Lee’s Free Thinking

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Rumors of Market Demise Not Greatly Exaggerated – Professional Edition

Housing market indicators show no sign of improvement in the supply demand equation. Even the hopeful signs that things may have stopped getting worse may prove illusory. Click here to download complete report in pdf format (Professional Edition Subscribers). Try the Professional Edition risk free for thirty days. If, within that time, you don’t find…

Bernanke – two bullets left

Drew Matus, economist at Merrill Lynch, is throwing more kaka into our forecasting potion (here is the podcast):

Q2 GDP positive, stimulus checks are fading
Q3 GDP negative
Inflation remains very elevated all this year, Bernanke is stuck with 2% Fed Funds rate
Finally, inflation is dropping sharply down to 1.6% core rate in Q1 ‘08
Bernanke’s hands are finally […]

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 […]