tag:blogger.com,1999:blog-43844342059564400522026-02-23T12:15:01.247-08:00Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.comBlogger37125tag:blogger.com,1999:blog-4384434205956440052.post-70731863109814503502009-05-23T11:44:00.000-07:002009-05-23T11:59:28.022-07:00

Check out this exchange between Paul Krugman and Niall Ferguson (among others).Briefly, Krugman and Ferguson agree that the future of the U.S. economy depends upon how large the U.S. national debt becomes and how the world views the value of this debt.  If, instead, the U.S. has to print money to meet its obligations, then inflation will ensue...and things get a little dicey.  Paul Krugman (the

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com3tag:blogger.com,1999:blog-4384434205956440052.post-42930449036367518222009-05-22T15:56:00.000-07:002009-05-22T16:01:00.134-07:00

Joe Matthews of the NY Times asks the question:  "Is California Too Big to Fail?"."IS California too big to fail?That’s the question President Obama and Congress will soon face. While many states have severe fiscal problems, the depth and unusual persistence of California’s budget problems — the state has run deficits for most of the decade — has emptied Sacramento’s till. On its current path,

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com2tag:blogger.com,1999:blog-4384434205956440052.post-33419439792738981122009-05-22T15:35:00.001-07:002009-05-22T15:43:26.680-07:00

Check out this analysis by Mish and John MauldinOn April 10, 2009, the total earnings estimate for all of the S&P 500 companies was a combined $28.51.   "The S&P closed Thursday at 888. That's a richly priced PE [price/earnings ratio] of 31 [888/28.51= ~31]. Let's assume that earnings recover to $48. That's still a richly priced PE of 18.5. A bear market bottom might sport a PE of 10-12

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-1741705803049701422009-05-21T16:34:00.000-07:002009-05-21T16:45:40.026-07:00

Sometimes, we lose perspective on what an economic powerhouse the U.S. really is!A comparison courtesy of a Wolfram Alpha search:While China's GDP growth averages more than 3Xs that of the U.S.,pay attention to the current absolute values:  $13.8 Trillion (U.S.) vs. $3.4 Trillion (China)And...the per capita GDP of the U.S. is approx. 28 times that of China.  Staggering!| United States | China GDP

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-8761359873843369182009-05-21T16:19:00.000-07:002009-05-21T16:28:59.014-07:00

It's a long way to the top....  unemployment numbers still have a ways to go....See chart here.(Hat tip to CalculatedRisk)From the U.S. Department of Labor:U.S. Department of LaborOffice of Public AffairsWashington, D.C.EMPLOYMENT AND TRAINING ADMINISTRATIONUSDL 09-539-NAT    Program Contact:TRANSMISSION OF MATERIAL IN THISScott Gibbons (202) 693-3008RELEASE IS EMBARGOED UNTILTony Sznoluch (202)

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-28615306555621455002009-05-16T13:41:00.000-07:002009-05-16T13:46:51.219-07:00

Nouriel Roubini has an interesting article in the Wall Street Journal (WSJ) concerning how the recently concluded Bank Stress Tests vastly underestimate the losses that the banks will take over the next 6-9 months.  This means that in order for these banks to remain solvent, they will have to raise even more capital than originally thought.

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-7092490041058945362009-05-16T13:17:00.001-07:002009-05-16T13:33:09.748-07:00

A new specialized internet search engine will be operational beginning this upcoming Monday!  It is named Wolfram Alpha.Here is a description from the website:Wolfram|Alpha's long-term goal is to make all systematic knowledge immediately computable and accessible to everyone. We aim to collect and curate all objective data; implement every known model, method, and algorithm; and make it possible

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-54277871440801444202009-05-14T17:26:00.000-07:002009-05-15T14:32:13.399-07:00

If there is an increase in the demand for nurses, then the wages for nurses should increase in the short-term.  Higher wages attract more professionals to enter the profession.  As supply catches up with the demand, then wages stabilize.  That's Economics 101.  So why, at least domestically, isn't the supply of nurses sufficiently increasing?  The consensus is that there are not enough nursing

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-80570398940429398662009-05-14T15:19:00.000-07:002009-05-15T14:20:46.428-07:00

The Health Resources and Services Administration (part of the U.S. Dept. of Health and Human Services) has this to say in regards to nursing supply/demand:Excerpt:"An adequate supply of nurses is essential to achieving the Nation’s goals of ensuring access to affordable, high-quality healthcare. The adequacy of nurse supply varies geographically throughout the Nation, with a general consensus

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-34284390831112580382009-05-14T09:39:00.000-07:002009-05-15T14:20:11.545-07:00

Some information on the proposed (but not yet adopted) Nursing Relief Act of 2009 is here.But is there currently a significant nursing shortage?  It is not clear the shortage is ubiquitous, and it likely depends on what state you live in.Megan Woolhouse of the Boston Globe writes that, counterintuitively,  hospitals in Boston, MA have been laying off nurses. What are the reasons for the layoffs?

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-18403523012469662022009-05-13T12:24:00.000-07:002009-05-13T12:31:18.364-07:00

Briefly, CRE loan defaults are adversely affecting smaller regional banks that up until now had  successfully weathered the recent economic storms.From Calculated Risk (more here):'This is a story we've discussed for a few years, but it is probably worth repeating: Small and regional banks couldn't compete in the residential mortgage market during the housing bubble (with some exceptions), so

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-33520512846347241792009-05-07T08:45:00.000-07:002009-05-07T08:48:24.789-07:00

More from Eliot Spitzer in Slate here.  The NY FED definitely has some conflict-of-interest problems.Excerpt:The kerfuffle about current New York Federal Reserve Bank Chairman Stephen Friedman's purchase of some Goldman stock while the Fed was involved in reviewing major decisions about Goldman's future—well-covered by the Wall Street Journal here and here—raises a fundamental question about Wall

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-27713611773579261262009-05-07T08:19:00.000-07:002009-05-07T08:34:37.001-07:00

Eliot Spitzer effectively articulates populist opposition to the Wall Street bank bailouts.  (If you can overlook his past hypocrisy, difficult though it may be, he makes a convincing argument.)

