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HomeRick Davis Explains ‘Double Dip’ Dynamics
Posted by Larry Doyle on July 15th, 2010 7:30 AM |
Are you sitting down?
Rick Davis recently wrote, “Unless the economy begins to pick up quickly, a double dip is likely — with the second round milder but lingering longer than the first.” How can our Sense on Cents Hall of Famer make this projection?
Rick sheds tremendous insights on the credit contraction ongoing and seemingly worsening in our nation’s economy. Davis paints a cogent picture as to how we are within weeks of the 2010 economic slowdown being worse than the 2008 recession at the same point in the cycle. You think I’m exaggerating? Hats off again to the fabulous work done by Rick Davis at Consumer Metrics Institute. Let’s navigate.
July 13, 2010 – Behind the Credit Numbers:
During the past week there has been a flurry of Federal Reserve reports and commentary concerning the levels of credit in the current economy. The two most notable were: (more…)
Fed Minutes Flashing Caution
Posted by Larry Doyle on July 14th, 2010 3:24 PM |
The Federal Reserve just released the minutes from a June 22-23 meeting and an early May conference call. The Fed as an institution is always careful in its delivery, but in reading through their tea leaves this afternoon I sense concern on the Fed’s part of a real slowing, if not a double dip, in our economy. A summary of the Fed minutes includes the following highlights:
FOMC participants’ forecasts for economic activity and inflation suggested that they expected the recovery to continue and inflation to remain subdued, but with, on balance, slightly weaker real activity and a bit lower inflation than in the projections they made in conjunction with the April 2010 FOMC meeting. (more…)
Report Points to Double Dip in Housing
Posted by Larry Doyle on July 14th, 2010 2:01 PM |
While economists and analysts are aggressively debating whether our nation’s overall economy is poised for a double dip, one firm is not bashful in highlighting that our housing market specifically is beginning to slide down the slippery slope of a double dip. Thank you to our friends at 12th Street Capital for bringing this report to our attention.
Housing Wire, a leading financial website providing news on the mortgage market, highlights the following report, Economist Reports the Housing Market Double Dip Is Beginning:
Toronto-based Capital Economics, an independent macroeconomic research firm, said Tuesday that a double dip in the United States housing market is now materializing. (more…)
America Speaks Its Mind in Bloomberg National Poll
Posted by Larry Doyle on July 14th, 2010 6:09 AM |
Will the financial regulatory reform measures soon to be passed on Capitol Hill prevent another economic crisis? No, that is not a trick question.
An overwhelming percentage of Americans have little to no confidence that the proposed financial regulatory reforms will prevent another crisis. That gem, and many others, are included in a recently released Bloomberg poll. A brief overview of the poll results is displayed in the following chart (click on image to enlarge):
I STRONGLY encourage you to delve deeper into the poll questions. On a number of the questions, I found myself saying, “Wow, are you kidding me..” as to the strength of feelings and emotions running through our nation today. (more…)
Boston Fed President Concerned About Economy and Deflation
Posted by Larry Doyle on July 13th, 2010 2:50 PM |
Nothing like a cold shower from a fellow Bostonian to dose the spirits of what has been a solid 5% rally in the markets over the last week. To what do I refer? Boston Fed President Eric Rosengren sends a cold shiver across the bow of our economic landscape in a recent interview with The Wall Street Journal.
Rosengren specifically sends a note of real caution in terms of his economic outlook, concerns about deflationary trends, a lack of improvement on the jobs front, and the potential need for more quantitative easing on behalf of the Fed. This interview is relatively brief, but it provides a wealth of sense on cents. (more…)
Bill Gates Attacks Fraudulent Accounting for Public School Pensions
Posted by Larry Doyle on July 13th, 2010 9:55 AM |
Bill Gates
Isn’t education supposed to be about the kids? Then how has our nation allowed political operatives in states, cities, and towns throughout our land to develop and manipulate accounting standards to benefit public employees within our school systems at the expense of our future generations?
Go ahead and rail on me as just another fiscal conservative who does not fully appreciate the dynamics of public education, especially in urban settings. I will respond with a strident, CHALLENGE!! Why? (more…)
Are Fannie and Freddie Going to Sue Wall Street?
Posted by Larry Doyle on July 12th, 2010 3:21 PM |
Are there some dark legal clouds beginning to hover over the Wall Street landscape? How so? The threats of impending lawsuits are never a forecast any individual, entity, or industry care to entertain. Like it or not, Wall Street is beginning to get some ground cover in the forms of pending legal actions.
While a large mortgage investor, Cambridge Place Investment Management, recently filed a complaint against virtually every firm on Wall Street in the Massachusetts courts, today we see none other than our ‘wards of the state’ Fannie Mae and Freddie Mac preparing the initial steps to bring suit against Wall Street. Could it be possible that Fannie and Freddie would sue Wall Street? Is a potential lawsuit political cover for Uncle Sam? Who knows? (more…)
Cambridge Place Drops Napalm on Wall Street
Posted by Larry Doyle on July 12th, 2010 7:10 AM |
To this point in our economic crisis, Wall Street and Washington have utilized the ‘perfect storm’ excuse to cover themselves from investors’ cries of negligence, incompetence, and potentially corruption. Despite those cries, America has seen few, if any, credible and comprehensive legal complaints brought on behalf of investors. Select investor suits have largely been adjudicated on behalf of the defendants, those being Wall Street banks and brokers, under the mantle that sophisticated investors are responsible for all investment analysis and live with the consequences. Will Wall Street always be accorded the cover of ‘caveat emptor’? If so, then our markets are a much riskier proposition than most investors would appreciate.
I have been surprised to this point that more investors have not filed suit against Wall Street banks for willful and wanton misrepresentation of risks in the underwriting of an array of securities. Well, I am surprised no longer as a large mortgage investor, Cambridge Place Investment Management based in Concord, MA, recently dropped a napalm bomb on Wall Street. (more…)
