OPEC it seems is finally increasing production, which will perhaps relieve some pricing pressure. Not a big surprise to me. OPEC is walking a tightrope here. The economy is still in dire straights. Low gas prices have been a benefit in the recovery. If OPEC wants good SUV sales the prices must come down. Moreover, if OPEC wants to spur the US economy - or for that matter the world economy - back to life, oil prices need to remain low. I think they are now getting the picture.
Disclosures: None
Friday, May 15, 2009
Thursday, May 14, 2009
Time to reLAX
As luck would (not) have it I have 7 hours to waste in LAX airport before boarding my redeye home to the Northeast. I do have a broadband connection, so life could be worse. Some time to catch up on some reading - and writing.
Wish I had said That!
Obama apparently gave a speech where he noted the U.S. debt loads are "unsustainable." Now there is a concept! He notes we cannot just keep borrowing from China. Yet another Earth shattering concept. Indeed, there are some indications the Chinese feel the same way. I like Obama and I am glad to hear that he gets it, at least in part. I just wish he would put our money where his mouth is and stop squandering it on the financial institutions that caused this mess. I admit that stabilizing credit is important to the economy, but I disagree with how it is being done. And at the moment I believe it is more important to focus on building new sustainable businesses, be it in alternative energy, infrastructure rebuilding or other areas where our country can productively spend the dollars. The government can lend directly to the businesses needing money and bypass the banks that caused the problem or at least focus on banks that operated properly and fund their lending. With Obama admitting our dollars to spend on this recovery are not unlimited, I hope he gains a better focus soon.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsSb4qtILhg&refer=home
Double Take
Here is a nice piece, a guest post at Naked Capitalism, on how Geithner claims to get it but then again is doing exactly what he says in part caused this problem in the first place. Low rates caused people and organizations to chase market gains through other riskier investments than some of the conservative fixed income assets of the past, like Treasuries. This led to more risk and a bubble. Guess what, rates are now lower than the time frame Geithner seeks to partially blame for our mess. We would be into building a much faster bubble already if investors did not have a healthy dose of fear (and large losses) keeping them in Treasuries or on the sidelines. All we can do is hope fear does keep us from making some repeated dumb mistakes.
http://www.nakedcapitalism.com/2009/05/guest-post-geither-admits-easy-money.html
And for those conspiracy theorists in the group, here is a rather fun cloak and dagger piece about the Bilderberg Group. I would tell you more, but then you would have to be taken care of, if you know what I mean.
http://pensionpulse.blogspot.com/2009/05/will-bilderberg-sink-global-economy.html
We did it to ourselves - to a certain extent.
It is fun to blame the banks, the mortgage brokers, the derivatives market, the credit agencies and the like for all our problems. It is not as much fun to blame ourselves. I (and my wife) are as guilty as the next couple. We like to buy the nice TV, the good vacations, the nice car and so forth and so on. Years ago in the late 90s we put close to $100,000 on credit cards to refurbish an old house we had bought. We thought we could get a loan to do that but we thought wrong, so we borrowed on credit cards. That led to some very touchy times for us and I vowed never again. We were able to sell that house in 2002 for a nice six figure gain, even after paying off credit cards, after just four years, so we escaped that problematic situation. Nonetheless, had housing taken a dive then like it has now I believe we may have walked away.
Now I am not the most sophisticated person on financial matters but I like to think I am smarter than the average Joe, so if I can get in over my head that easy, it is easy to understand how others can. Indeed, in times of easy credit and mortgage brokers throwing money at you, it is easy to get drunk on the power of what credit can buy you. Nonetheless, at the end of the day it is - in most instances - us listening to that little devil on the one shoulder talking us into the good times. We are from a rather decadent couple of decades. Now we must return to the frugality of our parents or grandparents. That is a good thing.
Here is a nice piece from the NY Times on how someone who definitely knows better - a writer on matters economic - allowed himself to get caught up in the luster of what debt could bring him. You can guess the end result:
http://www.nytimes.com/2009/05/17/magazine/17foreclosure-t.html
Bucket Shops
Here is a nice piece from Calculated Risk on an interview of Charlie Munger, Vice Chairman of Berkshire Hathaway. It starts with a good discussion of accounting issues but then goes into a discussion of how the CDS market resembles the Bucket Shops of the somewhat distant past. So what is a bucket shop?
