The number of new housing starts reported in April was a big disappointment. The 523,000 starts didn’t even break into the consensus range predicted by a Bloomberg survey of economists. The economists figured on 570,000 starts as the most likely number, but were disappointed when results came in 8.2% below their expectations. There were regional pockets where the numbers looked very bad. In the South, the number of new housing starts fell by 23% compared to March, the largest single-month decline since 1988. There were only 255,000 housing units started in the South in April, the lowest … [Read more...]
China Ghost Cities
Jack Bogle on Risks of U.S. Debt
Watch the latest video at video.foxbusiness.com … [Read more...]
Readers Roundup
Enough With the Low Interest Rates! by Charles S. Schwab, The Wall Street Journal “The negative impact of current policy is clear. The near-zero interest rate experiment is weighing on consumer and investor confidence, and the Fed signals its lack of confidence with each "extended period" proclamation…Small businesses that create jobs are unable to borrow in any meaningful amounts except via 100% collateralized loans. Banks continue to hold large capital bases, mostly because they have no definitive signal yet from the federal government or regulators about what their capital requirements … [Read more...]
China’s Real Inflation Rate
What's China's Real Inflation Rate? by Dexter Roberts, Bloomberg Businessweek "There has been a jump in prices that isn't reflected in the numbers," says Chinese Academy of Social Sciences economist Yu Yongding, who formerly served as an adviser to China's central bank…Another sign of rising prices: Multinationals in China expect to hike wages an average of 8.4 percent this year, according to human resources consultant Hewitt Associates (HEW). Ordinary Chinese, meanwhile don't see the steep jumps in their housing, education, and medical expenses reflected in the official stats. "Inflation … [Read more...]
A CEO Polygraph
How Can You Tell If A CEO Is Lying? – Kyle Stock, DealJournal, The Wall Street Journal Conference call Q&As are a confusing and cryptic dance. Executives try to be attractive to investors, without giving away too much. In many cases, they are trying to put a good spin on bad results. But what if an investor could read right through all of the posturing and careful prose to know if they were being strung along? A pair of professors at Stanford recently tried to do just that. The team built a model that tries to flush out executive lies, using psychological and linguistic studies … [Read more...]
Quotable
From the July 28, 2010 Financial Times, Vulnerable to Vertigo “Using past forecast errors as a guide, the new UK Office for Budget Responsibility sees an 80 per cent chance that the British economy will grow between a negative 0.4 per cent and a positive 4.7 per cent in 2011, a range so wide it encompasses both boom and bust. Not much more helpful in diving the future is its calculation that there is a 50:50 chance that 2011 growth will be below 1.2 per cent or above 3.9 per cent.” From Andrew Ross Sorkin’s Too Big to Fail “Not everyone at the Fed was in agreement with Geithner’s … [Read more...]