Money Supply Growth? Its Much Worse Than That!
Credit Collapsing Faster than it can be created:
Courtesy of St Louis Federal Reserve Bank
Signs of economic of economic weakness abound, despite the massive injections of credit and liquidity.
Deep down inside, I suspect Larry realizes that much of the "boom" from 2002 til '07 was driven by the absurdly cheap money -- and not tax cuts, as has been argued by many on his show. Just about everything from share buybacks to M&A to private equity bids to the Housing boom and MEW driven consumer spending to weak dollar led export boom were functions of ultra-low rates. Now, that cycle has ended, and we are seeing the repercussions of the irresponsible policies of Alan Greenspan.
Friday, December 21, 2007
How is M3 Doing These Days?
It has been quite awhile since we checked in with M3 to see the true growth in the money supply. As the government no longer reports it (in order to save money ROFL*), it has to be constructed manually using the relevant report data. As Barry Ritholz from "The Big Picture" reports, capital is being destroyed faster than credit can be created. It is getting ugly!
Wednesday, December 19, 2007
Tuesday, December 18, 2007
Friday, December 14, 2007
Thursday, December 13, 2007
Thursday December 13, 2007
US Inflation Surges - Biggest Jump Since '73
Central Banks Try to Ease Credit Crisis...
...But Markets Remain Uneasy After Loan Plan
Reuters: Crisis Remains Unabated
Wall Street Headed for Its Own 'Big Bang'
Subprime Mess Moves to Plastic?
Wednesday, December 12, 2007
Tuesday, December 11, 2007
Thursday, December 06, 2007
Wednesday, December 05, 2007
It's Not 1929, but It's the Biggest Mess Since
Steven Pearlstein does an excellent job of explaining the financial mess that has been created and the potential ramifications on the banks and the economy. This is a must read for those trying to understand the underlying problems in the credit markets:
If all this sounds like a financial house of cards, that's because it is. And it is about to come crashing down, with serious consequences not only for banks and investors but for the economy as a whole.
That's not just my opinion. It's why banks are husbanding their cash and why the outstanding stock of bank loans and commercial paper is shrinking dramatically.
It is why Treasury officials are working overtime on schemes to stem the tide of mortgage foreclosures and provide a new vehicle to buy up CDO assets.
It's why state and federal budget officials are anticipating sharp decreases in tax revenue next year.
And it is why the Federal Reserve is now willing to toss aside concerns about inflation, the dollar and bailing out Wall Street, and move aggressively to cut interest rates and pump additional funds directly into the banking system.
This may not be 1929. But it's a good bet that it's way more serious than the junk bond crisis of 1987, the S&L crisis of 1990 or the bursting of the tech bubble in 2001.
Read full article here.
If all this sounds like a financial house of cards, that's because it is. And it is about to come crashing down, with serious consequences not only for banks and investors but for the economy as a whole.
That's not just my opinion. It's why banks are husbanding their cash and why the outstanding stock of bank loans and commercial paper is shrinking dramatically.
It is why Treasury officials are working overtime on schemes to stem the tide of mortgage foreclosures and provide a new vehicle to buy up CDO assets.
It's why state and federal budget officials are anticipating sharp decreases in tax revenue next year.
And it is why the Federal Reserve is now willing to toss aside concerns about inflation, the dollar and bailing out Wall Street, and move aggressively to cut interest rates and pump additional funds directly into the banking system.
This may not be 1929. But it's a good bet that it's way more serious than the junk bond crisis of 1987, the S&L crisis of 1990 or the bursting of the tech bubble in 2001.
Read full article here.
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