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Archive for the ‘Economy’ Category

John Maynard Keynes

One tool employed by non-rocket-scientists on their way to success on Wall Street is short-cuts; e.g. P/E, PEG…etc. Needless to say, actual rocket scientists also work on ‘The Street’. In recent years, they’ve focused on derivatives and their goal is frequently to distill complex matters into simple variables (short-cuts) the rest of us can understand. Things like delta, gamma and CDS spread, are all the end product of mathematicians and physicists who figured out Wall Street pays way better than academia. All of these metrics, to one degree or another, can end up as a vehicle for getting away from inexorable investing realities. Read the rest of this entry »

These days, among all construction sites, stalled developments are sure to outnumber active ones. As Daniel Dirscherl, general manager at Hunter Roberts Construction Group LLC in Philadelphia, states, “there’s not a lot of large projects. Institutional work is what is out there now – higher ed, health care, and public works.” This is very apparent living in Philadelphia, a city whose downtown is dominated by large ever expanding universities (Penn, Drexel, Temple, and Thomas Jefferson). Alumni support may have gone down in the last couple years, but from an outsider’s perspective universities appear impervious to the economic downturn. Read the rest of this entry »

Don't confuse "Bullet Trains" with "Silver Bullet" Trains.

If you don’t know what a bullet train is, this scene from “Mission:Impossible” should give you a pretty good idea of its speed. And according to this article from CNN, bullet trains might finally be coming to the United States. The Department of Transportation awarded $8 billion among 31 states to begin developing America’s first nationwide high-speed intercity passenger rail service. Read the rest of this entry »

With BP Plc (BP: US) now allocating $20 billion for lost business in states bordering the Gulf Realtors are out looking for their piece of the pie.  In Washington Kenneth Feinberg, head of BP’s $20 billion claims fund, met with the National Association of Realtors and industry representatives from Texas, Louisiana, Mississippi, Alabama and Florida to discuss their request for reparations.  In this case Feinberg will have to scrutinize claims for lost sales and determine what losses are due to the general angst of the housing market and what losses can be attributed to the spill itself. Read the rest of this entry »

Ten Years and All You get is 2.7%?

Yup. And it’s 1.68% more than a Japanese investor gets in Japan.

Long term rates will be kept low for the foreseeable future and the the Fed made it official yesterday. When they told everyone that they would keep $2 trillion (with a “T”) of bonds on their balance sheet, the Fed let the world know how soft the US economy really is. And, what’s worse, is that the markets agreed. Read the rest of this entry »

These days many people are interested in buying new homes at fire sale prices, but the thought of selling their home at those same low prices is less than ideal. Read the rest of this entry »

How shall I put this delicately? I have heard that sometimes, when the owner of an asset hires an expert to evaluate said asset, a potential conflict of interest can arise. The expert evaluator might, possibly be tempted to inflate the value of the asset to satisfy it’s client. I could even imagine a more aggressive owner putting a little pressure on the “expert” to inflate the value of the subject asset. While I’m not suggesting any specific person or company has ever done this, we should always be cognizant of where incentives lie. Read the rest of this entry »

Ever since Pacific Investment Management Co. (PIMCO) assessed the insurance industry’s home-loan investments, insurance regulators have been looking for a firm to review Commercial Mortgage Backed Securities (CMBS).  Analysis of CMBS investments will help determine how much capital insurers must set aside to circumvent any losses at the expense of the consumers. Read the rest of this entry »

While many people are questioning the Federal Deposit Insurance Corporation’s (FDIC) strategy for managing assets seized from failed banks, we must look to the 1980’s Savings and Loan Crisis to see the reasoning behind their “risky business”.  In 1989 the Resolution Trust Corporation (RTC) was an asset management company established by the Financial Institutions Reform Recovery and Enforcement Act (FIRREA), and charged with the liquidation of insolvent assets belonging to failed banks.  These assets were primarily real estate-related assets, and between 1989 and 1995 the RTC closed or resolved 747 thrifts with total assets of $394 billion. Read the rest of this entry »

Are we headed for a double dip recession? Nouriel Roubini, professor of NYU’s Stern School of Business, and recent author of the book “Crisis Economics” weighs in on the Kudlow Report.

Julia Coronado, senior US economist at BNP Paribas, and Stuart Hoffman, chief economist at PNC Financial, share their economic outlooks for the second-half of 2010.