Malkiel

Credit Cards: The Next Subprime?

In the 90's there was alarm because credit card debt per capita was skyrocketing as credit card middlemen Visa and Mastercard whipped up tons of new debt for their bank customers; then those customers got out from under their debt by using cash from mortgage refinancing, new debt that mortgage company middlemen whipped up for THEIR bank customers; now the consumers are getting out from under their mortgage debt by transferring debt back to their credit cards. There are two interesting points here: firstly, banks are suckers for the machinations of middlemen; second, all forms of debt are probably being shouldered by the same few dumb banks, so expect more writeoffs for credit card losses from the people who had to write off mortgage losses...

Housing Market Tracker - Subprime is 'Collective Bankruptcy" - OECD Head

Can we be a little more careful here about how we use the term "subprime"? We've known for months now that the lending problems weren't confined to just subprime borrowers, that substantial elements of the crisis, like bubble pricing, were caused by prime borrowers overreaching due to risky products. Those features change the nature of the problem and make it a general lending problem not confined to just high-risk borrowers...

As Credit Lines Dry Up, Homeowners in Withdrawal

It seems that Bernanke, Paulson, and the talking heads on CNBC do the scientifically rigorous thing--read trends from statistics--which is causing them to be unable to see what's really bringing on a recession, which is psychology at ground level. I don't know any ordinary working people who aren't being affected by these trends, talking about them, and acting on them, either through fear, ignorance, or wisdom. If companies aren't ramping down their activity at the moment, that doesn't mean we're not suffering an economic downturn, it more likely means they haven't detected and reacted to it yet. In the living rooms of America, though, plans are already being made and bills are going unpaid...

13 Predictions for 2008

I agree that an independent run for the presidency is highly likely this election, but I don't see any scenario where the result will be anything other than taking 2 Republican votes for every 1 Democratic vote and guaranteeing the White House to the Democrat...

Jim Cramer's 10 Predictions for 2008

I predict that in 2008 a lot of companies will position themselves well in their industries, and tech companies will go a lot of interesting places that will make them money later, but nobody's share price will do anything other than tread water because the economy and credit crisis will cause stock market downturns at the end of each quarter as institutional investors engage in "window undressing" to get rid of holdings that didn't meet guidance, which will be everybody...