In the early 1900s, there were off-exchange shops that allowed people to bet on the direction of securities they did not even own. Their bets were literally placed into buckets. This in part led to a serious credit freeze and bank panic in 1907. (There are obviously some steps I am skipping here but trust me, it led to problems). In response, various laws were enacted to prevent bucket shops.
By some standards, credit default swaps arguably violated these laws. Oh what to do, what to do? What we do is we enact a new law that makes it clear that CDSs are legal. It was called the Commodity Futures Modernization Act of 2000 and it was passed in the waning days of the Clinton Administration. Basically, CDSs bought to protect actual positions were not a concern (though these might qualify as insurance and should be regulated as such). The concern was for those CDS positions insuring against at default where the holder of the CDS had no risk tied to that default. These potentially might violate bucket shop laws. So we "modernize" these antiquated laws to allow it.
Perhaps before we repeal old laws we should study why they existed in the first place. Then again, I am foolishly thinking politicians have good sound logic to their decision making, as opposed to political considerations. Either way, we have ourselves to blame for this.
http://www.calculatedriskblog.com/2009/05/interview-with-charlie-munger.html
http://www.kioli.org/cafe/LocalFiction/1011/
Only the Shadow Knows!
Of course I am talking about shadow inventory - that group of homes sitting on the sidelines that would be put on the market but for the current conditions. Some of that may sit with banks, some with builders, but a lot is with homeoners looking to sell for whatever reason. Here Calculated Risk notes there is usually about a 6% homeowner turnover each year, i.e. 6% of existing homeowners put their house on the market. Now, in addition to all the existing inventory - around 1o months worth I believe - the number of homeowners "somewhat likely" to "very likely" to put their homes on the market if housing prices improve is roughly 31%. In normal times, that would be six years worth of turn over. In other words, if you expect inventories to go down and prices to start improving a lot, time to rethink.
http://www.calculatedriskblog.com/2009/05/zillow-high-percentage-of-homeowners.html
Especially with unemployment numbers continuing to shoot through the roof.
http://www.calculatedriskblog.com/2009/05/unemployment-claims-continued-claims.html
Did S&P Say That?
The S&P- you know the rating agency that gave AAA to anything that moved - is now saying the banks need more capital than the government is saying and the banking crisis may go on another three or four years. Now some have said the ratings agencies have gone too far the other way due to criticism of their earlier lax ways, but we will see.
http://www.reuters.com/article/newsOne/idUSTRE54C6XL20090513
I agree that the stress tests were a joke for the most part. Others agree. This especially seems to be the case for Citigroup. They seemed to have done extremely well. By some accounts they should have required $63 billion more in capital, not $5.5 billion, and that appears to be based even on the government bogus stress test parameters. Me thinks me smells something.
http://www.time.com/time/business/article/0,8599,1898049,00.html
Time for some inflexion?
There has been some talk lately of inflexion, a term not all people understand. It reflects basically that the speed of decline has slowed. Decline continues but not at the torrid pace it was at. This has to come at some point. Housing prices will not go to zero, unemployment will not go to 100% and the stock market will not lose all value. Eventually each of these will eventually slow in terms of rate of decline. That is basically the point of inflexion.
For those who model, it is an important point. It adds a measure of realiability to their models. In normal times, I believe such models would have a bit more legitimacy. Right now, there is too much prospect for government stimulus to build a false recovery - or at least a false inflexion - so I am not betting on it. We will see.
http://brontecapital.blogspot.com/2009/05/when-stockmarket-does-analysis.html
Disclosures: None.
Wish I had said That!
Obama apparently gave a speech where he noted the U.S. debt loads are "unsustainable." Now there is a concept! He notes we cannot just keep borrowing from China. Yet another Earth shattering concept. Indeed, there are some indications the Chinese feel the same way. I like Obama and I am glad to hear that he gets it, at least in part. I just wish he would put our money where his mouth is and stop squandering it on the financial institutions that caused this mess. I admit that stabilizing credit is important to the economy, but I disagree with how it is being done. And at the moment I believe it is more important to focus on building new sustainable businesses, be it in alternative energy, infrastructure rebuilding or other areas where our country can productively spend the dollars. The government can lend directly to the businesses needing money and bypass the banks that caused the problem or at least focus on banks that operated properly and fund their lending. With Obama admitting our dollars to spend on this recovery are not unlimited, I hope he gains a better focus soon.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJsSb4qtILhg&refer=home
Double Take
Here is a nice piece, a guest post at Naked Capitalism, on how Geithner claims to get it but then again is doing exactly what he says in part caused this problem in the first place. Low rates caused people and organizations to chase market gains through other riskier investments than some of the conservative fixed income assets of the past, like Treasuries. This led to more risk and a bubble. Guess what, rates are now lower than the time frame Geithner seeks to partially blame for our mess. We would be into building a much faster bubble already if investors did not have a healthy dose of fear (and large losses) keeping them in Treasuries or on the sidelines. All we can do is hope fear does keep us from making some repeated dumb mistakes.
