U.S. Launches New Assault on Consumer Recession, Backtracks on Toxic Mortgage Assets Bailout

The United States is now waging an all-out war against clogged credit markets and attacking each troubled artery head on. Earlier this week U.S. government officials announced a new plan to pump $800 billion dollars into the rapidly contracting economy by injecting funds into distressed credit markets where banks remain reluctant to lend and continue to hoard cash. Unprecedented, this latest sa...

Sweet Returns in a Commodity Crash

This year has been anything but sweet for commodities investors. Since peaking in mid-July, the Reuters-CRB Index has crashed a cumulative 48% with every constituent of the index down sharply – except sugar. To be sure, another formidable commodity is also holding up relatively well in the Panic of 2008 -- gold. Though down 2% this year that’s far better than just about every other asset class ...

U.S. and German Bond Yields Plunge, Signal Deflation

The only bull market these days lies in the Treasury bond market. While virtually all other assets have plunged in value in a miserable 2008 for investors, T-bonds remain highly bid amid a rapidly contracting American economy. The benchmark ten-year Treasury bond opens this morning yielding 2.97% -- the lowest yield since the late 1950s and breaking the previous post WW II low of 3.29% set in J...

U.S. Bailouts Now Total Almost 35% of GDP

First it was the banks. Then Fannie Mae and Freddie Mac followed by AIG, Citigroup and now possibly auto companies, the home builders and the legacy airlines. Increasingly, the American government is becoming Corporate America’s largest investor. And with that big shareholder responsibility comes a new wave of government regulation in 2009 as Congress moves to unseat greedy banking executives a...

Fed Launches New Assault with $800 Billion to Unclog Credit

The Federal Reserve this morning announced new plans to unclog credit markets as the economic recession continues to deepen across the country, stifling bank lending and resulting in widespread hoarding of cash. The Fed announced two new efforts to unfreeze credit for homebuyers, consumers and small businesses, committing up to $800 billion dollars. The move is timely as LIBOR rates ratchet hig...

Market now in No Man’s Land; Buyer Beware

Despite Friday’s big 500-point surge, the Dow and all other U.S. indices remains hostage to the consequences of major technical damage inflicted last week. U.S. stocks broke important support levels starting on Thursday with equities touching 5 ½ year lows. Bonds, a safe haven since last year, saw benchmark Treasury yields crack new multi-year or multi-decade lows. Ninety day bills, for example...

Let Detroit Die and Revive TARP’s Original Mandate

Since September 1, the S&P 500 Index has now crashed a cumulative 39% -- the worst decline since 1931 for common stocks in the United States. The MSCI World Index over the same span has been pummeled more than 45% -- its worst year since 1974. The latter benchmark was created by Morgan Stanley back in 1969. There isn’t one index in the world that has posted a gain in a miserable 2008. Decli...

Bears Gone Bulls Badly Hit since late October

The S&P 500 Index and other major U.S. indices violated important support levels on November 19 suggesting the market is now poised to break its October 2002 lows. The S&P 500 Index is now down 45% in 2008 – its worst year since 1931. Several high profile hedge funds and traditional equity fund managers turned bullish on stocks following the crash in October. Through yesterday, these ad...

More Countries to Impose FX Controls

Indonesia announced foreign exchange controls last week, triggering the first round of restrictions or limits on foreign currency trading. Other nations are sure to follow as economic growth falls off a cliff this quarter compounded by plunging exports. As the global financial crisis deepens and spreads to the real economy, more countries will resort to protectionist policies in the emerging ma...

More Countries to Impose FX Controls

Indonesia announced foreign exchange controls last week, triggering the first round of restrictions or limits on foreign currency trading. Other nations are sure to follow as economic growth falls off a cliff this quarter compounded by plunging exports. As the global financial crisis deepens and spreads to the real economy, more countries will resort to protectionist policies in the emerging ma...