There are a few economists whom I must profess to having a soft spot for, and one of them is Paul Volcker, every time I get a chance to listen to him on the tele or read anything he had a hand in I try to see it/read it. Consider this ‘essential’ viewing.
TechTicker talk to Todd Harrison about the deflation or inflation question, many commentators have felt that inflation will be the true risk but that it is on the horizon for now and for that reason isn’t receiving enough attention, Gold is tenaciously holding the $900 dollar mark (give or take some volatility either side of that), and the truth likely lies somewhere in the middle. This video is worth a watch, it puts some interesting ideas into the debate.
Taking rent is perhaps the best and yet most unproductive part of an economy, in the past we have spoken about the concept of ‘rent taking’ regarding economic bubbles and the effects of same. The last few years have seen rent takers jumping from one resource to the next in search of a good place to rest.
In the dotcom boom the rent taking was in the real estate of cyberspace, buying ‘probable’ names and sitting on them was popular until it proved to be a pointless exercise as companies found other ways around the problem, in some cases (such as 20th Century Fox re-branding because somebody bought 21stCenturyFox.com etc.).
After that the low rates and capital gains to be found in housing caused the next boom bust, it is fair to say that it was the land owners (the original rent takers) who did the best in this scenario. In any case the money left housing from 2005 onwards (for instance Berkely group sold off half of their 26,000 land …
Backwardation is a commodity term that is used to describe a situation where the spot price (the ‘right now’ price) is greater than the future price (the price that is available on forward contracts). Gold has not seen backwardation in generations, is this a symptom of a very high spot price or is it a weakening future price? Normally gold, like other non-perishable hard commodities is in contango which means the yield curve is always sloping upwards, Silver did see a one day backwardation in the 80’s (due to moving it from the COMEX to to CBOT warehouse). Gold is seen as a true preserver of wealth and at a time where many feel even cash may become trash it is getting more focus than ever.
In this post we will examine some of the likely fallout from the credit crunch. What we have seen developing in the world has shown that the international aspects of finance as well as the magnification of leverage are at the root of many of the problems. There has never been a more exciting time to be alive in the finance industry and while some pundits cite the Great Depression in every second sentence I believe that while the numbers and percentages might thwart every record hit, that the actual real economy fallout will not rival that of the Depression era.
Regulation: Regulation is likely to feature much more heavily in business, in particular in financial services, last week Patrick Neary called on all Stockbrokers to give the Financial Regulator an audit of their firms, they can do the audit themselves but they must get it done ASAP in order to demonstrate that client funds are fully protected.
In the mortgage and personal finance field we are likely to see increased regulation, …