Tag: Wall Street

The G20 summit.

Baseline Scenario publishes an interesting post and triggers a wise comment.

Regular readers of Learning from Dogs will know that we greatly admire the job done by Simon Johnson, James Kwak and others over at Baseline Scenario in debating this global economic crisis.

The comments that flow in are fascinating and often deeply educational.  Not surprising! Baseline Scenario has nearly 12,000 readers!  But many of them show the level of anger and frustration felt by so many.

Anyway, a Post published by them on September 24th reminded me that hope is so much a more profitable emotion than anger.  The Post starts like this,

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The smallest hint of oil surplus leads to a real fall in oil prices

The fragility of the economy shows in many areas.

Last Thursday, the mere hint of a fairly insignificant surplus in U.S. oil reserves pushed down current oil prices and energy-related futures and other speculative plays.

Oil prices have fallen sharply as weak US home sales data and high US oil inventories prompted doubts about a potential recovery in fuel demand. Source: BBC News, 24th September.

Can you imagine the reaction to an announcement of a new source of U.S. oil reserves?  Or of renewed off-shore drilling capacity?  Relaxed EPA standards? Additional refinery capacity?Oil field

Our energy prices would be cut in half and we’d be so much less likely to war with oil-rich nations on whom we now depend for the functioning of our economy and who, indirectly or not, limit our economic and personal freedoms.

By Sherry Jarrell

Unfamiliar territory for stockmarkets

Stockmarkets in very foreign territory

On August 6th, a Post was published on this Blog with the title of This is going to end in tears!

It was prompted by an article by Karl Denninger and a footnote piece from Dave Rosenberg of Gluskin Sheff.

Also included were the US and UK prices for 4th August (about 7am MT) more for my own curiosity than anything else.  They were:

Dow Jones 9295, S&P 500 1,001, NASDAQ 2002, FTSE 100 (now closed) 4671.

By comparison, here are the figures for these markets (all closed at time of writing) for the 18th September.

Dow Jones 9820, S&P 500 1,068, NASDAQ 2133, FTSE 100 5173.

Well another fascinating muse from Mr Rosenberg was in this morning’s inbox and important extracts are below:

Read Rosenberg’s comments

Lehman – 1 year on.

Exactly a year ago, Lehman Brothers filed for bankruptcy.

I shall avoid the temptation of pontificating on the subject as many, many others, far better qualified, will be doing so!Leyman

But two published articles seem to me to be worth visiting, one from October of 2008 from The Economist, and one from The New York Times.

Lastly, a personal comment from friend Dan that shows powerfully how the last year has affected him.

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The Fed’s Bond Purchases and Inflation

Fed’s Kohn on Lessons from Buying Government Bonds….in Britain

Preface:

Recently Dr Jarrell, now a fellow author of this Blog as well as her own, debated the meaning of inflation.  That essay, in three parts, may be found in the list of Essays on the right hand side of this Blog.  This Post is an extract from a recent Post that Dr Jarrell presented on her own site and is presented here with the hope that, following the essay on inflation, this Post is more widely accessible to you, the reader.  Paul Handover.

Do read on

Well that’s clear then!

Conflicting views about the economic outlook

Here are two extracts:

The first from Prof. Nouriel Roubini in his RGE Monitor of today’s date:

A number of economic and financial variables have exhibited signs of improvement recently even if macro indicators are still mixed. The pace of economic deterioration has slowed significantly, and after four quarters of severe contraction in economic activity, RGE Monitor now forecasts that the U.S. will display positive real GDP growth in the second half of 2009. As discussed below, however, that does not mean that the recession in the U.S. is already over, as many analysts have argued. Indeed, all the variables used by the National Bureau of Economic Research (NBER) to date recessionary periods will continue to contract or display sub-par growth. However, RGE Monitor now anticipates that policy measures and other factors will boost real GDP growth, albeit in a temporary manner, in the second half of 2009. Yet the shape of the recovery (will it be V, U or W?) and other challenges will influence the U.S. economic outlook going forward. According to RGE Monitor, growth will remain well below potential in 2010, while the shape of the recovery will be closer to a U.

The second is from David Rosenberg in yesterday’s Breakfast with Dave:

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The sub-prime crisis

British humour

One aspect of British culture is their dry sense of humour.  In terms of satire, for over a decade three people have held pole positions: Rory Bremner, John Bird and John Fortune.  WikiPedia has a very good summary.

Bird and Fortune have also recorded a series of ‘interviews’ focusing on some of the idiocies of life.

Here’s a classic about the sub-prime crisis.  Slightly dated but no less funny for that.

More from these incredibly, clever guys from time to time.

By Paul Handover

The lessons in Chrysler?

Chrysler, investing, entrepreneurism and common sense.

Many, many years ago I went on a course on starting your own business.  It was held in London and caught my eye because just a few months previously I had resigned my sales job with IBM UK Ltd and commenced a journey of being self-employed, in the sense of being responsible for my own income. A 31-year journey that has provided so many riches in a non-financial sense.

Since we are talking about an event so long ago, it is not surprising that few memories are intact about that single day in a smart hotel in the centre of London.

BUT, one thing has stayed with me, and served me well.

Never get involved in a business where you don’t really know the marketplace.

So a recent article in the New York Times (Saturday, 8th August) about Cerebus, the private capital investment company that purchased Chrysler two years ago wasn’t short on lessons for us more down-to-earth guys.  Here’s a extract from the interview that Louise Story with the NYT (cool surname, by the way, for a journalist!) did with Steve Feinberg, co-founder of Cerebus, in his smart office on Park Avenue.

Continue reading “The lessons in Chrysler?” →

Economics ought to make sense?

Why economists seems just as confused as me.

We live in a world where finance and money play a hugely more important role in our everyday lives than, say, 25 years ago.  Well that’s how it seems.  Our energy costs don’t seem to be connected to supply and demand but more in the hands of the speculators.  Our house values have been greatly influenced, perhaps misaligned is a better word, by the availability of too easy money, resulting from exotic financial leveraging. Commodities are, like energy, traded for their own sake rather than to provide an efficient process of linking the grower with the consumer.  And more.

So it comes as a bit of a shock to read in a recent copy of The Economist that most of the theories and economic models are being ‘re-examined’ in the light of the current global crisis.  These theories and models are not esoteric ideas kept

The Economist July 18th 2009
The Economist July 18th 2009

within the scholarly walls of universities but used by Governments, investment institutions and banks so they affect you and I in the real world, big time!

They ought to work a great deal better than they do because they have the capability to harm, as millions have found out in the last 2 years.

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Wall Street porky pies!

Wall Street Analysts Keep Telling Big Earnings Lie

Thus reads the headline of an article, July 30th, on Bloomberg.com.  Written by David Pauly it alleges that Wall Street analysts keep telling lies (porky pies – English expression, do you Americans use it as well?).

Here’s Pauly’s opening paragraph:

At a time when the financial industry’s credibility is at an all-time low, you would think Wall Street’s finest would break their necks providing transparency.

Not so. Stock analysts continue to promote corporate earnings lies, insisting that net income isn’t really what investors need to know.

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