While John McCain is mired in message problems about the economy—are the “fundamentals of our economy strong” or are we in “total crisis”—Barack Obama released explicit details about what he’s proposing for the economy. Details below… $1,000 Tax Cut for Middle Class American Families Obama and Biden will cut income taxes by $1,000 for working
September 2008
T-Bill Prices Rally So Much On Uncertainty, Yields Touch Zero Want to loan the US Government money for 3 months? If you bought a 3 month T-bill yesterday, the annual yield you’d earn was .16%. (Notice the decimal place.) The 1 month bill is/was down to 0%. As one bond analyst said, “There’s a lot
Here’s a more detailed version of the Fed’s AIG bailout to follow up our previous post. Quick review: On Monday it was thought that AIG, the world’s largest insurer, needed about $40 billion to meet a wave of claims on credit default swaps and other obligations. The logic went that this would be a bridge
I was lying awake the other night, worrying about all of the debt on my credit card. The jet ski, mink socks, the ATV, my new plasma TV, ruby encrusted dog food bowl, surround-sound stereo – they are great, but darn they cost a lot. And then it dawned on me: it wasn’t my fault!
By holding the bank-to-bank Fed Funds Rate at 2% and the Fed-to-bank Discount rate at 2.25% at their FOMC meeting today, the Fed proved that the financial storm that’s been blowing since August 2007 requires much more than rate cuts. It’s not so much about the price of money right now, but rather the availability
The US Consumer Price Index was down 0.1% in August and up 5.4% year over year through August versus being up 0.8% in July and up 5.6% year-over-year through July. Like last month, this was the largest YOY spike since 1991, and is due mostly to the oil price spike we had during early summer.
Quick history lesson If one looks at previous financial crises, one sees that they generally last longer than one year. Whether it was the Great Depression (1929-1941), the Japanese banking crisis (1990-1999), our S&L crisis (1986-1995), or the Asian Banking crisis (1998-2000), these things take time to work themselves out. People who are accustomed to
Never seems to go too long before republican presidential hopeful John McCain provides another completely valid reason for us to continue with our series on his economic policy meandering. Here’s what McCain said today … The fundamentals of our economy are strong. McCain said this today … one day after Alan Greenspan said this is
Amazon.com WidgetsOK, I’ve been preoccupied since last weekend because my wife and I had our first baby. It was the week between the Fannie/Freddie takeover and the collapse of the entire investment banking industry along with AIG, WAMU bailouts and all kinds of other mayhem. Needless to say, with the new changes at home, I
Consider this list of news for the week (even though it’s only Monday): Best Buy Co. agreed to buy Napster (digital downloading of music) for $121 million. Reddy Ice Holdings (the largest US manufacturer of packaged ice) suspended its quarterly cash dividend indefinitely and said it was undertaking a strategic review of its business. 5,000
Former Fed Chairman and one of the world’s most seasoned economists said that this is the by far the worst economy he’s ever seen. Click link for full report and see video below. Greenspan says that this economy will not rebound until home prices start to stabilize:
We end this week with the latest wave of the credit crunch washing over us. Fannie Mae and Freddie Mac were taken over on Sunday, and as we look forward it’s going to get darker. Lehman Brothers bankruptcy is looming, as is a potential deal where Merrill Lynch gets taken over. And AIG is also
The US Producer Price Index was down 0.9% in August and up 9.6% year over year through August. This is compared to being up up 1.2% in July and up 9.8% year-over-year through July. Like last month, this YOY spike is the largest since the early 1990s, and is due mostly to the oil price
Remember when the mortgage business was fun? People enjoyed their work, and the industry stayed out of the news? When your parents didn’t quite know what you did for a living? When rates mattered more than underwriting guidelines? When we thought that the worst was over – people would liken this to a baseball game
Credit Spreads What is a “credit spread”? It is a yield difference, usually compared to a US Treasury security with a similar maturity, which reflects the issuer’s credit quality. One indicator that the bank could be in trouble is the widening of its credit spreads, evidence that investors believe the debt is riskier. Washington Mutual’s
The trend in the business seems to be to classify lender’s customers into categories. Brokers and lenders alike are grouped, based on pull through, the quality of production, paying fees in a timely manner, and various other metrics. It appears to be very popular, so I decided to try the new Customer Segmentation Program on
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