Every now and then there’s great article–or a compelling report–published “out there” that is worthy of sharing. I’ll use this page rather than the blogroll to keep track of them (Wordpress, excellent as it is, is somewhat problematic on the blogroll front with the posts not being sortable).
Highlights
The Monster Mash; you gotta laugh, and this sendup of the whole financial crisis to the tune of the old Monster Mash song from the 50’s is a wonderful gem.
Centre for Policy Development InSight Special Edition | The Global Financial Crisis in Review. Articles by myself, John Quiggin, Richard ‘Estrange, James Murray and Ian Dunlop.
Steve Keen, Predicting the crisis: Medal winning analysts. “If they were to hand out medals for predicting the global financial crisis, the Gold Medal for having predicted the crisis must go to Irving Fisher, who in 1933 developed the “Debt Deflation Theory of Great Depressions” - a piece which remains the best description of what happens to an economy that succumbs to excessive debt in the context of low inflation. We are now reliving the horror he warned us against…
The academic economists who predicted this crisis were ignored because the mainstream of the economics profession follows what is known as neoclassical economics, which ignores debt and models the economy as if it is always in equilibrium. The contrarians were ignored because for so long, the way to make money was to “go with the herd”. Today, conventional neoclassical economics is being starkly proven wrong by this very crisis, while contrarians are now the only ones making money.”
January 1 2009, New York Times: Worldwide, a Bad Year Only Got Worse. “Stocks lost 42 percent of their value in 2008, as calculated by the MSCI world index, erasing more than $29 trillion in value and all of the gains made since 2003. Just about the only assets to prosper were government bonds of developed countries and gold, where prices rose as investors ran for cover. ”
Portfolio.com special: The End: The era that defined Wall Street is finally, officially over. Michael Lewis, who chronicled its excess in Liar’s Poker, returns to his old haunt to figure out what went wrong; and
What a Swell Party: a photographic timeline of two decades of Wall Street excess
The Biggest Losers: Normally I say that this crisis is no time for Schadenfreude–the negative consequences for the whole species are just too great. But when it comes to the top twenty monkeys? I can’t help enjoying this tale of executive loss on The Business Sheet by Hilary Lewis.
Glovernomics: saving the nation. Good one Richard Glover! “It now seems ages since the crisis first hit - that golden time when no one in Australia had even heard of Freddie Mac and Fannie Mae. Even now, Fannie Mae sounds like an American version of Movember. I imagine myself in April, really looking forward to the commencement of festivities.”
For the benefit of any US readers who can’t understand why this is uproriously funny (to Australians): (a) “Movember” is an annual men’s health awareness event that requires participants to “Grow a Mo”–as in a moustache–for the month of November; (b) Check the final line of the Wikipedia disambiguation of the term Fanny: “Fanny is also a name used for the …”
Top Gear’s Jeremy Clarkson: Vauxhall Insignia 2.8 V6: An adequate way to drive to hell. “I was in Dublin last weekend, and had a very real sense I’d been invited to the last days of the Roman empire. As far as I could work out, everyone had a Rolls-Royce Phantom and a coat made from something that’s now extinct…
Everyone appeared to be drunk on naked hedonism. I’ve never seen so much jus being drizzled onto so many improbable things, none of which was potted herring. It was like Barcelona but with beer. And as I careered from bar to bar all I could think was: “Jesus. Can’t they see what’s coming?”
I have spoken to a couple of pretty senior bankers in the past couple of weeks and their story is rather different. They don’t refer to the looming problems as being like 1992 or even 1929. They talk about a total financial meltdown. They talk about the End of Days…”
January 15 2007: Gillian Tett, Financial Times: Should Atlas still shrug? The threat that lurks behind the growth of complex debt deals. This article, just brought to my attention by a blog reader, deserves an award for prescience: “At a glitzy dinner in a Mayfair hotel in London last week, prizes were awarded to the best capital markets performers in 2006. Strikingly, the group that grabbed the tag “best financial borrower” - meaning, most creative in raising funds - was not a bulge-bracket Wall Street or City name. Instead the honour went to Northern Rock, a lender to homebuyers, which is based in north-east England’s gritty Newcastle and has become an enthusiastic issuer of mortgage-backed bonds.”…
January 3, 2009, FRANK RICH: A President Forgotten but Not Gone. This story has nothing to do with debt, but it’s too good not to link to: Frank Rich’s New York Times OpEd (with an abridged version on the SMH) on the narcissism that defines and maintains George W. Bush:
“The man who emerges is a narcissist with no self-awareness whatsoever. It’s that arrogance that allowed him to tune out even the most calamitous of realities, freeing him to compound them without missing a step. The president who famously couldn’t name a single mistake of his presidency at a press conference in 2004 still can’t.”