http://www.nakedcapitalism.com/2009/05/guest-post-geither-admits-easy-money.html
And for those conspiracy theorists in the group, here is a rather fun cloak and dagger piece about the Bilderberg Group. I would tell you more, but then you would have to be taken care of, if you know what I mean.
http://pensionpulse.blogspot.com/2009/05/will-bilderberg-sink-global-economy.html
We did it to ourselves - to a certain extent.
It is fun to blame the banks, the mortgage brokers, the derivatives market, the credit agencies and the like for all our problems. It is not as much fun to blame ourselves. I (and my wife) are as guilty as the next couple. We like to buy the nice TV, the good vacations, the nice car and so forth and so on. Years ago in the late 90s we put close to $100,000 on credit cards to refurbish an old house we had bought. We thought we could get a loan to do that but we thought wrong, so we borrowed on credit cards. That led to some very touchy times for us and I vowed never again. We were able to sell that house in 2002 for a nice six figure gain, even after paying off credit cards, after just four years, so we escaped that problematic situation. Nonetheless, had housing taken a dive then like it has now I believe we may have walked away.
Now I am not the most sophisticated person on financial matters but I like to think I am smarter than the average Joe, so if I can get in over my head that easy, it is easy to understand how others can. Indeed, in times of easy credit and mortgage brokers throwing money at you, it is easy to get drunk on the power of what credit can buy you. Nonetheless, at the end of the day it is - in most instances - us listening to that little devil on the one shoulder talking us into the good times. We are from a rather decadent couple of decades. Now we must return to the frugality of our parents or grandparents. That is a good thing.
Here is a nice piece from the NY Times on how someone who definitely knows better - a writer on matters economic - allowed himself to get caught up in the luster of what debt could bring him. You can guess the end result:
http://www.nytimes.com/2009/05/17/magazine/17foreclosure-t.html
Bucket Shops
Here is a nice piece from Calculated Risk on an interview of Charlie Munger, Vice Chairman of Berkshire Hathaway. It starts with a good discussion of accounting issues but then goes into a discussion of how the CDS market resembles the Bucket Shops of the somewhat distant past. So what is a bucket shop?
In the early 1900s, there were off-exchange shops that allowed people to bet on the direction of securities they did not even own. Their bets were literally placed into buckets. This in part led to a serious credit freeze and bank panic in 1907. (There are obviously some steps I am skipping here but trust me, it led to problems). In response, various laws were enacted to prevent bucket shops.
By some standards, credit default swaps arguably violated these laws. Oh what to do, what to do? What we do is we enact a new law that makes it clear that CDSs are legal. It was called the Commodity Futures Modernization Act of 2000 and it was passed in the waning days of the Clinton Administration. Basically, CDSs bought to protect actual positions were not a concern (though these might qualify as insurance and should be regulated as such). The concern was for those CDS positions insuring against at default where the holder of the CDS had no risk tied to that default. These potentially might violate bucket shop laws. So we "modernize" these antiquated laws to allow it.
Perhaps before we repeal old laws we should study why they existed in the first place. Then again, I am foolishly thinking politicians have good sound logic to their decision making, as opposed to political considerations. Either way, we have ourselves to blame for this.
http://www.calculatedriskblog.com/2009/05/interview-with-charlie-munger.html
http://www.kioli.org/cafe/LocalFiction/1011/
Only the Shadow Knows!
Of course I am talking about shadow inventory - that group of homes sitting on the sidelines that would be put on the market but for the current conditions. Some of that may sit with banks, some with builders, but a lot is with homeoners looking to sell for whatever reason. Here Calculated Risk notes there is usually about a 6% homeowner turnover each year, i.e. 6% of existing homeowners put their house on the market. Now, in addition to all the existing inventory - around 1o months worth I believe - the number of homeowners "somewhat likely" to "very likely" to put their homes on the market if housing prices improve is roughly 31%. In normal times, that would be six years worth of turn over. In other words, if you expect inventories to go down and prices to start improving a lot, time to rethink.
http://www.calculatedriskblog.com/2009/05/zillow-high-percentage-of-homeowners.html
Especially with unemployment numbers continuing to shoot through the roof.
http://www.calculatedriskblog.com/2009/05/unemployment-claims-continued-claims.html
Did S&P Say That?
