Phil Gramm, economic advisor to Presidential candidate John McCain, said last month that the U.S. consumer was in a mental recession and that the economy’s fundamentals didn’t warrant the low consumer confidence numbers.
It is hard to comprehend how far off the mark the official GDP numbers are at the present time. So far, with virtually all “non major” headline numbers moving into recession, we have seen the government statisticians skillfully manipulating the GDP figures higher...
For the last 4 weeks, commodity markets have been shredded with prices moving steadily lower across the board. From the July highs, spot Copper is down 17.72%, nearby Gold down 17.03%, Spot Silver down 24.62% and spot Platinum down 26.54%.
It has been one year after the credit crisis took center stage last summer and heralded the market top that took place months later in October. Since that time the markets have begun to do something they neglected to do; begin to price risk into investments.
The credit crisis and stock market roller coaster ride over the last year and a half have introduced many new acronyms many have never heard of before (CDOs, CDS, CLOs, etc.) and brought out the wit of the financial industry.
What a ridiculous sham. Every few weeks the financial community ‘heart beat’ stops for a few seconds to find out what pronouncements will be handed down from the mount at the latest Federal Reserve meeting.
To say there’s been some blood spilt in the energy pits is an understatement. Since the start of the month the S&P energy sector is down nearly 16% while the financial sector is up nearly 7.5%, quite the pair trade during the month of July.
Who hasn’t heard of the Federal Reserve’s vaunted interest rate policy group, the FOMC? We’re all aware that this group is constituted of Fed Governors who meet every-so-often and at the conclusion of their meetings, make an “announcement” regarding their target for short term interest rates or the Fed Funds Rate.
My past three WrapUps have been devoted to counterbalancing the financial Pollyanna folly that the worst is behind us; this will be the fourth.
Financial institutional losses are mounting as mortgage portfolios are written down as home prices continue to decline and foreclosures continue to rise. Highlights from a Bloomberg article shown below illustrate the dire housing situation.