Lee’s Free Thinking

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Ben bends but doesn’t break

As interest rates jumped off the bed this week it doesn’t seem to me that Ben is trying to move them back. My personal opinion is that Fed’s power to change interest rates is very limited. Just heard a guy on the Bloomberg podcast saying that right after the war dollar made pretty much 100% […]

Twice as Bad as Mainstream Reports – WSE Pro Housing Report

While 2/3 of metro markets in the US have reached “affordable” levels by traditional metrics the problem areas of California, Florida, Nevada, and Arizona have not improved, and weakness is continuing or worsening in some key northeastern markets. These markets represent the majority of the total housing value and the total mortgage portfolio of the…

Inside Bernanke’s Brain – The Fed’s Response To The Crisis

The following piece is adapted from a letter to a friend, discussing economist Nouriel Roubini’s “The Twelve Steps to Financial Disaster“; his explanation of why the Fed suddenly aggressively cut rates in January.

I completely agree with Roubini’s assessment as to the severe risks the economy faces. But he is wrong, wrong, wrong and CLUELESS […]

Figures Lie, Liars Figure

The National Association of Rattlers (NAR) reported today that sales of existing homes rose in November. Upon hearing the news, Steve Liesman (is that the best name ever for a financial talking head, or what?) proclaimed on CNBS that the bottom was in. Follow the money. Find the profits!Liquidity is money. Regardless of where in…

A Bad News Day For Citigroup

Yesterday wasn’t the best of news days for Citigroup. The key stories I saw were:

Citigroup has appeared to clumsily reverse course on their previous “pledge” not to support their ailing SIV vehicles (now apparently reaching about $66 billion; formerly as high as $83 billion) in the form of statements by one William Mills:

Is The Fed Flushing Out The “Excess Credit” Demons?

My summary answer to this question is “no”. The debate spurring my remarks here, which is presently raging in the Fed-skeptic/hard money camp, has splintered into the “austere Fed” vs. “profligate Fed” sub-camps. There are assumed to be important practical ramifications of the answer to this question regarding investing, trading, and the […]

Markets Are Not Math!

August 9 – The Wall Street Journal (Henny Sender and Kate Kelly): Quant funds – ‘quant’ stands for quantitative — generally operate by building computer models of market behavior and then allowing the computer programs to dictate trading. A recurring characteristic of the recent trouble in financial markets is that many lenders, funds and brokerages […]

Fodder for Greater Fools

Resuming a familiar refrain, the market is moving up today for all the wrong reasons.  Bad news is being taken as good—as if the deteriorating economic situation over the past year is not proof enough that doe-eyed readings of the leading month or week’s data is pure folly.