Article I wrote for the Scotsman Guide Dec issue.

Posted on November 30, 2012 by Brent Nyitray

http://www.scotsmanguide.com/default.asp?ID=5341

Filed under: 2013 and beyond, Economy, Federal Reserve, Financial Crisis, Foreclosure | 18 Comments »

Whew!

Posted on November 7, 2012 by Michigoose

well, jnc4p  was prescient.  And I’m glad it was as relatively clear cut as it was last night, in that Florida is still deadlocked but, as yello points out, irrelevant.  What do you want to see happen in the next four years–and for purposes here let’s not say gridlock (although I know a couple of you think that’s a good thing when it comes to federal government!  :-))

I, for one, am very glad that the PPACA is safe. . . although it’s too much to hope that it can be modified.  I’d like to see the DREAM Act actually become law and I’d like to see one actually liberal Justice get appointed to the SCOTUS.  I’m sure I’ll come up with more as the day goes on.

Plus, what happened with your various states?  I see that pot is now legal in Washington and Colorado (and that last I’m betting had something to do with CO going for Obama last night).

And about that fiscal cliff. . .

Forward!

P.S.  And I’m very glad that ATiM is around to see it happen.

Filed under: 2012, 2013 and beyond, Congress, Elections, Financial Crisis, Open Thread | 92 Comments »

Morning Report

Posted on January 27, 2012 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1308.3 -7 -0.53%
Eurostoxx Index 2435.3 -25.060 -1.02%
Oil (WTI) 99.35 -0.350 -0.35%
LIBOR 0.5511 -0.002 -0.36%
US Dollar Index (DXY) 79.356 -0.041 -0.05%
10 Year Govt Bond Yield 1.92% -0.01%

Markets are weaker on a lower-than expected GDP report.  4Q GDP came in at 2.8% vs street expectations of 3%.  Consumption and prices were lower than expected as well.  No major news out of Europe.  EURIBOR  / OIS continues to fall – it is now at 77.5 basis points.  Remember, 20 bps is more or less post-crisis “normalcy”  Pre-crisis normalcy was closer to 7 bps. Note the flat line before mid-2007 and then the spike in 2008.  People forget that the crisis began a year before Lehman.  Looking back, I remember the crisis began when the banks were stuck with a hung bridge on the Boots LBO.  Should have sold everything that day.

Chart:  EURIBOR / OIS

The WSJ has an editorial today on the Fed, which I believe nails it.  It notes the disconnect between obama’s view of the economy and the FOMC’s view.  But, the quote that says it all is this:

“One problem with all of this was pointed out yesterday by Kevin Warsh, who as a Fed governor sat on the FOMC until early last year. Speaking at Stanford, Mr. Warsh said that “exceptionally accommodative monetary policy” has its uses in a crisis or recession. But the Fed’s “recent policy activism—measures that go beyond a central bank’s capacity or traditional remit—threatens to forestall recovery and harms long-term growth.”

That’s a useful warning for markets to hear. Consider that Mr. Bernanke’s transparent goal is to drive down long-term interest rates to reduce mortgage rates to reflate the housing bubble. But intervening so directly to keep rates artificially low has made the bond market useless as a price signal or indicator of risk across the larger economy.”

As others (John / Banned) have noted, low interest rates are not “free.” They are the equivalent of sticking a penny in the fuse box.  They may make the immediate problem go away, but they mask the underlying issues, and set yourself up for a major fire later.

In earnings this am, Ford missed and DR Horton beat.  D.R. Horton is cautiously optimistic about Spring.

Filed under: Earnings Announcements, Economic data, Economy, Federal Reserve, Financial Crisis | 92 Comments »

Morning Report

Posted on January 18, 2012 by Brent Nyitray

Vital Statistics:

Last Change Percent
S&P Futures 1292.7 3.4 0.26%
Eurostoxx Index 2397.8 1.190 0.05%
Oil (WTI) 101.93 1.220 1.21%
LIBOR 0.5612 -0.001 -0.20%
US Dollar Index (DXY) 80.634 -0.480 -0.59%
10 Year Govt Bond Yield 1.85% 0.00%
Futures are up slightly on earnings and a lack of market-moving news out of Europe. Bond geeks will note that EURIBOR / OIS (a measure of stress in the banking system) has been moving lower since the year began. It is at 84 basis points, having dropped from 101 basis points six weeks ago. ECB funding probably explains some of it, but it is a welcome sign and helps explain the more sanguine mood of Mr. Market recently.
Goldman reported better than expected results this morning based on cost cuts. Compensation fell 21% and staff decreased 7%. On cue, William Cohan was on Bloomberg TV this morning complaining that Wall Street comp is still 50% too high. US Bancorp also reported better than expected earnings.
The Producer Price Index came in a little hot, but still subdued. PPI ex food and energy was up .3% MOM and 3.0% YOY. Inflation is still a non-issue as far as the Fed is concerned. Tomorrow will be a big economic day with CPI, Housing Starts and Initial Jobless Claims. No report tomorrow as I will be in the city all day.
EDIT:  More bullish economic data:  Capacity Utilization increased again to 78.1% and the NAHB Homebuilder sentiment index increased to 25, confirming what the homebuilders have been saying on their conference calls.

Filed under: Earnings Announcements, Economic data, Economy, eurozone, Financial Crisis, Homebuilding, Morning Report, stock market, Wall Street | Tagged: | 49 Comments »

"Boomerang"

Posted on October 5, 2011 by Arcanaut

Jon Stewart interviews author Michael Lewis.

Part One:
Part Two:

Filed under: Financial Crisis | Tagged: , | 6 Comments »