Thursday, October 8, 2009
When you follow something on a day-to-day basis, or even an hour to hour basis, it is easy to slip into a situation where you "don't see the wood for the trees" and the best way to combat this natural tendency is to zoom out and look at long-term weekly or even monthly charts. So that is what we will do now. (more)
The remarks suggest that banking regulators are girding for a rerun of the housing-related losses now slamming thousands of banks that failed to set aside enough capital during the boom to cushion themselves when the bubble burst. "Banks will be slow to recognize the severity of the loss -- just as they were in residential," according to the Fed presentation, which was reviewed by The Wall Street Journal.
A Fed official confirmed the authenticity of the document, prepared by an Atlanta Fed real-estate expert who is part of the central bank's Rapid Response program to spread information about emerging problem areas to federal and state banking examiners throughout the U.S. (more)
One of the key terms to come out of the nation’s economic meltdown has been “too big to fail.” The government has funneled billions of dollars to large financial firms by arguing that their collapse would deal an irreparable blow to economic recovery. A new study has calculated the tab of the “too big to fail” approach, and it amounts to a far larger taxpayer-funded subsidy than previously thought. The Center for Economic and Policy Research says the bailout has allowed “too big to fail” banks to pay significantly lower interest rates than those paid by smaller banks. According to one estimate, that’s meant a subsidy for the nation’s eighteen largest bank holding companies of $34.1 billion a year. That amount represents nearly half these companies’ combined annual profits. We speak to the study’s author, Dean Baker (more)
After months of slow sales, family businesses are being forced to close, ending legacies and leaving behind a wake of sad customers and loyal employees. "Some family businesses that were just hanging on have said it's time to get out," says Dann Van Der Vliet, director of the Vermont Family Business Initiative at the University of Vermont. (more)
The price of gold is surging on world markets amid fears that the old economic order based on the supremacy of the US dollar could be breaking down.
A new spike has sent the cost of the precious metal to a level not seen before. The dollar slid sharply after yesterday's report in The Independent that Gulf Arab states are secretly planning to stop trading oil in dollars, and a senior UN official said that the US should be stripped of its position as the main source of currency reserves for other countries.
The developments come on top of speculation that the Obama administration is operating a policy of benign neglect of the dollar, engineering a devaluation that could help repair some of the economic damage caused by the recession. (more)
Fascinating New Yorker piece on Martin Armstrong, a technical analysts/cycle forecaster I have been reading about for some time — his is a long sordid tale, but the bottom line is he is in jail.
Its his cycle work that is so fascinating. Nick Paumgarten looks at his attempts to predict the financial markets using numerical patterns — especially Pi — and profiles the strategy Armstrong has used to predict major peaks and crashes of the past thirty years.