The S&P- you know the rating agency that gave AAA to anything that moved - is now saying the banks need more capital than the government is saying and the banking crisis may go on another three or four years. Now some have said the ratings agencies have gone too far the other way due to criticism of their earlier lax ways, but we will see.
http://www.reuters.com/article/newsOne/idUSTRE54C6XL20090513
I agree that the stress tests were a joke for the most part. Others agree. This especially seems to be the case for Citigroup. They seemed to have done extremely well. By some accounts they should have required $63 billion more in capital, not $5.5 billion, and that appears to be based even on the government bogus stress test parameters. Me thinks me smells something.
http://www.time.com/time/business/article/0,8599,1898049,00.html
Time for some inflexion?
There has been some talk lately of inflexion, a term not all people understand. It reflects basically that the speed of decline has slowed. Decline continues but not at the torrid pace it was at. This has to come at some point. Housing prices will not go to zero, unemployment will not go to 100% and the stock market will not lose all value. Eventually each of these will eventually slow in terms of rate of decline. That is basically the point of inflexion.
For those who model, it is an important point. It adds a measure of realiability to their models. In normal times, I believe such models would have a bit more legitimacy. Right now, there is too much prospect for government stimulus to build a false recovery - or at least a false inflexion - so I am not betting on it. We will see.
http://brontecapital.blogspot.com/2009/05/when-stockmarket-does-analysis.html
Disclosures: None.
Wednesday, May 13, 2009
Tough Day
Tough day for the market, tough day for GM and Chrysler dealers, tough day overall. In case you missed it, GM and Chrysler are planning on collectively closing down 1,800-2,000 franchises and the announcement of who is on the chopping block should come out this week. Each of those dealerships - between sales and service - probably employ dozens of people. And there will be knock on effects to those servicing these dealerships with services or products.
Not a good day for the dealers and not a good week for GM stockholders. The stock hit $1.09, its lowest since 1933, in part due to insiders dumping shares.
http://globaleconomicanalysis.blogspot.com/2009/05/1000-gm-dealerships-forced-out-may-15.html
Here is an excellent piece by Tim Duy on why we ain't going back to our spending ways and absent finding a better way to support our GDP, things are not looking pretty. It is what I have been calling the new reality.
http://economistsview.typepad.com/timduy/2009/05/turning-which-corner.html
So there were a couple of troubling economic news items today. Retail sales resumed their decline, albeit at slower rate of decline than in the fourth quarter or the start of ’09. Not what economists had forecast, but with continuing job losses, not all that shocking.
Foreclosures also set a new record last month, after a record the month before. Certain financial institutions had a temporary moratorium on foreclosing (either self or government imposed), though delinquencies continued to mount during the moratorium. Well, the moratoriums are now done so the foreclosures have resumed with a bit of pent up demand in that area coming to light. This is what happens when you kick the can down the road instead of dealing with it. Expect a good bit of REOs hitting the market in months to come, putting further pressure on real estate prices. Couple that with rising unemployment and home prices will continue their decline. More homeowners then under water, more job losses and more people becoming delinquent on mortgages – especially those in the prime category. You can expect to repeat this cycle until we have reached bottom and we are not there yet.
Now individuals are deleveraging and this could be long and dangerous. At the end of the day we will wake up and it will be over. I am not saying we will return to where we were, just that we will get to bottom. Growth from there will be anemic at best. With $10 trillion in wealth drained away, with no easy credit on the horizon and with baby boomers focused more on building retirement than a new car, the good times are gone for a very long time. We need a more sustainable economic model than consumer spending providing 70% of the GDP and being fueled by debt. Until we find that model, many are starting to realize that this will be an L shaped recovery.
For a good read on this, I recommend Sudden Debt.
http://suddendebt.blogspot.com/2009/05/lazarus-market.html
Disclosures: None.
Not a good day for the dealers and not a good week for GM stockholders. The stock hit $1.09, its lowest since 1933, in part due to insiders dumping shares.
http://globaleconomicanalysis.blogspot.com/2009/05/1000-gm-dealerships-forced-out-may-15.html
Here is an excellent piece by Tim Duy on why we ain't going back to our spending ways and absent finding a better way to support our GDP, things are not looking pretty. It is what I have been calling the new reality.
http://economistsview.typepad.com/timduy/2009/05/turning-which-corner.html
So there were a couple of troubling economic news items today. Retail sales resumed their decline, albeit at slower rate of decline than in the fourth quarter or the start of ’09. Not what economists had forecast, but with continuing job losses, not all that shocking.
