Category: Business & Economy

“As soon as lenders (and the investors behind them) get overconfident that they have better models and can make excess profits by disrespecting credit risk, they always get their hats handed to them sooner or later. The mortgage market learned this lesson at the expense of the entire global financial system, and it is playing out now in a micro-level, in the ABS market for subprime auto loans.”

Say’s Law of markets is a particularly potent antidote to worries about automation, displaced workers, the so-called “economic singularity” as well as any fears about a re-distributive shift in income from the poor to the rich from machines.

Retail bankruptcies soared 110% in the first half from the year-ago period, accounting for $6 billion in debt. The list includes name brands such as Gymboree, Payless, rue 21 and the Limited, all of which cited the Amazon affect as a contributor to their downfall.

There is no way that this is going to end well. “…our highly levered financial system is like a truckload of nitro glycerin on a bumpy road…”

The many flaws of survey data makes it a rather questionable foundation for economic science.