Zombie GM Stock is Proof Humans Are Not Rational

I have mentioned this in the past, but its one of those absurdities that refuses to die: “Whether it’s a matter of ignorance or greed, people are still buying General Motors stock, even though the company and the government have warned that the shares will someday be worthless. Investors are picking up millions of shares […]

Fun with Derivatives

Fresh off my vacation, I have jury duty tomorrow, but today I got a jump on my fun reading for the courthouse – Traders, Guns, & Money, the anecdote-packed overview of derivatives by Satyajit Das, a prolific consultant, author, and commentator on the topic. Das says that his book “does not attempt to make a […]

Getting Bearish Again

You have probably noticed a change in tone at Credit Writedowns since about June, but a lot more in the past month or so. Once mildly bullish due to the deeply oversold levels this Spring, I have become increasingly alarmed at the unjustified strength of the recent market rally. My most recent post explaining my […]

Global Stock Markets – Pop ‘N Drop

I have written a fair bit over the past few days about the overbought level of most global stock markets and also how China – a leading market on the way up – could be the catalyst for triggering a reversal of fortune. It would seem the expected downward correction is now squarely under way […]

Beijing Car Sales Tick to 1,200/Day

It is staggering the pace at which new autos are hitting the roads of Beijing, with the rate now touching 1,200 a day. After passing the U.S. in terms of new car sales earlier this year, the citizens of China seem eager to make up for lost time in getting to developed world levels of […]

Is The “Real” Yield on the Nominal 10-Year Real?

The highest real (inflation-adjusted) yields in 15 years for Treasuries are boosting demand, Bloomberg reported at the end of last month. Halfway through August, there’s no reason to think otherwise. The 10-year’s yield hasn’t changed much in recent weeks, closing yesterday at roughly 3.59%. Meanwhile, inflation, as defined by the consumer price index, appears in […]

Ain’t Misbehavioral

No kidding, I received an abstract of this paper in an email newsletter recently: Effect of wind on stock market returns: evidence from European markets …………… Applied Financial Economics, 2009, vol. 19, issue 11, pages 893-904 Abstract: Environmental psychology studies have found evidence that wind speed has a strong influence on mood and comfort. This […]