Con-tango

August 17, 2007
In Economy, Views
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The pivot

I just finished reading The game is up from The Economist.

If these securities are now downgraded, banks could be forced to
offload lots of illiquid instruments into a falling market—one of the
fastest ways to lose money yet devised. But if there are no buyers,
banks may have to sell something else to shore up their balance sheets.

April 9, 2007
In Economy, Views
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China; a runaway train

Two reports from Bloomberg on China caught my eye this weekend:

April 2, 2007
In Economy, Views
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The vultures are here

Vulture Bearded.
Source: vultures. homestead.com

Banks and hedge funds get ready to take over the coming wave of distressed institutions…

April 2, 2007
In Economy, Views
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The tipping point

The 300 movie. Spartans pushing Persians off a cliff.
Source: gamespot.com

Reading Bloomberg’s headlines today brought a chill down my spine.

China Calls U.S. Import Tariffs `Unacceptable,’ Affirms Right to Respond

Dollar Falls Against Euro, Yen as U.S. Adds Tariffs on Imports From China

U.S. Stocks Fall on Housing, Rate Outlook, Leaving Dow With Quarterly Loss

European Stocks Decline on U.S. Economic Reports, Led by Axa and Lafarge

U.S. Treasury 10-Year Notes Drop for Second Week on Concern About Economy

European Government Bonds Drop for Second Week on Interest Rate Concerns

Asian Stocks Fall This Week on U.S. Economic Outlook; Sony Leads Declines

EU Calls For `Immediate’ Release of 15 U.K. Troops Seized by Iran in Gulf

Bush Says the Democrats Are Pursuing `Reckless’ Tax, Spending Policies

Are we at the brink of a recession? Or worse?

February 7, 2007
In Economy, Views
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The yellow submarine

The Yellow Submarine. Courtesy of Howie Green.

I’m loving this post already. So many fond memories…

First, the music,

Then, the lyrics, courtesy of sing365.com…

[…]

We all live in a yellow submarine,
Yellow submarine, yellow submarine,
We all live in a yellow submarine,
Yellow submarine, yellow submarine,

weird sounds

As we live a life of ease,
Everyone of us has all we need (has all we need)
Sky of blue (sky of blue) and sea of green (sea of green)
In our yellow (in our yellow) submarine (submarine. Blaha)

We all live in a yellow submarine,
Yellow submarine, yellow submarine,
We all live in a yellow submarine,
Yellow submarine, yellow submarine,

[…]

So appropriate for the subject at hand, the case of global market liquidity.

February 6, 2007
In Economy, Views
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Continuing with my previous post, a salient feature which has allowed Morgan’s pirate traders to make trillions of USD is the fact that they have shown their abilities to navigate a deep sea of liquidity, with low volatility winds.

February 5, 2007
In Economy, Views
3 comments

How to become a billionaire

Japanese Yen.
Courtesy of Bank of Japan Currency Museum.

Ok,
so I mistakenly thought the US real GDP for 2006 was going to be lower,
2.5 %, and it surprised with a high of 3.4 %. Then, what was it that
compensated the loss of growth in the US housing slowdown? From the latest BEA report and
looking at the fine print (Table 2), we find that the relevant items
with contributions above the 2005 GDP are:

The export of goods with a
0.24 % contribution,
government expenditures (mostly at the state
level) with 0.23 %,
and a surprising cleanup in US inventories to the
tone of 0.56 % …

…Christmas sales went well… and the states helped with some extra spending.

But, looking around for an excuse to my… blindness, I ran into the whopping sums that the US financial sector is harvesting around the world
–which I found a lot more interesting.