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A look at economics, markets, finance and the irrational human being

Random Thoughts for Random Markets

Strong commodity markets create winners and losers. For example, cotton prices remain 100% higher than a year ago even after a 30% correction. Companies like Carters which make baby clothes and ladies underwear and sell mostly through Walmart will struggle to pass on costs. Abercrombie and Fitch and Ralph Lauren will find it easier to
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Housing And The Current US Recession.

At the heart of the credit crisis in 2007/2008 was the US housing market. The almost one way growth of housing prices led many to discount the possibility of declining prices. Rising prices fed consumption in the form of home equity loans and home equity lines of credit. It also drove consumers to spend not
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The US government should buy houses.

Ever since the great financial crisis even the most ardent capitalist has had his faith in laissez faire economics shaken.
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Should We Take A Second Look at Japan?

  Can the stock market rise when the economy is faltering? As long as monetary conditions are exceptionally loose, the answer is yes. But there are limitations.
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Fed Policy and Other Distractions

While the Fed declared that it would continue its purchases of US treasuries under so-called QE2 until the end of June, it also waffled and said that it would maintain its balance sheet going forward until inflation forced their hand to tighten. Breakevens rose, gold rose, stocks rose, US treasuries hardly budged.
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