Banking and Finance in the New World

What does a bubble look like and how do they end? In this week's Outside the Box, James Montier of Societe Generale in London looks at not only the psychological analysis, but also at the propensity for commentators to continually proclaim the end of the problem and a resumption of business as usual. He includes a fascinating piece from Marc Faber documenting the various quotes about how well the economy was doing from 1928-32. This makes for fun, if a little sobering, reading. To quote from his summary: "We have seen the heads of virtually all financial institutions stand up over the last few ... Read Full Story

.........But First, A Word From Our Sponsor.......... No other bank is as committed to you and your global portfolio success as EverBank. And we’ve proven it again with the launch of the NEW currency resource pages at EverBank.com. We encourage you to visit EverBank.com and see for yourself. You’ll discover: - Over 30 new web pages dedicated to foreign economies and currencies, including tips and insights from Chuck Butler, President of EverBank World Markets - Condensed, relevant and timely economic information from around the globe - Tools, charts and tables you need to compare and evaluate currencies This is another groundbreaking step from EverBank. ... Read Full Story

The Federal Reserve Bank of Atlanta this past January released a video on crisis preparedness. The timing of such a video being released is suspicious considering the prospect of bank failures and an inflationary collapse of the U.S. monetary system loom large. The U.S. Dollar is at all-time lows and many top economists are predicting that we are entering a very deep recession if not a depression. Although the video focuses in on a potential disaster like a terrorist attack or a weather related event, a financial disaster easily fits into the scope of this video. The focus of the video is on how ... Read Full Story

.........But First, A Word From Our Sponsor.......... No other bank is as committed to you and your global portfolio success as EverBank. And we’ve proven it again with the launch of the NEW currency resource pages at EverBank.com. We encourage you to visit EverBank.com and see for yourself. You’ll discover: - Over 30 new web pages dedicated to foreign economies and currencies, including tips and insights from Chuck Butler, President of EverBank World Markets - Condensed, relevant and timely economic information from around the globe - Tools, charts and tables you need to compare and evaluate currencies This is another groundbreaking step from EverBank. ... Read Full Story

Retail Sales Take a Dive Accounting for Inflation The Fed at the Crossroads Sell in May and Go Away South Africa, Flowers, and On the Road Is the economy poised for a recovery, as the stock market seems to expect? Or are we in for another few more quarters of recession and/or slow growth? In this week's letter we take a look at consumer spending, inflation, and other data to see if we can find a clue or two to give us an idea of the direction of the economy. There is a lot of data, so let's jump right in. (Media note: Right ... Read Full Story

It could be argued that the recent rise in the medium and longer term US Treasury rates have something to do with concerns re inflation. It also could just as easily be argued that a major part of the rise is due to a lessening of the fear factor related to the credit crisis and an associated narrowing of credit spreads. This latter point is debatable, however, as spreads have narrowed very modestly by most measures (see left chart for one example). The same two part argument cannot, however, be attributed to the recent decline in the VIX. The drop from the high 20s ... Read Full Story

"The idea of financial panic -- that has been pretty much taken care of," Warren Buffett “Economy May Face Prolonged Pain, History Suggests” Greg Ip, Wall Street Journal   Mr. Buffett may be technically correct but that won’t help investors who come to the mistaken conclusion that further economic pain has been averted. The argument being made in my previous reports and on the blog point to a painful adjustment process that the US and world economy will likely undergo as it suffers through the withdrawal pains of deleveraging. Yes, the panic may be over (for now), but the adjustment is not. A changed ... Read Full Story