James Saft

James Saft is a Reuters columnist. The opinions expressed are his own.

Jamie Dimon is just doing his job, which is why it is more important than ever that Ben Bernanke do a better job at his.

Dimon, JP Morgan Chase & Co Chairman and CEO, staged an unusual confrontation with the Federal Reserve Chairman at a conference in Atlanta on Tuesday, drawing a line between tighter banking regulation, heavier capital requirements and slow growth and joblessness.

“Has anyone bothered to study the cumulative effect of all these things?” Dimon asked.

“And do you have a fear, like I do, that when we look back and look at them all that they will be a reason it took so long that our banks, our credit, our businesses and most importantly, job creation, started going again?”

Well Jamie, I have other fears that outweigh yours; that you, your bank and others like it will use your positional advantage to extract wealth from the economy which exceeds, on a risk-adjusted basis, the value you add. What’s more, you will do so by arbitraging a government guarantee that will allow you to make profits all the while building risks that, when they explode, will become taxpayer liabilities.

James Saft is a Reuters columnist. The opinions expressed are his own.

First came the realization that U.S. economic growth was fading. Now comes the dawning feeling that no meaningful help is on the way.

There is no sign of significant new stimulative government spending and little chance that the Federal Reserve will be willing, much less able, to follow up with another round of quantitative easing.

As for the global economy, Europe is in its own crisis and that transition to a consumer economy in China is going to take a while.

James Saft is a Reuters columnist. The opinions expressed are his own.

HUNTSVILLE, Ala. — British banks are being surprisingly generous with troubled homeowners, raising red flags over the health of the housing market and their own earnings.

An investigation by Britain’s Financial Services Authority found that 63 percent of all troubled home loans have been switched onto some form of forbearance, typically ones that make the loan interest-only or extend the repayment period.

Some 3 percent of borrowers, or 300,000, with mortgages totaling 60 billion pounds ($97 billion) have switched to interest-only mortgages, under which no principal is retired, since the onset of the financial crisis in 2007, according to the FSA.

James Saft is a Reuters columnist. The opinions expressed are his own.

HUNTSVILLE, Ala. — Housing in the U.S. is in the midst of a double dip in prices, a threat to the economic health of banks, households and the country itself.

S&P Case-Shiller will release on Tuesday their house price index, which will likely show a fall to a new post-bubble low, with prices now back to where they were in the middle of 2003.

House prices have hit a new post-bubble low, down almost a third from their 2006 peak, according to data released on Tuesday by S&P Case-Shiller.

James Saft is a Reuters columnist. The opinions expressed are his own.

HUNTSVILLE, Ala. — With just a month to go until the Federal Reserve brings QE2 to a close, most analysts are focused on the risks to markets if interest rates shoot higher when the government is no longer buying its own debt.

But an alternative is worth considering: what if this buying binge by the Fed is followed not by that fire but by the ice of sinking yields and another lurch towards deflation.

Albert Edwards, a trenchantly bearish strategist at Societe Generale, maintains that Treasury yields are heading lower and that this will be accompanied by the mother of all busts on the stock market, taking the S&P 500, currently at about 1,325 points, to 400.

James Saft is a Reuters columnist. The opinions expressed are his own.

HUNTSVILLE, Ala. — With QE2 set to end in five weeks and with Greece rolling downhill towards default, the world is not best placed to withstand a weakening economy.

That, however, is exactly what looks to be happening, as Asian demand is hit by a cooling China and a struggling Japan.

Let’s take a look at the evidence:

Japan’s economy shrank by 0.9 percent in the three months to March, battered by the earthquake, tsunami and ongoing nuclear fiasco.

James Saft is a Reuters columnist. The opinions expressed are his own.

HUNTSVILLE, Ala. — While the U.S. will fight it kicking and screaming, the dollar’s upcoming fall from its central global role will be a blessing all round.

The World Bank on Tuesday predicted that the dollar will lose its place by 2025 as the principle global reserve currency, to be supplanted by a multipolar world where it, the euro and the yuan will share top billing.

First off, things have come to a sorry pass when the dollar is going to lose out to two currencies of which one, the euro, many people worry may cease to exist, and the other, the yuan, isn’t even properly convertible.

James Saft is a Reuters columnist. The opinions expressed are his own.

There are signs that China’s stupendous debt-fueled boom is cooling, posing new risks for global growth and markets.

The People’s Bank of China on Thursday raised the bank reserve requirement ratio to a record 21 percent, a rise of a half a percentage point and the fifth so far this year. The move, effectively a tightening of monetary policy, comes as inflation at 5.3 percent remains high and industrial output slides, albeit to a still high 13.4 percent in the year to April.

China is an economy addicted to investment, a sort of fun house mirror of the U.S.’s addiction to consumption, with an astounding 93 percent of GDP growth in 2009 attributable to investment.

James Saft is a Reuters columnist. The opinions expressed are his own.

HUNTSVILLE — If you as an investor think that insider dealers like Raj Rajaratnam are a top concern then I have a bridge, or perhaps an intricate highly-structured investment vehicle, to sell  you.

Rajaratnam, the erstwhile billionaire and founder of hedge fund Galleon Group, was found guilty of 14 counts of securities fraud and conspiracy charges on Wednesday in a case that unveiled multiple instances of Rajaratnam obtaining and acting on inside information.

This has prompted all sorts of silliness to be asserted to the effect that the conviction will either restore investors’ faith in U.S. financial markets or stand as a testament to why investors don’t believe they will get a fair shake.

James Saft is a Reuters columnist. The opinions expressed are his own.

Greece cannot be saved without debt relief, and debt relief for Greece may mean what amounts to a mass Jubilee with debt write-offs and recapitalizations needed for weak banks and nations across the euro zone.

Little wonder that officials delay, deny and only belatedly try to negotiate openly with reality.

Greece’s credit rating was downgraded by Standard & Poor’s to B on Monday, taking it two steps further into junk territory, just days after a secret meeting of euro zone finance ministers  gave rise to rumors that the country would soon leave the common currency zone.