Foreclosures also set a new record last month, after a record the month before. Certain financial institutions had a temporary moratorium on foreclosing (either self or government imposed), though delinquencies continued to mount during the moratorium. Well, the moratoriums are now done so the foreclosures have resumed with a bit of pent up demand in that area coming to light. This is what happens when you kick the can down the road instead of dealing with it. Expect a good bit of REOs hitting the market in months to come, putting further pressure on real estate prices. Couple that with rising unemployment and home prices will continue their decline. More homeowners then under water, more job losses and more people becoming delinquent on mortgages – especially those in the prime category. You can expect to repeat this cycle until we have reached bottom and we are not there yet.
Now individuals are deleveraging and this could be long and dangerous. At the end of the day we will wake up and it will be over. I am not saying we will return to where we were, just that we will get to bottom. Growth from there will be anemic at best. With $10 trillion in wealth drained away, with no easy credit on the horizon and with baby boomers focused more on building retirement than a new car, the good times are gone for a very long time. We need a more sustainable economic model than consumer spending providing 70% of the GDP and being fueled by debt. Until we find that model, many are starting to realize that this will be an L shaped recovery.
For a good read on this, I recommend Sudden Debt.
http://suddendebt.blogspot.com/2009/05/lazarus-market.html
Disclosures: None.
Tuesday, May 12, 2009
In a Word - Disgustipating!!
I am truly disgusted. The Inspector General of the Federal Reserve Board of Governors cannot tell us where the trillions went. And those that might be able to tell us aren't willing to talk. Just disgustipating!
http://www.nakedcapitalism.com/2009/05/federal-reserve-inspector-general.html
CDS Purgatory!
I have read a few posts over time - and written a few myself - on some of the problems with credit default swaps (CDSs). One of the problems that I have reported is that CDSs act like insurance against credit defaults but, guess what, you do not have something all insurance companies require - an insurable interest. Specifically, if I want to insure my house, no problem because I own it. If I want to insure my neighbor's house, problem. I don't own it and have no insurable interest in it. Yet in the CDS world, the insurers - issuers of the protection - don't seem to care if you have an insurable interest so long as you are willing to pay a premium. So I can insure my neighbor's house, as can everyone in the neighborhood, so when it burns to the ground we will have a party. In the financial markets this means people buying many trillions of default protection against risk they do not have.
Mind you, there is nothing illegal about this or for that matter immoral. It is more business as usual. Yet as with other financial instruments of current vintage, these carry some problems. For example, when a given company has a default event, $100 million in debt may have a billion in protection insuring it. Now the good news is that there are spirals.
What are spirals you ask? Well I do insurance and reinsurance litigation and we ran into this in London in the 1990s with worker's comp policies. Basically, A reinsured B who passed the risk to C who passed it to D who passed it back to A and so it then went back to B and so forth until someone passes it out of the spiral to fall guy. It is a bit different in the CDS world. What happens is A, B, C and D all sold each other CDS protection and now they realize they can cancel out offsetting positions. This process has successfully lowered nominal CDS outstanding values of an estimated $62 trillion (yes, several times global GDP) to - last I saw - about half that. Still a lot, but improvement.
Yet this story is not about this problem with CDSs. It is about a different problem with CDSs that apparently no one anticipated. Let's just say I have $10 million in bonds from Company Z. I am looking to buy CDS protection on that as it is cheap, so why not. I spend, let's say $100,000 up front and another $10,000 a year for five years to protect my bond position. Now the recession hits and Company Z is on the ropes. So much so that it is looking for major concessions from bondholders - like a 70% haircut - to avoid bankruptcy. But if I have insurance for the default, why would I agree to a haircut?
Couple of points to add here. First, when Company Z starts to get into trouble that may trigger collateral requirements on the CDS positions. These contracts are off the grid and individually negotiated so they can say whatever the parties want, but collateral requirements are not rare. Indeed, collateral requirements on CDS positions were a major contributor to AIG's demise. Second, I question to what extent the CDS providers - the people with the risk - are seeking to assert themselves into the shoes of the CDS holder in situations where the holder can take 70 cents on the dollar - basically an assignment or subrogation. If they are not just taking over the credit position, or cannot do so, the buyer of the protection potentially can force Company Z into bankruptcy, get full payment on the CDS and then let the issuer of the CDS stand in line for far fewer cents on the dollar. This is not good for the CDS issuer.
