Feature Article
Level 3 Assets Growing in All Five U.S. Investment Banks
The SEC will require Wall Street firms to report on their capital and liquidity levels in, “terms the market can readily understand and digest.” Aha! So we will now know who has more dodgy assets than real capital. Of course, we already do know quite a bit. A new accounting rule last November required banks to report their assets in three categories, from easiest to sell and value (Level 1) to hardest to sell and value (Level 3). Write-downs in level 3 assets directly affect a bank’s capital.
Dan Denning | May 8th, 2008 | Continued
Feature Article
No Modern Government Policy is So Stupid that the Romans Didn’t Think of it First
As a business model, Rome’s strategy was obviously flawed; like a credit bubble, it required constant expansion. Still it was nice in the beginning. The early days of the Roman Empire were like the early days of the British Empire or the American Hegemony. Expansion opened up new markets and brought in new supplies of raw materials at better prices. Not only was there booty; there were also slaves.
Bill Bonner | May 8th, 2008 | Continued
Feature Article
Chinese Steel Price to Rise in Wake of Coal and Iron Price Hike
What a spectacle in the energy and resource markets. The deep-freeze in the iron ore negotiations between Aussie producers and Chinese steel makers appears to be thawing. Yesterday’s Financial Review reports that the number we’ve all been waiting for here is: eighty five. That’s the percentage increase in the annual iron ore contract price Aussie producers charge major Chinese steel makers.
Dan Denning | May 7th, 2008 | Continued
Feature Article
Oil Price Chart Shows Slight “Correction” in Near Future
The price of oil just keeps going up. It reached nearly US$123 in New York trading over night. The Masters of the World at Goldman Sachs repeated their claim that a ’super spike’ in the oil price could drive it to US$200, on the back of red-hot demand in the developing world and the “non-recession” in the U.S. Supply bottlenecks won’t help. The increase in the oil price between 2001 and 2006 was a structural revaluation of oil’s value to the global economy.
Dan Denning | May 7th, 2008 | Continued
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