Outside the Box, August 2007


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The Ongoing Impact of the Housing Sector

August 27, 2007

Who should we blame for the problems in the credit markets? This week in Outside the Box my good friend Barry Ritholtz takes on the task of pointing his prodigious finger at the guilty parties. As he notes, there is plenty of guilt to go around. This is a problem that is going to stay with us more than a few weeks. As I wrote last week, it is not a problem of liquidity. It is a problem of credibility. Until investors of all types feel safe getting back into the structured finance market...

Why The Fed’s Rate Cut Did Not Come As A Surprise

August 20, 2007

This week's Outside the Box is from good friend and South African partner Dr. Prieur du Plessis of Plexus Asset Management. Prieur suggests that we should not be surprised at last week's rate cut, as it is consistent with past rate cut cycles when viewed from the fact that banks are tightening up on their lending standards to both consumer and commercial borrowers. There are a number of very original graphs here with some very interesting analysis that is truly Outside the Box.

What the Fed Did in 1998 and What is Different Now

August 13, 2007

This week in Outside the Box we take look at the how the Fed acted in the last debt crisis of 1998 and what they are likely to do this time. How will the Fed address the looming liquidity crisis stemming from the subprime debacle primarily, and from the abused Yen carry-trade, lax lending practices, and excess liquidity, generally? Asha Bangalore, Vice President and Economist at the Northern Trust Company, believes that given the actions taken by the European and Japanese banks in...

The Major Diplomatic and Strategic Evolution in Iraq

August 9, 2007

This week in a Special Outside the Box good friend George Friedman addresses the Byzantine geopolitical ramifications of recent three party discussions between the Americans, Iraqis, and Iranians. With no obvious reason to trust one another and a good deal of reasons not to, why are we seeing evidence of more discussions. As George tells it, there is more than meets the eye to these talks. The different parties all strive to extract the most favorable concessions from the Iraq War befitting...

Japanese Deflation… A Liquidity Wild Card

August 6, 2007

This week in Outside the Box we turn our eyes on Japan and as promised offer a report by macro-maven and good friend Greg Weldon. Japan is the world's second largest economy and a major source of liquidity. While China has captured the headlines in Asia, Japan is still the big economic dog and supplier of capital on the block.

Greg argues that there is the potential for another asset bubble popping in Japan at the same time as we see our housing market and subprime mortgages implode. That could...