Rolfe Winkler

Easy money reflating house prices

June 30, 2009


My colleague Chris Swann says to beware of housing false dawns. I couldn’t agree more.  While the pace of decline in house prices moderated in April, one has to consider the stupendous monetary stimulus that helped drive that improvement.  With rates about as low as they can go, the only way to drive a sustainable increase in prices is to increase buyers’ income.  With the employment picture continuing to deteriorate, don’t look for rising incomes any time soon.

Lunchtime Links 6-30

June 30, 2009

(Send links, pics, vids to rolfe.winkler at thomsonreuters)

The Cost Conundrum: What a Texas town can teach us about health care (New Yorker)  Lawyers and insurance companies get the lion’s share of blame for running up health costs in the U.S.  This piece argues convincingly that doctors themselves are deserve a good deal of blame for over-prescribing unnecessary and very expensive medical procedures.

Just say no to banks

June 30, 2009

— Rolfe Winkler is a Reuters columnist. The views expressed are his own —

NEW YORK, June 30 (Reuters) – When it comes to taxpayers’ money, the chutzpah of banks knows no bounds. Take Guaranty Financial Group, a Texas savings and loan, which said in a filing last month that there was “substantial doubt” that it can continue as a going concern. Now it is calling for an unusual government lifeline.

Lunchtime Links 6-29

June 29, 2009

(Send links, pics, vids to optionarmageddon at gmail)

Madoff gets 150 years, applause as judge announces sentence (Reuters)

China’s banks are an accident waiting to happen (Telegraph)  Bank balance sheets are much messier in China compared to the U.S.  For the moment, though, China is still at high tide.  Those swimming naked aren’t being exposed.

Busy Friday

June 27, 2009

FDIC announced five more bank seizures this evening, two of which are in Georgia, the Chernobyl of Banking.  None of the five will be a big drain on the Deposit Insurance Fund, but, as noted at the bottom, there’s another DIF-related issue that bears watching.

Lunchtime Links 6-26

June 26, 2009

(Send links, videos, pics to optionarmageddon at gmail with subject “link”)

China Wants Super-Sovereign Currency (Reuters)  Particularly ironic: “In thinly-veiled criticism of loose U.S. monetary and fiscal policies, the PBOC urged the International Monetary Fund to exercise closer supervision of the economic and financial policies of major reserve-issuing countries.” The Rubin/Summers/Geithner prescription delivered to Asia via IMF hammered those economies in the short-run, but helped stabilize them in the long run.  It’s what we need now.  Monetary and fiscal stimulus are counterproductive when in debt.

“There were no discussions on AIG”

June 26, 2009

I’m sorry I missed this CNBC interview last week with Robert Wolf, chief of UBS Investment Bank in the U.S.  There’s a remarkably eye-opening sound bite.   (hat tip M. Mayer)

The Temporary Problem

June 26, 2009

— Rolfe Winkler is a Reuters columnist. The views expressed are his own —

NEW YORK, June 25 (Reuters) – “Nothing is so permanent as a temporary government program,” Milton Friedman said. That’s the danger of the financial bailout programs, as officials hesitate over whether to start taking them down. The larger risk is that not removing them will inflate a bigger credit bubble.

Evening Links 6-24

June 25, 2009

The Great American Bubble Machine (Rolling Stone via ZH) Matt Taibbi strikes again, this time taking on Goldman Sachs. What makes the story so refreshing is the language RS lets Taibbi use. The fraud and corruption occurring at the highest levels of finance is obscene; Taibbi describes it with obscenities.

Taxpayers to support higher Citi salaries

June 25, 2009

From NYT:

After all those losses and bailouts, rank-and-file employees of Citigroup are getting some good news: their salaries are going up….

Getting up to speed

June 24, 2009

Hi Reuters readers.  Happy to have joined the team.  Looking forward to blogging about all things financial and economic.