Several weeks ago, I promised to provide occasional updates about my family’s house-hunting efforts. After nine years living abroad, we’re returning to the U.S. – northern New Jersey, to be exact – in June. As motivated buyers, I figure we’re a rarity in a truly dismal property environment. I’ve just read a column by the WSJ’s Brett Arends detailing the continuing decline in American house prices. In my mypoic view, the most intriguing phenemonenon continues to be the relatively robustness of the New York metropolitan area.
Archive for March, 2009
India PM Manmohan Singh’s comments to the FT – in defense of a chaotically democratic India versus a disciplined but un-free China, are worth a look. Sure, his remarks are profoundly political - coming just days before G20 and weeks before national elections. But they’re also thoughtful, frank and largely true – in effect, helping to prove his point about the long-term merit of doing business with a relatively transparent India compared with a deliberately murky Beijing. Not that it’s an either/or situation in many instances. The FT piece is here: (http://www.ft.com/cms/s/0/d6298d84-1e04-11de-830b-00144feabdc0.html?nclick_check=1
The great analytical minds at RBC Capital Markets know just what to do when they have nothing intelligent to say about the markets they’re paid to cover: Rattle on about the culpability of the news media. I refer to a widely disseminated piece of doggerel from RBC entitled “Asia Focus: Equities tumble, FX safe havens rumble.”
Clearly floundering around to explain why global markets have turned down in recent days, the RBC analysts wonder, “Who jinxed the March rally?” Setting aside the silly “jinx” trope, it’s a solid, if obvious, question. Surely, the RBC sages have the intellectual wherewithal to explain the March market’s dynamics.
Eureka! The royal Canadian bank analysts indeed have the answer: “Journalists were counting their chickens well before they hatched, calling the March equity rally the strongest monthly rally since 1991.”
And who were these egg-counting journos whose allegedly irrational exuberance somehow contributed to the reversal of a broad market upturn?
Err, RBC’s not naming names, citing “last week’s headlines” and a vaguely identified “they” who “clearly did not anticipate a follow-through from Friday’s sell-off.”
Is it at all possible that the happy-days-are-here-again sentiments actually surfaced from the ranks of bank analysts, whereas most journalists (those of my acquaintance, at least) soberly portrayed the market rally as a temporary reprieve amid what can only be a protracted economic downturn?
New to blogging, I can already tell readers will prove to be the most astute editors.
A former colleague is disappointed by my “Brown-Eyed Blame” blog (posted March 30.) In his view, ”complex problems of development and governance are radically oversimplified” as I attempt to refute Lula’s proposition “by substituting a superficially similar” one. (He also detects the “vile” stench of imperialism. Ouch!)
That Lula uttered (yet more) knee-jerk populist pablum is no excuse for any lack of rigor on my part. That said, one would like the world’s leaders to bring a bit more intellectual curiosity and reflection to the table at a time of true crisis.
Economy, Investing, Media, Treasury, Washington / Comments Off
U.S. Treasury secretaries have often made trouble for themselves when they talked about the dollar. The latest example came last week when in the words of the lead paragraph in the relevant Wall Street Journal article “Treasury Secretary Timothy Geithner briefly unsettled currency markets when he appeared willing to entertain a Chinese proposal that an international currency supplant the U.S. dollar as the premier global resource currency.”
Auto Industry, Credit Crisis, Economy, Investing, Washington / Comments Off
As President Obama detailed the stark realities of what’s needed for the survival of two of the U.S.’s largest automakers, stock markets around the world reacted. Investors were concerned about the broad economic ramifications and what this somewhat stand back approach might mean for banks – would he suggest they should/could fail as well? One market remained rather calm – the debt markets for GM’s bonds. People who own and trade bonds, especially corporate bonds, often do very deep analysis of what a company is worth. In most cases there is no question that when an investor lends a company money, that investor will get his/her principal returned with interest for having made that loan. In other words, the company is worth $1 for every $1 you lent. But that’s not the case with distressed debt trading like GM’s bonds, where investors bet on recovery valued. What do they think GM is worth in a bankruptcy scenario?
Auto Industry, Bank Rescue Plan, Bankruptcy, Credit Crisis, Economy, Investing, Politics, Stock Market, Wall Street, Washington / Comments Off
Stocks in the U.S. are following their Asian brethren today, both of which apparently sold off because of concerns over the Obama auto rescue plan. More specifically, hearing that two big U.S. automakers (General Motors and Chrysler) might be better served restructuring through a bankruptcy has spooked the markets. Why? As one of my colleagues in Singapore explained tonight, the markets in Asia took this to mean that maybe the U.S. government doesn’t believe anymore that anyone is too big too fail (meaning the U.S. government might walk away from supporting some of the big financial institutions in trouble. Here’s why that doesn’t make any sense.
Credit Crisis, Economy, Hedge Funds, Investing, Securities & Exchange Commission, Stock Market, Uncategorized, Wall Street, Washington / Comments Off
U.S. hedge fund regulation, round two, has begun.
It’s part of the sweeping financial reglatory proposal recently announced by Treasury Secretary Timothy Geithner. A few years back the industry slipped the noose of increased regulation when a court tossed out a rule requiring these private pools of investment capital to register with the Securities and Exchange Commission. Escape is much less likely this time around.
Auto Industry, Credit Crisis, Economy, Washington / Comments Off
It appears that the Obama administration thinks the Big 3 ought to become the Big 2. In papers released in Washington late Sunday, the administrtion questioned whether Chrysler can survive on its own. While it acknowledges that Chrysler has made some progress under new management, the administration seriously questions many of the economic assumptions and forecasts that the auto-maker has submitted to the government.
Auto Industry, Credit Crisis, Economy, Washington / 1 Comment
It’s a shame it took the Obama administration to oust Rick Wagoner. GM’s board should have done it months, if not years ago. This was a corporate boss who never saw a tough decision he didn’t want to run from, or a critic he didn’t want to slap around. Whether killing superfluous car brands or taking the fight to the UAW – both of which could and should have been done long before the current crisis in the industry – Wagoner failed to step up to the awesome responsibility he had to preserve and protect America’s greatest auto maker.