Information about finance, the economy and business. Entertaining and informative. Seeking Alpha Certified Mark Sunshine Chairman & CEO

Archive: Nov 2008

  1. Money Supply and Economic Data Weekly Watch – Not All Savings Is Good Savings

    Sav­ings increased but for the wrongs rea­sons The per­sonal sav­ings rate in Octo­ber was esti­mated to be 2.4% which was an increase of 1.4% from September’s sav­ings rate.  Nor­mally, dur­ing peri­ods of ris­ing unem­ploy­ment and increas­ing eco­nomic hard­ship the per­sonal sav­ings rate declines because some house­holds spend more than they earn. When con­sumers are con­fi­dent about […] [read full story]

    Posted in: Black Friday, Federal Funds Rate, Federal Reserve, Finance, Liquidity Trap, M2, Money Supply, PCE Price Index, Retail Sales, Savings Rate
  2. Really Good Analysis By A Really Smart Guy

    Paul Krug­man won the Nobel Prize for Eco­nom­ics because he is a really smart guy who often says and writes incred­i­bly insight­ful things. On Novem­ber 20th he wrote an arti­cle for the New York Review of Books titled What To Do Now that pro­vides a great frame­work for under­stand­ing the cur­rent cri­sis and what gov­ern­ment […] [read full story]

    Posted in: Depression, economy, Finance, Paul Krugman, Politics, Public Policy
  3. CPI Indicates" rel="bookmark">Money Supply and Economic Data Weekly Watch – Deflation Is Worse Than CPI Indicates

    Last week’s eco­nomic data is under­es­ti­mat­ing defla­tion. On Wednes­day the Bureau of Labor Sta­tis­tics (“BLS”) announced that the con­sumer price index (“CPI”) declined by 1.0% in Octo­ber which was the biggest sin­gle one month reported decline since before World War II. Broad based defla­tion exac­er­bates the already severe credit cri­sis and increases cash hoard­ing by […] [read full story]

    Posted in: BANKS, BLS, Business Environment, CPI, Credit Crisis, Deflation, Economic Statistics, economy, Federal Funds Rate, Federal Reserve, Finance, Fiscal Policy, GDP, Inflation, Liquidity Trap, M2, monetary policy, Money Supply
  4. Credit Default Swaps Are Going To Annihilate Main Street

    War­ren Buf­fet called credit default swaps “weapons of finan­cial mass destruc­tion” and they are about to anni­hi­late Main Street.  In a dis­turb­ing new trend, money cen­ter banks are “weaponiz­ing” credit default swaps (“CDS”) by using the trad­ing price of a borrower’s CDS to adjust the borrower’s inter­est rate.  Unfor­tu­nately, banks don’t under­stand that they are […] [read full story]

    Posted in: BANKS, Credit Crisis, Credit Default Swaps, Finance, Wall Street Journal
  5. Why Hasn’t Treasury Worked Out A Program For Resolution of Non-Bank Financial Institutions?

    I don’t under­stand why Trea­sury hasn’t put in place a com­pre­hen­sive plan for the res­o­lu­tion of failed non-bank finan­cial insti­tu­tions. Paul­son and Bernanke said that they were work­ing on a pro­posal after the Bear Stearns col­lapse and that a frame­work for res­o­lu­tion of non-bank finan­cial fail­ures was needed imme­di­ately. But 8 months later the world […] [read full story]

    Posted in: BANKS, Bernanke, Business Environment, Credit Crisis, Economic Statistics, economy, Finance, Paulson, Politics, Regulatory Reform, Willem Buiter
  6. The Argument For A New Fiscal Stimulus Bill

    I believe that another fis­cal stim­u­lus bill is going to be passed by Con­gress and signed into law by either Pres­i­dent Bush or Pres­i­dent Obama (obvi­ously after his inau­gu­ra­tion). Fis­cal stim­u­lus is the most likely way that the gov­ern­ment will be able to stop the rapid decline of the econ­omy caused by the hoard­ing of […] [read full story]

    Posted in: Credit Crisis, Economic Statistics, economy, Finance, Fiscal Policy, Politics, Robert Reich
  7. Money Supply and Economic Data Weekly Watch – It’s A Brave New World For Federal Funds

    It’s a brave new world for Fed­eral Funds. The actual rate that Fed­eral Funds were trad­ing at last week was 0.23% despite the Tar­get Fed­eral Funds Rate being 1.00%. This anom­aly could be sig­nal­ing the end of the era when Fed­eral Reserve pol­icy is expressed in a sin­gle num­ber, the Tar­get Fed­eral Funds Rate. Tech­ni­cal […] [read full story]

    Posted in: BANKS, Bernanke, Economic Statistics, economy, Federal Funds Rate, Federal Reserve, Finance, LIBOR, M2, monetary policy, Money Supply
  8. How the Credit Crisis Might Help American Manufacturers — A Reprint Of The New York Times Economix Blog

    How the Credit Cri­sis Might Help Amer­i­can Man­u­fac­tur­ers By Mark Sun­shine Mark Sun­shine is pres­i­dent of the com­mer­cial lend­ing insti­tu­tion First Cap­i­tal. It’s hard to believe that the bank­ing cri­sis can be good for any­one, but the credit crunch is start­ing to help some Amer­i­can com­pa­nies at the expense of their for­eign com­peti­tors. Most peo­ple […] [read full story]

    Posted in: Credit Crisis, Finance, Manufacturing, New York Times, Supply Chain, Trade Finance
  9. LIBOR, Psychology and Market Disruption Clauses In Legal Contracts – A Milbank Tweed Client Alert by Richard M. Gray" rel="bookmark">LIBOR, Psychology and Market Disruption Clauses In Legal Contracts – A Milbank Tweed Client Alert by Richard M. Gray

    This week I received a “client alert” from the law firm of Mil­bank, Tweed, Hadley & McCloy about LIBOR. Richard Gray is a Mil­bank Part­ner and is the author of the client alert. He dis­cusses LIBOR and the issues posed by the dis­par­ity between the pub­licly quoted LIBOR rate and the actual rates on Eurodol­lar […] [read full story]

    Posted in: British Bankers Association, Credit Crisis, economy, Finance, LIBOR, Market Distruption Clause, Milbank Tweed, Richard Gray
  10. Too Bad The Grinch Already Stole Christmas!!

    Too bad Christ­mas has already been stolen by the Grinch. Christ­mas sales of dis­cre­tionary items such as apparel, elec­tron­ics, fur­ni­ture and other soft goods are going to be down regard­less of whether or not con­sumer con­fi­dence is restored in the next month. The rea­son for my down­beat pre­dic­tion of Christ­mas sales is orders for dis­cre­tionary […] [read full story]

    Posted in: Economic Statistics, economy, Finance, Retail Sales