International Investing

How bad is the current wave of downgrades compared with the past? Literally, unprecedented.
Considering that, according to Financial News Online, nearly 20,000 downgrades have been announced this year. That compares with 2,539 for all of 2006. That’s stunning. Even more troubling: the number of highly rated securities that have been downgraded. AAA downgrades are hitting [...]

But not for much longer, and the fallout in the municipal bond sector will have far reaching consequences. At a minimum it will highlight to the general public, more so than the housing crisis, how arbitrary published ratings are. The entire process is corrupt. Read more about this absurdity here:
Last week, credit- default swaps tied [...]

Anyone familiar with the history of State intervention in the market should be dismayed at the current bailout proposal. For historical perspective, here is an excerpt from Garet Garrett’s The People’s Pottage. The more things change…:
In a Fireside Chat, October 22, 1933, the President said: “I have publicly asked that foreclosures on farms and chattels [...]

Maybe Bush can propose an auto bailout to match the housing one. WSJ has the story about increasing delinquencies here:

First came housing loans and the subprime-mortgage crisis.
Now, signs of stress are creeping into another key consumer area: auto loans.
Delinquencies in the auto-loan market are ticking up to their highest level in several years. Lenders are [...]

To people buy homes just to avoid the stigma of renting? Homeguide123 explains why that mindset is foolish for the current market conditions.
If you want to play it smart during a housing bubble, renting is the best thing you can do. Renting is not risky. Unlike the people who bought in the last decade (or [...]

Why didn’t Goldman get in on the action? Probably because the fee was too low:

BlackRock has been turned to for advice in previous times of turmoil. The firm worked with the Federal Deposit Insurance Corp. and the Resolution Trust Corp. during the savings-and-loan crisis. And in 1994 it advised General Electric Co. after its Kidder [...]

Imagine if all of those derivatives floating around were not secured at all. If the security for the CDO’s was non-existent how would you price it? Deutsche Bank is probably considering the question now after a district court ruling prevented the bank from foreclosing on defaulted mortgages:
A U.S. District Court judge in Cleveland tossed out [...]

This tip from the Daily Reckoning:
For the first time in years, the dividend yield on Japanese stocks (as measured by the Topix index, which is broader than the Nikkei) moved higher than the yield on government bonds. This is a very big deal.”
Now, you can get more yield from a Japanese stock than from a [...]