The Finance MBA by Business Compass LLC (playlist)

The Finance MBA by Business Compass LLC (playlist)

Increased demand for non-FDIC backed debt offering

Banks have offered billions of $ of debt that is not guaranteed by FDIC. Yet, there is high demand for the debt. That is a good indication that the investors are believing in the capital markets; especially, the banks. Return of confidence is good for capitalism.

Rising commodities - true demand vs. speculative trading

Rising price of commodities bode well for economic growth. At the same time, it brings inflation alive. Regulators must be vigilant to ensure the rising price is due to demand instead of speculative trading.

Taming 2 Trillion Dollar Budget Deficit

Stimulus spending was required to jump-start the economy. GDP has fallen. so has export. Tax base can not be raised to cover for the whopping budget short-fall. Now, the government must look into ways to reduce budget so that money printing press does not overwork.

Housing sector - pending home sales vs. housing start

Pending home sales data indicates that the tax incentive issued by the administration is aiding home sales. However, the housing start is falling which is indicating the reverse trend. But, in the days of uncertainly like this, putting deposit down for a new house is risky while good value is found in existing houses.

Chrysler and GM Chapter 11 - important to economic recovery

Fairness of the treatment of secured bond holders in case of Chrysler and unsecured bond holders in case of GM is questionable. However, the threat of bankruptcy has enabled these companies to close competitive gap in labor contract. The speed at which Chrysler is emerging from bankruptcy is remarkable. I hope GM speeds through Chapter 11 the same way.