Mish's Global Economic Trend Analysis Sun 2009-09-20 11:08 EDT

Bank of America, Citigroup, Credit Card Defaults Soar To New Highs

Michael Shedlock

Last month's improvements in credit card defaults appears to be an outlier. Credit card defaults have resumed their natural tendency to track rising unemployment...Unemployment is likely to rise for another year, then flatten out so it is likely that card defaults keep rising for quite some time.

America; bank; Citigroup; Credit Card Defaults Soar; Mish's Global Economic Trend Analysis; new highs.

Credit Writedowns Mon 2009-09-14 14:43 EDT

Murder-Suicide in Chimerica

Edward Harrison

threading the events of 2008 and 2009 together makes a compelling case that the Chinese -- U.S. marriage is coming apart...GSE collapse, Geithner's charges of Chinese currency manipulation, Chairman Wen slamming the U.S. as a profligate nation, stimulus bill buy-American provision, a steady drumbeat of ditch-the-dollar talk coming out of China, Chinese central bank head Zhou's call for a new international reserve currency, Obama's chinese tire tariff was ``proverbial serving of divorce papers''. Expect prices to rise, look for Chinese retaliation on U.S. poultry and auto products...This marriage is over. The question is whether it will end gradually and peacefully in divorce or violently in murder-suicide.

Chimerica; credit writedowns; murder suicide.

Calculated Risk Fri 2009-09-04 19:01 EDT

Junk Bond Default Rate Passes 10 Percent

CalculatedRisk

From Rolfe Winkler at Reuters: U.S. junk bond default rate rises to 10.2 pct -SP The U.S. junk bond default rate rose to 10.2 percent in August from 9.4 percent in July ... Standard & Poor's data showed on Thursday. The default rate is expected to rise to 13.9 percent by July 2010 and could reach as high as 18 percent if economic conditions are worse than expected, SP said in a statement. ... In another sign of corporate distress, the rating agency has downgraded $2.9 trillion of company debt year to date, up from $1.9 trillion in the same period last year. Bad loans everywhere ...

Calculated Risk; Junk Bond Default Rate Passes 10 Percent.

Rick Bookstaber Sun 2009-08-30 12:07 EDT

Not with a Bang but a Whimper -- The Risk from High Frequency and Algorithmic Trading

Rick Bookstaber

``There is a general view that one way or another the end result of all the high frequency and algorithmic trading will be a blowup. But I don't think the risk is as big as many are making it out to be...the risk of a cataclysm is constrained by the lack of feedback and lack of tight coupling...As the field gets increasingly crowded, market impact will rise and opportunities will diminish'' First, let me point out the difference between high frequency trading and algorithmic trading. Both execute using computers, and since computers work really fast, both can be accused of whatever sins are embodied in millisecond trading. High frequency trading is a type of proprietary trading. The trader (or his computer) sees a profit opportunity and trades accordingly. This profit opportunity...

algorithmic trading; bang; High Frequency; Rick Bookstaber; Risk; Whimper.

Mish's Global Economic Trend Analysis Sun 2009-08-30 12:03 EDT

Greater Than One in Four FDIC Insured Institutions are Unprofitable; Bank Problem List at 15 Year High

Michael Shedlock

The second quarter 2009 Quarterly Banking Profile has some interesting charts and facts that inquiring minds will be interested in.Insured Institution Performance Higher Loss Provisions Lead to a $3.7 Billion Net LossMore Than One in Four Institutions Are UnprofitableCharge-Offs and Noncurrent Loans Continue to RiseNet Interest Margins Show Modest ImprovementIndustry Assets Decline by $238 BillionThe Industry Posts a Net Loss for the Quarter The Industry Posts a Net Loss for the Quarter Burdened by costs associated with rising levels of troubled loans and falling asset values, FDIC-insured commercial banks and savings institutions reported an aggregate net loss of $3.7 billion in the second quarter of 2009. Increased expenses for bad loans were chiefly responsible for the industry's loss. Insured institutions added $66.9 billion in loan-loss provisions to their reserves... ``Conventional wisdom regarding money supply suggests there is massive pent up inflation in the works as a result of the buildup of excess reserves...The reality is excessive debt and falling asset prices have rendered the best efforts of the Fed impotent. Banks are not well capitalized, they are insolvent, unwilling and unable to lend.''

