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Fundamental Analysis

Federal Reserve Toxic Assets

By Jonathan Yates (May 2011) Back offices are notoriously the weaknesses in financial institutions for a variety of factors.   The most obvious is that the back office is not a revenue producer.  It does not bring in the earnings that a trader or investment banker does.  As a result, it will nev

Market Directions: The German Reformation

The political history of Europe since Bismarck’s unification of Germany in 1871 has been the struggle of the European nations to contain the military, political and economic might of Germany. Germany has fought three wars in two centuries, the Franco-Prussian in 1870, and the First and Second Worl

The ECB Gets on Board

In politics it is a good idea to agree with ones bosses in public whatever your private opinion may be. Jean Claude Trichet, the President of the European Central Bank was just reminded of this basic law of political survival. Yesterday, and for weeks before, he had been opposed to IMF involvement

Honest Corruption

The Federal Reserve has paid a year long bribe to the housing market to keep mortgage rates almost a full point below average. The $1.25 trillion payoff also known as the Mortgage Backed Security purchase program is about to end. Will the mortgage market stay bought? Honest corruption is when a brib

Japan: An Inflationary Spiral Ahead?

During the past few years you have most likely read about Japan’s so-called lost decade or its so-called deflationary malaise. And you may have heard warnings that the Japanese experience might be the dire blueprint for what’s to come in the U.S. Since there are some striking similaritie

Unemployment Is the Most Important Challenge for the U.S

From the start of the economic and financial crisis that began in 2007, I made it clear that this was not a garden variety recession. Instead, I said, it was the aftermath of the bursting of the largest real estate bubble the world had ever seen. Many developments of the past three years support my

Time’s Person of the Year Drives the Crisis Spiral By Claus Vogt

Fed President Ben Bernanke has been named Time magazine’s Person of the Year for 2009. However, in looking back at former People of the Year it becomes crystal clear that this title doesn’t necessarily mean that the honored person has done something good for the world … It only mea

Birth and Death in Non Farm Payrolls

The Non Farm Payrolls (NFP) is the most influential American economic statistic. In tracking the formation and destruction of employment in the United States the NFP provides a reliable view of the future course of the economy. If the United States cannot generate jobs to replace the more than seven

The Many Faces of Unemployment

Last Friday we got word that the employment picture in the U.S. improved substantially over the month of November. According to the Labor Department, the nation shed 11,000 jobs, a mere fraction of the 130,000 economists were expecting. The news came as a shock to many. In fact, president Obama repo

A Conversation with John

This week I am in New York, and have a whirlwind of meetings (and I admit, a lot of fun on the side) and not much time to write. I have been saving today’s letter for a month or so, for a time such as this. Damien Hoffman of the Wall Street Cheat Sheet interviewed me and posted the transcript