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-28555636322412937112009-05-06T17:47:00.000-07:002009-05-06T17:50:21.592-07:00

With so many homeowners "underwater"....I think you know the punchline.

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-36599034812143044462009-05-06T17:26:00.000-07:002009-05-06T17:46:35.467-07:00

Ruth Simon and James Hagerty with an interesting article in the Wall Street Journal. Full article here.Briefly, an additional 4 million homeowners were "underwater" after the first quarter of 2009 than at the end of 2008.  In the meantime, what has happened to the value of toxic mortgage-backed securities over the past 4 months?  Toxic collateralized debt obligations?How have things gotten better

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-46749222104247752702009-05-06T13:59:00.000-07:002009-05-06T14:30:49.256-07:00

Whenever the U.S. economy fully recovers (including on the job front), our nation will likely witness some significant changes in how health care is managed in this country.  Both Democrats and Republicans realize that healthcare in this country needs to be reformed...but in terms of what reforms will need to be made, the two parties will have to duke it out.  Democrats are clearly going after a

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-57850069589564632382009-05-05T07:55:00.000-07:002009-05-05T08:43:26.092-07:00

The buzz the past couple of weeks is that the economy is bottoming and that we are beginning to witness "green shoots."  The stock market is experiencing a sustained bear market rally, which historically has been a nine month (give or take a month) leading indicator of broad economic recovery.  But what is the basis for the equities market's "leading economic indicator" status?  Since the Great

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-1654579160326611582009-04-30T13:58:00.000-07:002009-04-30T14:10:51.709-07:00

First, some data on BofA and Citibank:Bank of AmericaNet Equity (as of end of March 2009) = $ 240 BillionMarket Capitalization (as of Apr 30, 2009) = $57.16 BillionCitibankNet Equity (as of end of March 2009) = $ 144 BillionMarket Capitalization (as of Apr 30, 2009) = $16.81 BillionOne explanation for these numbers, besides a cash flow problem,  is that the market believes that some of their

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com2tag:blogger.com,1999:blog-4384434205956440052.post-47004495618844481312009-04-30T13:19:00.000-07:002009-04-30T13:48:43.550-07:00

What is the current state of the finance industry in this country?   The results of the bank "stress tests" for the top 19 banks (by asset value) are seen by many independent analysts to be unconvincing.  Last week, the Federal Reserve stated that the vast majority were sufficiently capitalized to withstand an even greater economic downturn than the one we are currently experiencing.  Yet, this

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-60159379103351850612009-04-29T15:49:00.000-07:002009-04-29T16:19:16.447-07:00

Who are the top-ten holders of U.S. debt (in the form of U.S. Treasuries)?1.  Federal Reserve and IntraGovernmental Holdings ($4.8 Trillion)2.  Mutual Funds/ Money Market (769 Billion)3.  China (740 Billion)4.  Japan (635 Billion)5.  State and Local Governments (523 Billion)6.  Pension Funds (456 Billion)7.  Other (individuals, trusts, brokers, etc)  (413 Billion)8.  Oil Exporting Countries (Iraq

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-35339492060305351642009-04-28T16:49:00.000-07:002009-04-29T08:54:02.681-07:00

Clearly, the U.S. government on behalf of 'we the people' needs to spend money to get us out of this economic crisis.  Still, the amount of money is staggering....Remember: the value of all the goods and services that we produced in this country (the Gross Domestic Product, GDP) in 2008 was about 14.2 Trillion Dollars.The following table details how the Fed and the government have committed the

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-62091205499276363032009-04-28T12:51:00.000-07:002009-04-28T13:14:27.200-07:00

Up until his appointment and confirmation as U.S. Treasury Secretary, Timothy Geithner served as President of the New York Federal Reserve Bank.  What is the role of the New York Fed, you may ask?from the NY Times: Becker and Morgenson, April 26, 2009:"The Federal Reserve was created after a banking crisis nearly a century ago to manage the money supply through interest-rate policy, oversee the

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com1tag:blogger.com,1999:blog-4384434205956440052.post-27467343538589315272009-04-28T09:46:00.000-07:002009-04-28T10:24:33.519-07:00

The SEC is convinced that some version of the Uptick Rule should be reinstated in the equities markets.  The claim is that short-sellers can intentionally drive a company's stock price down and destroy an otherwise sound company.  This does not make sense.  If the fundamentals of a company are sound, then short-sellers pose no threat to its long-term viability.  On the other hand,  if a company

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com1tag:blogger.com,1999:blog-4384434205956440052.post-16791107930039453502009-04-27T16:01:00.000-07:002009-04-27T16:06:33.357-07:00

Mark Shields asks the question:  Do we really want the government run like a business?Well, certainly not like the typical Wall-Street investment bank!

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com0tag:blogger.com,1999:blog-4384434205956440052.post-48921072943608694032009-04-27T09:43:00.000-07:002009-04-27T09:50:08.819-07:00

Check out this article in the Wall Street Journal:  "It's a Great Time to Start A Bank."It would be nice if new banks with clean balance sheets could qualify for TARP money (see April 21, 2009 post:  New American Bank Initiative).Again, you can read the full plan here:  http://cift.haas.berkeley.edu/nabi-intro.html

Olivier Contrairehttp://www.blogger.com/profile/06955804605207945402noreply@blogger.com1