15-year high; Bank problem listings; FDIC insured institutions; greater; Mish's Global Economic Trend Analysis; unprofitable.

ClubOrlov Wed 2009-08-26 13:53 EDT

The Slope of Dysfunction

kollapsnik

(Update: click here for a special version for the Nihonjin care of Masayuki.) Perhaps you have heard of the Peak Oil theory? Most people have by now, even the people whose job used to involve denying the possibility that global crude oil production would peak any time soon. Now that everybody seems a bit more comfortable with the idea, perhaps it is time to reexamine it. Is the scenario Peak Oil theoreticians paint indeed realistic, or is it firmly grounded in wishful thinking? Here is a typical, slightly outdated Peak Oil chart. I chose it because it looks pretty and conveys the typical Peak Oil message, which is that global crude oil (and natural gas condensate) production will rise to a lofty peak sometime soon, and then drift down...

ClubOrlov; dysfunctional; Slope.

Tue 2009-06-16 00:00 EDT

naked capitalism: Guest Post: The Imminent Disinformation Schism

``naive, easily-manipulated, small-time mom and pop investors, who only care about looking at their daily yahoo finance screens and 401(k) statements...and the forward looking taxpayers, who see the upcoming budget deficit fiasco, the social security ponzi scheme, the Medicare/Medicaid debacle, the ridiculous underfunding in public and corporate pension funds, the rising city and state taxes, the shuttering factories, the rising unemployment, the plummeting American production base, the "seasonally" upward-adjusted economic data coupled with consistently downward revised prior economic releases, the increasing savings rate and the multi trillion discrepancy in consumer purchasing power.'' Time contributing author Douglas McIntyre declares end to 2008 banking crisis

Guest Post; Imminent Disinformation Schism; naked capitalism.

Tue 2009-06-16 00:00 EDT

Calculated Risk: Citi: Net Credit Losses Rising Rapidly

Calculated Risk; Citi; Net Credit Losses Rising Rapidly.

Tue 2009-02-24 00:00 EST

Calculated Risk: The Rebalancing Continues ...

``savings rate is rising, consumption is falling, and the trade deficit is declining''

Calculated Risk; Rebalancing Continues.

Thu 2009-01-15 00:00 EST

The Institutional Risk Analyst: Bank Stress Index Up in Q3; Will the Final Solution for CDS Start in EU?

US Bank Stress Rises 7% in Q3; Will the Final Solution for CDS Start in EU? IRA (Institutional Risk Analytics)

Bank Stress Index; CDS Start; EU; final solution; Institutional Risk Analyst; Q3.

Fri 2008-12-12 00:00 EST

The Institutional Risk Analyst: Bank Stress Index Up in Q3; Will the Final Solution for CDS Start in EU?

US Bank Stress Rises 7% in Q3; Will the Final Solution for CDS Start in EU? by by Institutional Risk Analytics

Bank Stress Index; CDS Start; EU; final solution; Institutional Risk Analyst; Q3.

Sun 2008-11-23 00:00 EST

The great bond market crash of 2009

by Martin Hutchinson; ``why Treasury bond yields and the yield curve in general are likely to rise sharply in 2009''

2009; great bond market crash.

Mon 2008-11-03 00:00 EST

naked capitalism: Another Sign of Consumer Stress: Late Utility Payments Rising

consuming stress; Late Utility Payments Rising; naked capitalism; signed.

Mon 2008-11-03 00:00 EST

naked capitalism: Bankruptcies and Plant Closings Rising in China

bankruptcy; China; naked capitalism; Plant Closings Rising.

Wed 2008-10-08 00:00 EDT

naked capitalism: Japan, Australia Inject $11 Billion to Combat Rising Money Market Rates

11; Australia Inject; Combat Rising Money Market Rates; Japan; naked capitalism.

Fri 2008-06-27 00:00 EDT

Mish's Global Economic Trend Analysis: Is The Inflation Scare Over Yet?

"Destruction of credit via massive writedowns..., accompanied by sharply rising unemployment rates, falling wages, and curtailment in credit lines everywhere is simply not an inflationary environment"; "ery likely new all time lows in the 10-year treasury yield and 30-year long bond are coming up"

Inflation Scare; Mish's Global Economic Trend Analysis.