Commentaries
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from Rolfe Winkler:
Lunchtime Links 12-8
(Reader note: still working on the bugs....please click "continue reading" to see all the links)
Banks, U.S. spar over TARP repayment (David Enrich) This is the kind of thing that gives me a better feeling about Tim Geithner and Ben Bernanke. They are hammering banks to raise equity capital to get out of TARP. They have leverage and are using it productively, forcing bank shareholders to eat losses via dilution so that balance sheets are more stable. Great! Stick to your guns guys!
Questioning the unemployment rate (Kaminska, Alphaville) Dennis Gartman doesn't buy the good news in the jobs report.
FASB wants accounting standards "decoupled" from bank capital rules (Norris, NYT) Can you blame 'em? Seems to me Bob Herz just wants to be left alone. If regulators want to give banks more slack, fine.
from Rolfe Winkler:
Rosenberg: “Welcome to the era of consumer frugality”
Gluskin Sheff's David Rosenberg on last week's consumer credit figures.
U.S. consumer credit outstanding fell $10 billion in June, the fifth decline in a row during which the debt balance has shrunk $60 billion or 5.5% at an annual rate. Both figures are unprecedented. As the chart below shows, the YoY trend, at -2.8%, is also running at its steepest contractionary rate in over five decades. Welcome to the new paradigm of savings, asset liquidation and debt repayment [in] the era of consumer frugality. After 20 years of living beyond their means, American consumers will be spending the next several years living below their means, and no, this will not be the end of the world, but it will put a firm ceiling on overall demand growth for some time to come.
Here's the chart to which he refers (click to enlarge in new window):
The chart depicts the growth of consumer credit. Not the total level. Consumer credit isn't actually contracting unless the line goes below 0%. And this excludes mortgage debt.
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The Wall
