Klein's Commentary

Go beyond the headlines

Financial Deception, Not Just for Wall Street Anymore

Were the financial mess in Europe not enough to make people wonder about the health of the global economy another banking scandal erupted, this time in the UK. Collusion on bank-to-bank lending rates first discovered at Barclay’s are now suspected across a number of other banks. Not only do these rates directly impact financial performance,…

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A Tentative Peace, More War

China and the Philippines withdrew their ships from the Scarborough Shoal after a tense standoff in contested fishing waters. Wars have started over lesser disagreements. There’s no end sight to the cycle of provocation and pushback. ASEAN has failed to act – non-claimant states are loathe to risk their economic relations with China by siding…

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Blinded by the Euro Light

Hopes for a breakthrough on several fronts in the global economy came to naught this week. EU leaders met, and discussed, and discussed some more. Solutions to the spread of financial distress affecting France, Italy, Greece, Spain, and Cyprus appeared at hand. Markets rallied after the European Stabilization Fund was announced which would buy sovereign…

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Walking Backwards Into the Future

In a 5-4 Supreme Court ruling upholding President Obama’s healthcare bill the U.S. finally joined the rest of the developed world of 60 years ago with universal coverage. Perhaps Americans can now rest a bit easier knowing that in 2014 they won’t be denied healthcare for pre-existing conditions. The 20-30% annual premium increases may even…

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Mid-Day Note: Global Economic Data Disappoints

U.S. economy still lags. Today’s U.S. housing and consumer confidence figures failed to signal a real economic rebound. This after Moody’s downgrades of fifteen banks last week, including Goldman Sachs, and earlier Federal Reserve data* showing U.S. household net wealth plunging over 40 percent between 2007-2010. That’s an entire generation of wealth creation gone in…

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Death by a Thousand Dialogues

The currency of diplomacy is conversation and there’s no shortage of that commodity. A host of international gatherings took place recently including the G20 in the beach-side resort of Los Cabos, Mexico and the Rio +20 Environmental Summit in Brazil. Others have finished without the usual fanfare including the U.S.-China Strategic and Economic Dialogue which…

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Euro In or Euro Out?

A wave of relief greeted overseas markets last night after Greece’s second round election results came in. New Democracy (a pro-bailout party) won approximately 30% of the vote, narrowly defeating Syriza (anti-bailout) with 27%. Initial sentiment favored the stability of the European Union and the Euro as its currency. Optimism quickly faded as more practical…

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China’s Foreign Banking Troubles

In James McGregor’s 2005 book “One Billion Customers” eager investors were warned about the pitfalls of doing business in China. Many U.S. firms, mostly large and concentrated in the hotel, machinery, commodities, and higher-end consumer goods segments have overcome these challenges and done spectacularly well. Financial firms on the other hand have hit a policy…

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Are ETFs the New CDOs?

As if the wizards of finance hadn’t done enough already. Remember when collateralized debt offerings (CDOs) entered common usage? Mortgages were sliced up, repackaged, and re-sold into “synthetic” products barely resembling the underlying property on which they were supposedly based. Sounds a lot like how bologna is made. When the housing market went bust CDOs…

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Commentary: The Slower Road in China

There’s an unusually cool breeze blowing from across the Pacific as spring gives way to an uneasy summer. China’s stringent government efforts to reign in an overheating economy marked a welcome pause in the hottest growth story of the century. The depths of the slowdown, however point to a less manageable set of problems after…

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