What a wicked web we weave!!
http://www.nakedcapitalism.com/2009/05/credit-default-swaps-holders-likely-to.html
Disclosures: None.
http://www.nakedcapitalism.com/2009/05/federal-reserve-inspector-general.html
CDS Purgatory!
I have read a few posts over time - and written a few myself - on some of the problems with credit default swaps (CDSs). One of the problems that I have reported is that CDSs act like insurance against credit defaults but, guess what, you do not have something all insurance companies require - an insurable interest. Specifically, if I want to insure my house, no problem because I own it. If I want to insure my neighbor's house, problem. I don't own it and have no insurable interest in it. Yet in the CDS world, the insurers - issuers of the protection - don't seem to care if you have an insurable interest so long as you are willing to pay a premium. So I can insure my neighbor's house, as can everyone in the neighborhood, so when it burns to the ground we will have a party. In the financial markets this means people buying many trillions of default protection against risk they do not have.
Mind you, there is nothing illegal about this or for that matter immoral. It is more business as usual. Yet as with other financial instruments of current vintage, these carry some problems. For example, when a given company has a default event, $100 million in debt may have a billion in protection insuring it. Now the good news is that there are spirals.
What are spirals you ask? Well I do insurance and reinsurance litigation and we ran into this in London in the 1990s with worker's comp policies. Basically, A reinsured B who passed the risk to C who passed it to D who passed it back to A and so it then went back to B and so forth until someone passes it out of the spiral to fall guy. It is a bit different in the CDS world. What happens is A, B, C and D all sold each other CDS protection and now they realize they can cancel out offsetting positions. This process has successfully lowered nominal CDS outstanding values of an estimated $62 trillion (yes, several times global GDP) to - last I saw - about half that. Still a lot, but improvement.
Yet this story is not about this problem with CDSs. It is about a different problem with CDSs that apparently no one anticipated. Let's just say I have $10 million in bonds from Company Z. I am looking to buy CDS protection on that as it is cheap, so why not. I spend, let's say $100,000 up front and another $10,000 a year for five years to protect my bond position. Now the recession hits and Company Z is on the ropes. So much so that it is looking for major concessions from bondholders - like a 70% haircut - to avoid bankruptcy. But if I have insurance for the default, why would I agree to a haircut?
Couple of points to add here. First, when Company Z starts to get into trouble that may trigger collateral requirements on the CDS positions. These contracts are off the grid and individually negotiated so they can say whatever the parties want, but collateral requirements are not rare. Indeed, collateral requirements on CDS positions were a major contributor to AIG's demise. Second, I question to what extent the CDS providers - the people with the risk - are seeking to assert themselves into the shoes of the CDS holder in situations where the holder can take 70 cents on the dollar - basically an assignment or subrogation. If they are not just taking over the credit position, or cannot do so, the buyer of the protection potentially can force Company Z into bankruptcy, get full payment on the CDS and then let the issuer of the CDS stand in line for far fewer cents on the dollar. This is not good for the CDS issuer.
What a wicked web we weave!!
http://www.nakedcapitalism.com/2009/05/credit-default-swaps-holders-likely-to.html
Disclosures: None.
Sunday, May 10, 2009
Seven Bad Years
I am not going to post a lot tonight. Long - good - day today and I will be going to bed soon. Yet I want to pass on this post that talks in terms of a recovery over the next year, but then the stimulus bullet is spent and we have a long, lean time ahead. This is one of my biggest fears in today's economy; throwing money at an ailing economy only to have it delivering a temporary benefit. I certainly do not see what we are doing working in the long run, so I suspect the linked article is correct. Yet I hope not. If the article is right on current stimulus not working, I think seven years to recover may be optimistic.
http://www.businessinsider.com/henry-blodget-why-were-still-screwed-2009-5
Before I go, this clip from Saturday Night Live is just sooo special.
http://www.businessinsider.com/henry-blodget-why-were-still-screwed-2009-5
Disclosures: None.
http://www.businessinsider.com/henry-blodget-why-were-still-screwed-2009-5
Before I go, this clip from Saturday Night Live is just sooo special.
http://www.businessinsider.com/henry-blodget-why-were-still-screwed-2009-5
Disclosures: None.
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