Divining Buyer Psychology What’s keeping Buyers from buying? I see three factors operating at the moment: One. Can’t qualify for a mortgage/bad credit. If you don’t have a job, or any money in the bank, you’re not going to get a loan. At least not one from a bank. Sadly, a couple years of grinding...Read More
Is the Fed Repeating Wall Street’s Sins? Joe Nocera: At a certain point, Wall Street ran out of clients to sell [securitized debt] to. So the only way it could keep the machine going was to buy it themselves. Jon Stewart: So, they infected themselves. At the end, they themselves became vampires. [Which suggests] a...Read More
“Certificates of Confiscation” Once Again? Certificate of Confiscation: 1970’s term for bonds, certificates of deposit (CD’s), etc. yielding less than (rising) inflation. How do you get people (and corporations and banks) to stop hoarding cash, and put it to work, stimulating the economy? Reduce interest rates to zero. But what if that still doesn’t do...Read More
Disconnecting the Heart Monitor In my post last week titled, “Approaching the Zero Bound,” I characterized the Fed’s plan to buy hundreds of billions ($600 billion, it turns out) in U.S. debt as a “hypodermic needle to the economy’s heart.” Actually, that analogy is not quite complete. The Fed’s money-injection plan, also known as quantitative...Read More
Laws, Sausages — & Securitized Mortgages Laws are like sausages ” it is best not to see them being made. –Otto Von Bismarck To “laws” and “sausages,” now add “securitized debt,” circa 2004-2008. It turns out that Wall Street’s financial sausage factory was even more toxic and laxly run than previously thought. The latest chapter...Read More
“An Attempted Hypodermic Straight to the Economy’s Heart” A fascinating, even feverish dialogue is taking place right now — joined by some of the financial world’s most influential thinkers — concerning what will happen next week, and what economic consequences will flow from that outcome. The elections next Tuesday? Try, the Fed’s much-signalled intention to...Read More
