Interest rates are coming down? At Tuesday’s Fed meeting, the Board of Governors voted to lower interest rates by 25 basis points, and will now be targeting a range of 4.00% – 4.25%. They also hinted, in typical Fed speak, that additional modest rate cuts would be expected later this year. While this outcome was largely anticipated by financial markets, it is still a positive economic indicator. Generally speaking, when interest rates fall: Mortgage rates […]
Back in 2006 someone walked into my office with an impossible mortgage. Countrywide Bank gave a 70 year old a 30 year mortgage for more than 100% the value of her house. She was underwater the day she closed, with no possible way to ever sell that house. I was aghast, and wondered what was going on that Countrywide was willing to take on risk like that. I didn’t quite understand the whole securitization of […]
I heard Gary Shilling speak at a conference last month and his discussion of demographics was interesting and insightful so I sought out his most recent book: “The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation”. This book was 500 pages long. Five hundred. I told B. I felt like I was taking a graduate level course in economic forecasting. I’m not even sure how to integrate this book into […]
Lord Keynes is said to have quipped a response to Hayek’s analysis of what happens in the long run: “In the long run, we’re all dead.” Guess what? You and I, Dear Reader, are not dead. It turns out Hayek was right and Keynes was too short-sighted. This book was written 70 years ago and is so devastatingly right in its predictions and analysis that it’s stunning that it hasn’t been more widely taught and […]
