Saturday, May 31, 2008

Has the EUR's long term bull market ended?

The EUR has been in a bull market since 2002 but the economic and political fundamentals of Europe are not looking too good these days...and there are some dark clouds on the horizon for this currency when you consider the broader global socioeconomic framework.

EUR chart

Of course, the EUR was a flawed currency from the start (as all fiat monetary systems are) but since its inception the benefits of globalization have masked many of these fundamental flaws. One of the biggest issues is, of course, the one that always causes problems

Thursday, May 29, 2008

Will another large securities firm fail?

A new report from Moody's Investors Service explains that the biggest systemic risk to the $62 trillion credit-derivatives market is not its size and complexity but the potential failure of a large securities firm or investment bank which is acting as a counterparty. A bank collapse could damage the operational integrity and pricing in the credit-default swap market.

Wednesday, May 7, 2008

And Now: Introducing The Positive Side Of Globalization, Economics, & Finance...

It is always important to keep everything in context. At the present moment the majority of people are focused on the "negatives" in our world, and presently, things are indeed negative both politically and economically. It is also important to be objective and see the world as it truly is -- understanding the broader trends over time. In light of that, lets step back and take a look at the big picture - an excerpt from "The Rise of the Rest" by Fareed Zakaria

""The post-American world is naturally an unsettling prospect for Americans, but it should not be. This will not be a world defined by the decline of America but rather the rise of

Tuesday, May 6, 2008

96% of Stockton, CA homeowners who purchased in 2006 are under water

My thoughts: The bottom in housing may not be here yet, and will probably take longer to achieve than most expect. But news like this means we are getting closer....

You bought at the peak of the market. You put next to nothing down. (Maybe you even took out one of those 105% LTV loans to cover closing costs.) Now prices are falling, falling, falling, and you are underwater on your mortgage.

If it’s any comfort, you are not alone

Monday, May 5, 2008

Returns are anything but normal

Much of modern finance and risk management is built on the concept of efficient markets and the "bell curve" or symmetrical normal distribution. However, out in the real world things are a bit different. Over the years many have treated the so called "black swan" events as something that is an anomaly. But when you consider that the economic and political frameworks that comprise our world are severely flawed

Sunday, May 4, 2008

Foreclosure Rage: (former) homeowners take out their anger

Foreclosed homes are being damaged at a high rate as homeowners take out their anger on houses before they are forced to move out, increasing the costs for the banks that take back ownership (because they have to sell at a lower price as the new buyer has to pay for repairs.

Is this just another symptom of an increasingly irresponsible society or is it

Saturday, May 3, 2008

Buffet says Fed did the right thing...

It's probably because he benefits so much from the boom-bust cycles and bailouts that the Fed creates, but Warren Buffet is not bothered by the moral hazard, inflation, and debasement of the dollar

Thursday, May 1, 2008

Warren Buffett To Go Shopping For Bargains

Berkshire Hathaway Inc. Chairman Warren Buffett, who has used dozens of acquisitions to beat every major U.S. stock index, is poised to extend his lead with more than $40 billion to spend as the credit crunch sidetracks other bidders.

With the U.S. on the brink of recession, investors expect Buffett to deploy Berkshire's cash to scoop up bargains