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Cartoon Capitalism
There is important news. And there is entertaining news.
Today’s most important story comes to us from the Financial Times:
“Biggest dive for commodities in 28 years,” says the headline. It is important because it is likely to give people the wrong idea.
Oil dropped another $2.74. Clearly, the peak has come and gone. The black goo hit $147 and has been in retreat ever since.
Gold is down too. It rose $10 yesterday, bringing the price back to $922. For a moment, it looked as though we’d have a chance to buy below $900. But the yellow metal is fighting hard to stay…
4Aug2008 | Daily Reckoning | Comments Off | ContinuedWith Much Blood-Letting to Come, the U.S. Housing Finance System Needs Replacing
In much of the discussion about the collapse of the U.S. housing market, commentators have assumed that the massive run-up in property prices that preceded the subprime-mortgage meltdown were simply the result of a speculative frenzy that became a full-fledged market bubble.
But that’s not the case at all.
You see, the bubble and subsequent crash were inevitable under the current system of housing finance. Fundamental changes must be made.
Standard and Poor’s recently projected the likely future loss rate on the $650 billion of subprime-mortgage-backed securities that are still out in the marketplace. From that we can estimate the losses S&P is…
2May2008 | Money Morning | Comments Off | Continued
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