Over the next few years, a wave of commercial real estate loan failures could threaten America’s already-weakened financial system. Commercial loan losses could jeopardize the stability of many banks, particularly the nation’s 2,988 mid-sized banks that have these dangerous concentrations in commercial real estate lending and, as such, as the damage spreads beyond individual banks, contribute to prolonged weakness throughout the economy. In fact, between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the end of their terms - and nearly half are “underwater” already. Words: 987
Read More »Will Sovereign Debt Tsunami Drown All the PIIIGS and Then the US and UK?
With all the attention being focused on whether or not there will be a sustainable recovery in 2010, the potential for a wave of sovereign-debt crises following the wake of the global recession has just recently started to appear on people's radar screens - and such a wave should not be surprising. Words: 2541
Read More »"Applied Value Investing" – A Book by Joseph Calandro
Being afflicted with an Austrian outlook can turn many a would-be investor into a permabear. Indeed, if I were truly a hardcore advocate of Austrian investing, my only assets would be a shotgun and a bag of gold because, up until now, I have never come across any writing that attempted to weld Austrian thought onto an investment framework. Words: 953
Read More »"Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable" – A Book by Mark Gilbert
"Complicit" is a rousing, fun look back at the credit crisis filtered through the mind of someone who labored in the center of it. Ending the story much the same way the boom ended for so many a greedy, blinkered little pig — by giving you the middle finger abruptly and without a hint of premonition — only highlights the talent that makes "Complicit" such an enjoyable read. It is a tour of almost-impossible-to-believe tales of greed, stupidity, and woe across eleven short, engaging chapters. Words: 1446
Read More »The U.S. Trade Imbalance – A ‘Deficit Without Tears’? (+2K Views)
There is a definite connection between fiat currencies and trade deficits. Critics of the Federal Reserve are right to blame it for distorting trade flows and setting the U.S. economy up for an inflationary crash. However, a trade deficit per se is not a sign of a bad economy. Indeed the trade deficit might blossom if the U.S. ever returned to the gold standard, though it would be due to a productive net inflow of producer goods. Words: 1667
Read More »Volcker: Tax Hikes Likely Needed to Tame Deficit
The United States should consider raising taxes to help bring deficits under control and may need to consider a European-style value-added tax and a carbon or other energy-related tax may become necessary says White House adviser Paul Volcker. Words: 758
Read More »"The Pinch: How Baby-Boomers Took Their Children's Future and Why They Should Give it Back" – A Book by David Willetts
Oh the shame of being a baby boomer. What a bunch of shysters we seem to be. We are the most selfish, greedy, job- hogging, pension-grabbing bunch of egomaniacs history has ever seen. Here we are, cackling to ourselves in our overpriced homes and exploiting our political power to shaft the younger generation. We use our demographic throw-weight to skew the welfare system in our favour and above all we are squandering the natural resources of the planet. You know that Goya picture of the giant eating a naked human being? That's us, all right – Saturn devouring his children. Or at least, that is the portrait presented by David Willetts in his new book, "The Pinch-How Baby-Boomers Took Their Children's Future and Why They Should Give it Back". Words: 759
Read More »Here's the Best Way to Protect Against both Inflation AND Deflation
There are very compelling arguments for both inflation and deflation. The answer will eventually depend on decisions made in Washington and how people react to those decisions. For now, let’s stop fooling ourselves and admit that we don’t know. It is a problem that has to be dealt with and there is no easy medicine. Either path will be painful, but that’s what we get for our two and a half decade debt binge. Words: 1142
Read More »These Three Indicators Indicate Recession Receding
Three key indicators have suddenly broken trend over the last few weeks/quarter. It appears that the economic landscape has shifted. One major change is interesting. Two could be a coincidence. When three points like this connect, it's worth paying attention. Words; 324
Read More »Why Interest Rates Will Explode Higher Starting Later in 2010
Financial pundits have been cheering the declining U.S. trade deficit, but they should be careful what they wish for. Once the U.S. is no longer running a huge trade deficit, then all those exporter nations will no longer have hundreds of billions of dollars floating around, looking for a home in Treasury bonds. Interest rates are about to start rising, and will continue rising for a generation Words: 782
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