Combustible Mix The severity of this economic downturn is rooted in the household leverage crisis, which in turn is closely related to the housing market. If the housing market continues to deteriorate, then further de-leveraging of the household sector will likely keep a lid on any rebound in consumption. In other words, the future of...Read More
Swimsuits and Tides Today’s recession-slash-financial crisis may not have a name yet, but it clearly has a signature parable: Warren Buffett’s now-infamous observation that “you don’t know who’s swimming naked until the tide goes out.” If you’re looking for a bookend, it would be Buffet’s equally famous pronouncement that credit derivatives are “financial weapons of...Read More
