Robert Fisk, Robert Fisk, Robert Fisk.
Hats off to you for moving the dollar with your latest article.
As good a Middle Eastern correspondent as Mr. Fisk is (arguably the best sourced Western correspondent there is in the region) it is best to take most of what he says with a mouthful of salt, remember there is a term called ‘fisking’ named in his honor for a reason.
As Mish Shedlock puts it “Supposedly Robert Fisk knows the plans but “Americans have not discovered the details”.”
Brown Brothers Harriman also point out the ever-so-important practical problems “the yuan is not convertible and the GCC does not exist… Managing such a currency basket has proven very difficult in the past and would require a whole new bureaucratic apparatus to manage”
If you want a proper reason to be terrified about the future of the dollar and most G7 currencies then re-read page three onwards of the Hayman Capital shareholder’s letter I linked to yesterday. Uncle Ben & T-Geit are doing better jobs over the long-term of trashing their currency than Fisky.
And then read page ten of Hayman’s letter for background on Latvia to get a feel for why Sweden’s banks are doing shareholder bailouts... sorry, rights issues. On the plus side, it should make Riga even cheaper for stag weekends. It’s also probably the reason that Swedbank equity has over 55% short utilization, making it the most utilized short stock in Europe, and most at risk of a short squeeze. The rest of the world’s unloved stocks available here.
Manual of Ideas tries to disaggregate what makes up the ROI of a buyout shop’s wheeling & dealing - the results are not too dissimilar to most asset managers: luck, skill and varying degrees of greed.
Their post was inspired by this (long) NYT article on PE’s success at flipping and running companies into the ground (also the source for James Kwak’s similair post on shareholder value yesterday at Baseline Scenario).
Still as grizzled distressed debt maestro Marty Whitman of 3rd Avenue pointed out in a recent interview (audio file about 30 mins long), most of the time Wall St. did do their due diligence homework and picked decent companies, they just loaded them with silly capital structures, as long as the creditors and company can restructure the debt loads properly a fair few of them will come out the other side.
Economist Steve Keen contends the Ozzy central bank is “taming a lion that is sound asleep with its rate rises”.
“A downturn that is already in train as a debt bubble bursts will be made worse by this increase in rates at a time of greatly heightened financial fragility… I doubt that we will see any sustained acceleration in the debt to GDP ratio, with the consequence that the debt-financed component of aggregate demand will be anaemic at best. Since that has been the major source of growth in aggregate demand for many years now, I expect that economic growth will be substantially less than the RBA anticipates.”
Sobering reading, but not sure what his solution to the problem is from this post.
Research Ahead flags a peculiar phenomenon in Germany where small companies are finding it easier to get access to credit than their large-cap brethren (you need to scroll down past the first chart to get to the relevant section; the first part is the standard critique of the U.S. BLS birth-death model) and offers up the reasons for this divergence.
The situation in the United States, on the other hand, is the polar opposite. The Atlanta Fed’s blog also points out that American small businesses have been among the biggest source of job losses in the current downturn.
Perhaps there is more momentum and life left in this here rally says Tobin’s Q - although best to burn your copy of Stocks for the Long Run and stick around for only a year, or three going by the stats offered up.
Interesting…. Apparently August turnover velocity was orders of magnitude higher on the Nasdaq than on the go-go mainland Chinese markets. A global market breakdown done month-by-month in pdf format is available here, if you’re keen to find out, say, velocity in Bermuda vs. Llubjana.
More stuff for the technical analysts to chew on: % of stocks in the S&P 500 above their 50-day M.A. is ticking down.
And 2009 isn’t turning out like 1929 going by the charts.
Wondering what a keister bomb is? Read on…
