Thoughts From the Frontline, March 2007

Draw the Curve, Then Plot the Data

March 30, 2007

This week we look at something which has far more potential to hurt the economy than subprime loans - the US Congress. We muse on inflation data and why the economy may do better than I think.

But first, and quickly, my young assistant Micah Davis is leaving soon to go full time in an entrepreneurial venture (and I wish him the best), which means I will be in need of an assistant. The duties are varied. You get to be the one to read my emails from readers first (and we get a lot, which...

All Subprime, All the Time

March 23, 2007

At the risk of being all subprime, all the time, this week we look at what I think are the real risks for the economy as a result of the subprime debacle. How can one side say it is a contained risk (and in one sense it is) and not a problem for the economy while another side says it will drag the US into a recession and thus be a drag on the world economy? The answers will give us a handle on the whole issue, as we look at how the problem developed.

But first, let me correct an error....

The Fingers of Housing Instability

March 16, 2007

This week we look at the yen carry trade, delve deeper into the mortgage lending world, and see if we can find a possible connection between them and the economy in general through something called complexity theory. As I have written for many months, I think the subprime mortgage problems are going to be the catalyst for a recession. We look at some ways that the contagion in this small part of the housing market could spread.

Bubbles have consequences far beyond their causes when...

China and the Hedge Fund Dragon

March 9, 2007

This week we look at the possible latest entry into the hedge fund world, The People's Republic of China; review the cockroach principle of subprime mortgages; and investigate the possibility of whether we need more derivatives and not less than the $283 trillion or so we now have. It's a lot to cover, but it should all be interesting.

But before we get into the meat of the letter, I want to announce a brand new web site. For the last six months, we have been in the process of creating...

The End Of Complacency?

March 2, 2007

This week we look at the recent upspike in volatility, see if we can connect some dots with the recent slew of earnings downgrades and the problems in the subprime mortgage world, and follow the money as risk is being taken off the table. I don't "buy" the China problem, but there may be an Asian connection. Let's try and keep it simple as we try and see what's behind curtain #3 labeled "Which direction is the stock market headed?"

But first, if you have not signed up for my Strategic...