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Archive for December, 2007
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Worst Housing Recession Ever: No End in Sight
Here is the link to the video of my CNBC interview today commenting on the housing and the economy. The best documentary of the year – filmed by my friend Charles Ferguson – is “No End in Sight” on how the US botched – from the very beginning in 2003 – the war in [...]
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The Latest Macro and Financial News Strongly Signal Recession Ahead
The latest macro and financial news confirm that the US is headed towards a hard landing – specifically a serious recession – as a vicious circle of worsening real fundamentals is perversely interacting with severely worsening financial fundamentals and a severe liquidity and credit crunch: – Initial claims for unemployment benefits now at their [...]
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First Results on Holiday Retail Sales: Falling in Real Terms
The first hard data on the retail sales during the holiday season (going from Black Friday until December 24th) are in: excluding spending on gasoline retail sales were up a mediocre 2.4% relative to a year ago; including gasoline they were up 3.6% on the lowest end of forecasters’ expectations. As reported today by the [...]
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Latest Column for Project Syndicate
My latest column for Project Syndicate has been published in a variety of international newspapers. You can read this column below or read it in seven other languages (including Chinese, Russian) at the Project Syndicate web page. I have now the honor to share the Project Syndicate column “Finance in the 21st Century” with Robert Shiller, my former colleague at Yale and [...]
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M-LEC Super-SIV: R.I.P. ….and R.I.P. to the entire SIVs scam
Finally the half baked idea of further fudging the SIV mess by parking some of the toxic waste into a Super-SIV is officially dead: good riddance to a plan that – as discussed here months ago – was conceptually flawed in the first place. Also good riddance to the entire SIVs schemes or scams – [...]
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Interview on CNBC’s Kudlow & Company
Here is a link to my appearance on CNBC’s Kudlow & Company last night debating “Recession or Not?” with Brian Wesbury. Real consumption spending in November was better than expected after flat readings for September and October. But now December looks very weak and will be the weakest holiday season since 2002 when the economy [...]
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It is now time to downgrade the monoliners: a business model that cannot survive without an AAA rating is a business model that cannot fundamentally deserve an AAA rating
Update: Nouriel Roubini will be tonite Thursday on CNBC’s Kudlow & Company at 7pm to debate “Recession or Not?” The shocking and surprising revelation by MBIA – one the leading monoliners, i.e. bond insurers – that it has guaranteed $8.1 billion of collateralized debt obligations repackaging other CDOs and securities linked to subprime mortgages [...]
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Consensus is shifting towards a US recession in 2008 and “recoupling” of the rest of the world
Slowly but surely the overall analysts’ consensus is shifting towards a high likelihood of a US recession in 2008; while a few leading analysts are qualifying that prediction by arguing that the recession will be “mild” rather than severe the call is still one of a recession. First Richard Berner of Morgan Stanley started to [...]
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Central Banks Are Getting Desperate in Dealing with the Liquidity Crunch and Resorting Again to Stealth Reductions in Policy Rates
Central banks are obviously getting frustrated and effectively desperate in dealing with a most severe liquidity crunch that has gotten significantly worse since August. Even last week’s coordinated announcement of central banks monetary injections has done little so far in reducing the Libor spreads (at maturities from two weeks to 3 months) relative to overnite [...]
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Why monetary policy easing is warranted even in the current insolvency crisis
Recently I have been repeatedly asked – by commentators on this blog and others – the following questions: If you rightly believe that the current global financial crisis is one of insolvency and not just of illiquidity and is also due to fundamental incentive problems of financial agents in a world of asymmetric information why [...]
