01/2009 10:49 -0500Last week I wrote an “op-ed” on the Chinese, and their increasing involvement in the world automobile business; and as a car guy, I wish them well, much success, I do. Volvo too, after all, I was brought home from the hospital as a newborn in a 1975 China Red 164 E.
While some of the readers here at Zero Hedge may or may not have agreed with some of the things I had to say, I took note of an upright, registered ZH commenter (who shall remain nameless as I’m not calling him or out or anything bad… I’m thanking him actually) who said “Great Britain has some of the best mechanical minds in Auto racing and this technical talent could have help fine tune new engine and chassis designs…”
Guest Post: Dear Prudence, Won't You Come Out To Play?
Submitted by Tyler Durden on 11/01/2009 10:13 -0500For years now, we have been focused on the macro theme of the credit cycle in all its wonderful glory quite intently. For those reading our work over the years, you’d probably characterize it as focused “to a fault”. Again and again during the current decade we asked, is it a business cycle or a credit cycle? Of course after the events of the last few years, it sure seems that question has been answered in spades. At the moment, we believe our little credit cycle obsession is still the key focal point for what may lie ahead in terms of real economy and financial market outcomes. In this discussion we want to have a brief look at components of credit cycle character that as of today simply have no precedent over the last six decades of recorded Fed data. After looking at these data points, we want you to ask yourself, should we really be expecting a “typical” economic recovery? Secondly, we want to briefly have a look at historical patterns of consumption in prior recessionary cycles and what experience of the moment may be telling us relative to behavioral patterns of the past. Let’s get right to it.
Richmond Fed on the GSE’s – “They Encourage Defaults”
Submitted by Bruce Krasting on 11/01/2009 08:58 -0500The deep thinkers at the Richmond Fed have come up with an analytic report on mortgages. The scary conclusion is that when the government is the provider of mortgages there is a significantly higher probability that the loan will default versus a private sector lender. In other words, Uncle Sam is a "soft touch" lender, no need to pay.That conclusion will not sit well with Congress, so it is unlikely that this report will see the light of day. I doubt that many in Congress could read it anyway.
The report breaks down each individual State's rules on defaulting on a mortgage. A must read for those thinking of going down that path.




