Gang, things aren't getting rosier. Need proof? More bankruptcies are coming:
More bankrupt consumers means fewer shoppers at your local mall. That means retail bankruptcies, then commercial property bankruptcies. More bankrupt homeowners means fewer home mortgages get paid off. That means more bankrupt banks.
Corporate treasurers see the warning signs of a future cash crunch. They're being proactive. By contrast, the Fed is reluctantly preparing to launch its Plan C after problems in commercial real estate have become obvious. They're being reactive. Why is it that measures of market volatility can anticipate the trouble ahead but policymakers can't? I'll answer my own question. It's not that they can't anticipate trouble; they simply won't because it would be an admission that stimulus measures have failed. Mr. Market can't be fooled for long.
Nota bene: Anthony J. Alfidi is short uncovered calls on SPY and IWM.
More than 126,000 consumers filed for bankruptcy in the U.S. last month, 34 percent more than in July 2008, the ABI said in its latest report on Aug. 4. The increase came after a 36.5 percent rise in personal bankruptcies nationwide in the first six months, to 675,351, according to the ABI research group, which interprets data collected by the National Bankruptcy Research Center.
More bankrupt consumers means fewer shoppers at your local mall. That means retail bankruptcies, then commercial property bankruptcies. More bankrupt homeowners means fewer home mortgages get paid off. That means more bankrupt banks.
Corporate treasurers see the warning signs of a future cash crunch. They're being proactive. By contrast, the Fed is reluctantly preparing to launch its Plan C after problems in commercial real estate have become obvious. They're being reactive. Why is it that measures of market volatility can anticipate the trouble ahead but policymakers can't? I'll answer my own question. It's not that they can't anticipate trouble; they simply won't because it would be an admission that stimulus measures have failed. Mr. Market can't be fooled for long.
Nota bene: Anthony J. Alfidi is short uncovered calls on SPY and IWM.
