Archive - Dec 2009 - Blog entry

Elephant? What elephant?

Project Censored releases top censored news stories of 2009, Market Skeptics highlights catastrophic fall in global food production, gold bounces off $1100, Copenhagen succeeds in building global governance framework, Pakistan and Yemen sink further into chaos.

You don't put out a fire with gasoline. You don't cure a hangover with vodka. You don't end a headache by banging your head against the wall. Apparently, at least in Washington, you do address a sick banking system by keeping more sick banks open. It's as if I'm in the Twilight Zone...

All one really needs to do is to take a look a housing from a bird's eye view, whether adjusted for inflation or not, and it is quite obvious that not only are we still in a housing bubble, but we have a while to go before we reach equilibrium. Those insurer's, lenders, and investors highly levered to residential and commercial real estate had better be prepared for another 30% or so drop.

In response to a piece penned by Tom Brown of bankstocks.com about Synovus Financial, I carefully go through his bullish arguments and point out areas in which we do not share the same outlook. In trying to assess the potential risks, the questions I try to answer are as follows: (1) Will SNV have enough capital to make it through the cycle without further diluting shareholders and (2) What is the probability that SNV does not survive this credit cycle?

What's the problem with modern economics? Here is an interesting exchange on methodology between Paul Krugman and Michael Hudson...

And there goes Copenhagen, another climatic bust...

Fannie offers up a lump of coal for the holidays.

Here's a roundup from today's news ...

At least a few MDs at Morgan Stanley DO read my blog, but it is obvious that the guys in the real estate division don't. Early in 2008 I named Morgan Stanley the "The Riskiest Bank on the Street". The following is one of the reasons why.

In Whitehorse on Thursday, Canada’s finance ministers met to discuss the future of Canada’s pension system. No agreements are expected on how to enhance Canadians’ retirement savings. A pension summit is expected to take place later this year, but the public already knows what it wants: to retire with dignity.

Could a prolonged high unemployment rate, typified by the much touted "Jobless Recovery", cause a market crash in the not so distant future?

In this 12.17.09 edition of the Fibozachi Technical Update (FTU), we present detailed technical profiles of the US Dollar Index, Gold Futures, Silver Futures, the VIX (CBOE Volatility Index) and the S&P 500 Cash ...

I have no axe to grind, I'm only trying to examine what is true.

This is related to economics and business because governments are contemplating spending a lot of money on climate, and to require businesses to do certain things. Indeed, I just received an email from a financial newsletter titled "What Does Global Warming Have to Do with Energy Stocks?". And there are global carbon ETNs. And last but not least - if global warming advocates are right - the natural systems on which our economy relies are at stake.

How big a deal is Greece? Potentially real big. This story has all the pieces for something to get out of control. If the potential for chaos exists, the markets tend to gravitate towards it. Every day we seem to get a bit closer.