China has drones. Now what? http://t.co/ZwOUNYdtgj
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Archive for November, 2007
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Finally moving from a case-by-case to an across-the-board approach to mortgage restructuring
This author spent a few years of policy wonkdom working on financial crises in emerging market economies and how to resolve them; and eventually he wrote – with Brad Setser – a book about it. The crisis resolution issues faced by emerging markets (Mexico, East Asia, Russia, Brazil, Argentina, Turkey, Uruguay, etc.) were similar to [...]
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The Bernanke Put and the Last Legs of the Stock Market Sucker’s Rally
How sharply will the US stock market fall if the US experiences a recession? Given the recent flow of very negative macro news, the likelihood of a US hard landing has sharply increased; thus, it is important to assess the implication of such growth slowdown, hard landing or outright recession on the stock market. It is true that [...]
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The Stealth Public Bailout of Reckless “Countrywide”: Privatizing Profits and Socializing Losses
The letter by Senator Schumer questioning the $51.1 billion that Countrywide borrowed from the Federal Home Loan Bank system (specifically the Federal Home Loan Bank of Atlanta) has finally revealed the little dirty secret – that was known only to a few insiders and was noticed on this blog a month ago – that Countrywide, [...]
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Liquidity and Credit Crunch in Financial Markets is Back to Summer Peaks, Only Much Worse and More Dangerous
There is now increasing evidence that the liquidity and credit crunch in international financial markets is back to its summer peaks of August and, in most dimensions, even worse than in the summer; financial markets are now in a “virtual panic mode” according to a market participant (as reported by the FT). This worsening of [...]
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Recoupling rather than Decoupling: the Forthcoming Contagion to China, East Asia and Emerging Markets
This analyst started arguing against the “decoupling” hypothesis in the summer 2006; see 12 Reasons Why the World Will Not De-Couple From the Coming U.S. Growth Slowdown…Or “Why When the U.S. Sneezes the World Gets the Cold”…and The Fairy Tale that the World Will “Decouple” from the Coming U.S. Recession… I elaborated my views [...]
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Financial Times’ Alphaville on a “Generalised Systemic Financial Meltdown”
The Financial Times’ Alphaville column comments today on my prediction of a “generalised systemic financial meltdown” . Here is what the FT says: Stand by for “generalised systemic financial meltdown” “Gold is for optimists. I’m diversifying into canned goods.” So said one reader on Felix Salmon’s Market Movers blog, in response to a post on [...]
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CNBC Interview on Housing and Mortgage Bloodbath
I appeared on CNBC today for an interview on housing. News on the housing front are getting worse, not better. Housing starts were up 3% but building permits, a much more important leading indicator of future housing starts, were down a whopping 6.6%. So, starts will fall more in the next few months and the [...]
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Global Recoupling Rather than Decoupling as the US Heads towards a Recession
Now that the risk of a US hard landing – recession – has become very high the debate on whether the rest of the world can decouple from this US hard landing is returning. In my view this debate on decoupling (this writer argued against the decoupling hypothesis already in mid 2006) is partly [...]
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With the Recession Becoming Inevitable the Consensus Shifts Towards the Hard Landing View. And the Rising Risk of a Systemic Financial Meltdown
It is increasingly clear by now that a severe U.S. recession is inevitable in next few months. Those of us who warned for the last 12 months about a combination of a worsening housing recession, a severe credit crunch and financial meltdown, high oil prices and a saving-less and debt-burdened consumers being on the ropes causing an [...]
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Two Interviews on CNBC on FASB 157: Or Being Forced to Price Radioactive Toxic Waste at Market Values
This author appeared twice this week on CNBC to discuss the outlook of the US economy, the implementation of FASB 157 and how it will force financial institutions to recognize a much larger size of losses from impaired assets (RMBS, CDO, leveraged loans, etc.). So far banks and other financial institutions have recognized losses only [...]
