Outside the Box, December 2007


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A Little Acid Test for Fed "Liquidity"

December 17, 2007

The Fed is getting ready to auction of $40 billion in repos this week. The stock market acted is if this was a special gift stuffed into its Christmas stocking last week, rebounding after a serious drop in the market the day before. This week in Outside the Box, Dr. John Hussman tells us why the $40 billion is more smoke and mirrors than actual money. It seems they had $39 billion coming due this week anyway. And in a $12.7 trillion dollar banking system it may not make much difference.


China and the Arabian Peninsula as Market Stabilizers

December 13, 2007

This week in a Special Outside the Box good friend George Friedman of Stratfor, in an unconventional piece, addresses the conundrum that equates low interest rates with market illiquidity, postulating on what may be the underlying cause of such an event. George seems to specialize in Outside the Box thinking, and this piece is no exception.

Stratfor continues to provide insightful and pertinent research on economic and geopolitical events and their respective ramifications. Stratfor continues...

The Shadow Knows

December 10, 2007

This week in Outside the Box we will look at Bill Gross of Pimco's latest essay, addressing the ever expanding economic repercussions of the poorly understood CDO/CLO market, the off balance sheet structured investment vehicles (SIVs) and the economic abyss Bernanke and Company are attempting to lead the market out of with neither light nor guide. Bill sits on the top of the largest bond firm in the world, so they have some very unique insights into what is happening. I always pay attention to...

US Consumer Confidence Heads South

December 4, 2007

In the second installment of our special two day Outside the Box letter, we have good friend Greg Weldon's giving us his thoughts in his regular "Weldon's Money Monitor." Consumer expenditures account for approximately 2/3rds of U.S. GDP. A precursor to any underlying changes in consumer expenditures is consumer sentiment. Greg explains to us the state of the American consumer and how current federal and institutional initiatives will not help thwart the looming recession. You can read his work...

The Wages of Financial Sin

December 3, 2007

This week we turn to Michael Lewitt of HCM Capital for a very insightful letter on the current credit crisis. As I wrote on Friday, it is important for anyone with any involvement in the financial world to pay attention to what is going on in the credit markets. I think it is going to have far more impact than most observers apparently believe.

Michael E. Lewitt is the Managing Member and President of HCM (Hegemony Capital Management). You can read his letter at www.hegcap.com.

I should...