Archive for March 8th, 2010

International Women’s Day

Monday, March 8th, 2010

Today’s theme is equal rights, equal opportunities and progress for all.

Not much worth celebrating until the following are addressed:

*The majority of the world’s 1.3 billion absolute poor are women.

*On average, women receive between 30 percent and 40 percent less pay than men earn for the same work.

*Women also continue to be victims of violence, with rape and domestic violence listed as significant causes of disability and death among women worldwide.

Gorilla thinks: “If women ran the world, you can bet the world would be better off!”

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The Shorts Take Off

Monday, March 8th, 2010

Short sales are coming back big time, as the Administration tries yet again to prop up the housing market.

Having failed to bribe mortgage brokers to alter loans, the next bright idea is to bribe underwater homeowners.

And it won’t work, because nobody really knows how low prices will go, second/third mortgage lenders will want to be paid, and there’s no evidence of any pent-up demand in an economy with 10% unemployment and 23% of homeowners under water.

So, expect at least another 10-15% decline in house prices and more short sales in the next 12 months, as bankers do their very best to avoid the reality of their balance sheets.

The most sensible approach, namely having bankruptcy judges reduce mortgage principal and force the bankers to make a deal, has already been voted down twice in Congress.

Gorilla says: “Extend and pretend will morph into short to abort!”

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Oversight? No Sight!

Monday, March 8th, 2010

The financial reform bill is dead in the water, and it’s just as well.

The problem isn’t that the system lacks regulation, the problem is that the regulators didn’t do their jobs properly.

There’s no evidence they’ll do any better next time, and no willingness on the part of Wall Street’s captive legislators to take the banks on.

So, we can all start waiting around for the next bubble to burst: dollar carry trade, Chinese real estate, currency default swaps, or whatever it is our valiant regulators continue to ignore.

Gorilla says: “The rich man has already passed through the eye of the needle into deregulated heaven!”

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Give Me Appreciation, But Not Yet

Monday, March 8th, 2010

China says the yuan will go up against the dollar, but it’s not ready to say when.

Meanwhile, the beggar thy neighbor approach of Chinese mercantilism has cost at least a million jobs in the US.

The need for the yuan to go up is clear (on the order of 20-40%), as is the need for the dollar to decline further.

Global trade balances will begin to even out, and the prospect of retaliatory policies will diminish.

Gorilla says: “We need more from column renminbi!”

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