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  • JPMorgan's (JPM) losses from its disastrous trades could reach $5B or more, the WSJ reports, as the bank struggles to unwind its positions. Major problems include increasing worries about Greece and the the EU economy. Meanwhile, the CFTC becomes the latest government agency to open a probe into the debacle, the NYT reports.  [View news story]
    It looks like JPM took the client money from MF Global and do not want to return it so it is just deserts they lose a lot more on the other side
    May 20, 2012. 09:02 AM | Likes Like |Link to Comment
  • Mar. Pending Home Sales:+4.1% to 101.4 vs. +1% expected; -0.5% prior.  [View news story]
    Housing can only reach a bottom if the FED keeps rates low. It will fall again if rates are ever normalized. I don't think the FED can really normalize rates back to the 5% level where mortgages would be 6-7% without causing the whole economy and banking system to crash again. That is the bigger dilemma that US economy faces.
    Apr 26, 2012. 03:33 PM | Likes Like |Link to Comment
  • Feb. S&P Case-Shiller Home Price Index: 0.2%M/M vs. 0.0% prior. -3.5% Y/Y vs. -3.3% expected, -3.8% prior.  [View news story]
    housing is a bit undervalued only when considering the very cheap interest rates which are not normal. When the fed is forced to normalize interest rates then this game will end. For most of the last 30 years inflation has been 3-4% and money markets used to be 5% which meant mortgages were 6-7%. A houses value is much lower at a 6-7% rate.
    Apr 24, 2012. 11:12 AM | 4 Likes Like |Link to Comment
  • The Greek government has secured the votes necessary to pass the austerity bill, paving the way for the next EU/IMF bailout, reports CNBC.  [View news story]
    If Greece and other broke countries go down the austerity path then who is going to buy the German exports to Germany growing???
    Feb 12, 2012. 08:01 PM | Likes Like |Link to Comment
  • Looks like a repeat headline, but isn't: Negotiators say Greece and private creditors are close to a deal on a debt swap. Now, creditor reps Charles Dallara and Jean Lemierre may offer interest rates that would mean bigger losses for bondholders that would still be recouped if strong growth returns. (last weekend)  [View news story]
    If Germany does not loan money to Greece then Greece cannot import stuff from Germany thus the German Economic mirage goes up in smoke. Trade (free) should be Germany sells real stuff to Greece and Greece sells real stuff back to Germany. That keeps the system in balance. For over 30 years the world has run with one side manufacturing and selling (Germany/China) to the other side (Greece/US) but the other side only borrows money to support consumption. There is no functional way for the borrower to pay back the lender with this type of system. At some point it will blow up. That day is getting closer.
    Jan 29, 2012. 12:47 PM | Likes Like |Link to Comment
  • Why Europe's Crisis Can't Be Averted [View article]
    If Greece still has a current trade deficit then even if the existing debt is marked down to nothing then they still have a problem. The problem is not the actual debt but the fact they run a trade deficit. The debt is the result of allowing an out of balance trade situation to occur. To fix the problem they need to solve the trade deficit so then they have money to pay the interest costs and then pay back any principle. Is Germany willing to move a factory to Greece so that they can have jobs and more exports?
    Jan 27, 2012. 03:41 PM | Likes Like |Link to Comment
  • Continuous ZIRP Is Investor Poison In The Long Run [View article]
    If the fed ever raises rates to a realistic low level of 3% (let a more real basic rate of 5%) our banking system will collapse again. This is not because of bad loans. But because banks are providing loans (5 year car loans at 2.99% and investing in mortgage bank securities 15/30 year quarantined by Freddie and Fannie that only pay around 4%) and banks needs at least a 2% margin just to function.
    Jan 27, 2012. 03:41 PM | 1 Like Like |Link to Comment
  • Weekly Indicators: 2011 Ends With A Bang [View article]
    If the rail traffic number is accurate then this economy should be growing big time. But I think all would agree that the economy is barely growing at all. The economy has less than 2% growth rate and that is being helped by QE2 during the 1st and 2nd Quarter and the payroll tax cut.

    The retail number needs to be adjusted for inflation. Year over year growth in retail by 4% needs to be adjusted by the 4% inflation rate that the government is willing to admit too. That means retail sales are flat or to put it another way volume is flat.

    If retail sales volume is flat then where is the increase in shipping volume coming from. Is there a possibility that some of the shipping increase is from a change from shipping by semi truck to putting the shipping container on the flat bed of a train? Are business being pushed into this due to high gas prices?

    Hopefully we are selling and shipping more coal, wheat, corn, potatoes, or something else to help grow the economy. Hopefully some of that growth is exports in a small effort to balance are trade deficit.

    On another note It does not matter what the price of a home is listed for or how many contracts are signed. The important facts are what the house actually sells for and if the escrow actually closes. Both of theses are still down.
    Jan 2, 2012. 06:09 PM | Likes Like |Link to Comment