Market Meets Reality

The stock market met reality yesterday – it did not go well. Record high oil prices and a warning about inflation form the Federal Reserve smacked sobriety into U.S. investors. Oil traded at $135 a barrel and the minutes from the Fed’s late April policy meeting implied that further interest rate cuts are unlikely [...]

Fed Saves Bear

The Federal Reserve broke new ground when it facilitated the purchase of Bear Stearns by JPMorgan Chase. Although Bear is ranked fifth out of the top five US investment banks, it was still counterparty to over $10 trillion in derivatives contracts and swaps. Therefore, the Fed decided it was necessary to accept Bear’s $30 billion [...]

The credit bubble blew up in ‘05

Sales of new homes fell 2.8 percent from December’s levels, and the median price of an American castle dipped to $215,000, which amounts to a 15 percent decline from year ago levels. I am actually tired of writing about the continuing dismal saga that is this nation’s housing market.
I wrote a rather long-winded essay in [...]

Wall Street Relies Too Heavily on Interest Rate Cuts

A decaying housing market, deteriorating credit conditions, a sickly dollar, sky-high oil prices, two expensive and useless wars, and the looming mass-retirement of baby boomers are the main ingredients that will create the fuel for a tumble in US economic growth over the next year or two (or three or four, etc.)
Yet the party on [...]

Citigroup smacked by reckless bets

Citigroup reported a 57% decline in profits for the third quarter of 2007. Apparently it received some nasty wounds from souring fixed-income investments and sinking consumer loans. This sad quarter reflected approximately $5.9 billion of write-offs; once light was shed upon faltering securities prices and proprietary trades gone terribly wrong.
Much of the damage inflicted upon [...]

Uncle Sam’s Credit Brothel- by Greg Strid

Take my house, please!

The housing market has been cooling off as of late. The sale of single-family homes declined 5 percent from June to July, and are off 11.4 percent from a year ago. Although the national median home price rose 1.5 percent over the past twelve months, there are signs that the frothiest coastal markets are [...]