The market is cheap! No! It’s expensive!
The market’s price earnings ratio is lowish suggesting good returns ahead. But the long-term PE is high, suggesting we’re doomed. Can they both be right?
CXO Blog says shares are good value. Price to earnings ratios remain at or below both their 17-year and three-year averages, with current levels and earnings forecasts suggesting good returns for [...]
Selling Northern Rock
It would be ironic, but it seems destined, that the credit squeeze that stopped the buyout business in its tracks looks set to jolt it back into action. Dealbook speculates that Northern Rock is headed for the block.
Scott Moeller, ceo of executive education at Cass Business School and author of a book on mergers and [...]
Was Northern Rock threatened by insolvency?
One thing that’s bothering me. The FSA says Northern Rock is solvent. But if it’s solvent, why does it need to tap the Bank of England for credit?
I think the answer lies in today’s trading update:
While Northern Rock has continued to raise new funds, these have been mainly in the short term wholesale debt markets [...]
Northern Rocky
Northern Rock has called on the Bank of England as lender of last resort.
It sounds portentous: On the Financial Services Authority’s recommendation, and on the chancellor’s authority, the Bank of England is providing “liquidity support“, aka a “bail out”, to Northern Rock in the form of credit at penal rates guaranteed against its assets.
The FSA [...]
Notable #1
Because one viewpoint is never enough, here’s some links to what I’m reading:
The Thing from another market!
The stock market is infected by fear and paranoia from the lonely wastelands of the debt market. But if it’s fear of the unknown that’s causing the panic, we need to face it, not run blindly.
I’m starting this blog with a quote from a press release from Fisher Investments. But first, to explain the picture, [...]
It’s the rebound that kills
A salutary lesson from crashes past is that it’s not necessarily the bear market that kills, but the recovery. Not that this market is a bear market. I’m just thinking ahead
Having finished my holiday read in the early ours of Monday morning (Glasshouse by Charles Stross, a book I found in Mark Andreessen’s [...]
Stepping back from market madness
The crisis in the markets is all about profitability and debt. But to begin to understand it, you have to take a step back from the madness.
I’m off on holiday tomorrow. With the market running wild, it’s a nervy time to be away, so I thought I’d sign-off by trying to put things in [...]
The funny side of sub-prime
In case the last post depressed you. In the US, the Colbert Report is a kind of one man ‘Have I Got News for You‘. Jim Cramer is a celebrity market pundit, former hedge fund manager, and self-confessed sharp practitioner. Yet Cramer is more concerned about dissposessed homeowners than turmoil in the debt markets and [...]
This is what the end of capitalism is like…
When you woke up this morning it may have felt as if the end of capitalism was nigh. That’s unlikely, when you consider what the end of capitalism would really feel like.
Listening to Bloomberg Radio, the headlines seem mildly apocalyptic. Fears that defaulting US mortgage holders will lead to global debt contagion re-emerged as BNP [...]
