Gerald

Who's Failing Us With Bad Information?

The way forward is to resolve the valuation issues surrounding all the CDOs and other ultra complex fixed income derivatives. It is now apparent that these investments are more equity in nature rather than fixed income. If the credit ratings for these instruments were nullified, then equity valuation techniques could quickly be applied to value these instruments and their values determined accordingly. This will naturely involve some discomfort but then chapter on these difficult products could be closed sooner rather than later.

Comparing Bubbles: China vs. Nasdaq and Homebuilders

An interesting article. An important question is given that the RMB has exchange controls and the PRC stockmarkets presently allow very little foreign investment, one needs come up with a theory as to how global investment money gets into these PRC equity markets to initiate the bubble. Otherwise examing the history of open market activity may only provide limited guidance.

Is the Market Misreading the Fed?

Could Bernanke be skillful enough to cut the discount rate by 25bps instead of the fed fund rate? This would confuse the financial markets in an amusing way: he would be meeting the market half way so to speak. It would bring rate relief to those with mortgages yet it would force the banks to continue to be responsible for proper credit assessment. We will be in suspense until this afternoon.

Is the Market Misreading the Fed?

Could Bernanke be skillful enough to cut the discount rate by 25bps instead of the fed fund rate? This would confuse the financial markets in an amusing way: he would be meeting the market half way so to speak. It would bring rate relief to those with mortgages yet it would force the banks to continue to be responsible for proper credit assessment. We will be in suspense until this afternoon.

Is the Market Misreading the Fed?

Could Bernanke be skillful enough to cut the discount rate by 25bps instead of the fed fund rate? This would confuse the financial markets in an amusing way: he would be meeting the market half way so to speak. It would bring rate relief to those with mortgages yet it would force the banks to continue to be responsible for proper credit assessment. We will be in suspense until this afternoon.