January 1, 2009: Elizabeth Farrelly, SMH: Is there bravery enough to slay the gnashing beast of profit? “The co-op, a la Europe, is neither socialist nor capitalist but a genuine third way, and it can happen here. But it won’t, until we have a law that is strong where flesh is weak.”
January 1, 2009: A year of turmoil, down 43pc and $754b poorer. “THE worst year in Australian sharemarket history is finally over. The All Ordinaries closed yesterday at a price tag of just under $1 trillion, after the global financial crisis and fear of recession wiped 43 per cent, or 2699 points, from the market.”
January 1, 2009: Jacob Saulwick, SMH: Credit data reflects the gloom. “The yearly growth in credit to households and businesses dropped to 8.2 per cent in November - half that of a year ago. That suggests a grim 2009 as firms rein in investment and a weak housing sector gives little support for construction.”
December 31, Yahoo Finance: Street looks to ‘09 with relief after terrible ‘08. “The last trading day of 2008 on Wall Street provided a merciful end to an abysmal year — the worst since the Great Depression, wiping out $6.9 trillion in stock market wealth.”
December 31, 2008: Stocks post worst ever year. “”The All Ordinaries index also had its worst calendar year on record, plummeting 43%, compared to the 32% slump during the oil shock of 1974 and the 34% fall in 1930, during the Great Depression.
December 30: John Carney, Clusterstock: House Prices Plunge Again, Now Down 25 Percent. “e still occasionally hear folks predicting that the overall house-price decline might be on the order of 20% or so–or maybe 25%, tops. Might be time to adjust those forecasts. Given the current rate of decline and the fact that house prices still have yet to reach their long-term historical average relative to incomes and rents, we remain comfortable with our prediction of a 35%-40% total decline. Unless the rate of price decline moderates soon, this could even prove conservative.”
December 30: Michael Evans, SMH: Westpac freeze on $1.2b held in US hedge fund. “The affected fund describes its investment strategy as “a multi-manager, multi-strategy hedge fund product (a fund of funds) which invests in an international portfolio of hedge funds featuring multiple investment managers and strategies, via a swap contract”. Its product disclosure statement says the fund aims to provide absolute returns of 10 to 15 per cent a year over three years, noting that “these returns will exhibit a low volatility”.”
December 29, 2008, Anatole Kaletsky, The Times, Market fundamentalism took us close to disaster in 2008. “What went wrong? In the last Economic View every year, I look back at what I predicted here in early January, to try to shed some light on the events of the previous 12 months. This is nearly always a humbling experience… This year, however, the routinely humbling experience has turned into a ritual humiliation. How else can I describe the public confession that I am now compelled to make..”
December 27: By Saying Yes, WaMu Built Empire on Shaky Loans, New York Times. “As a supervisor at a Washington Mutual mortgage processing center, John D. Parsons was accustomed to seeing baby sitters claiming salaries worthy of college presidents, and schoolteachers with incomes rivaling stockbrokers’. He rarely questioned them. A real estate frenzy was under way and WaMu, as his bank was known, was all about saying yes…
On a financial landscape littered with wreckage, WaMu, a Seattle-based bank that opened branches at a clip worthy of a fast-food chain, stands out as a singularly brazen case of lax lending. By the first half of this year, the value of its bad loans had reached $11.5 billion, nearly tripling from $4.2 billion a year earlier…
“It was the Wild West,” said Steven M. Knobel, a founder of an appraisal company, Mitchell, Maxwell & Jackson, that did business with WaMu until 2007. “If you were alive, they would give you a loan. Actually, I think if you were dead, they would still give you a loan.””
December 23: Yuriy Humber and Torrey Clark: Oligarchs seek loans to survive squeeze. You know things are tough when Russian Oligarchs come cap in hand, asking for help!. “RUSSIAN oligarchs are lining up for Kremlin loans to survive the international financial crisis, handing the Prime Minister, Vladimir Putin, the opportunity to increase government control of the nation’s biggest companies. Just 12 years after they gained ownership of the former Soviet Union’s industries by bailing out the Government, the tables have now been turned.”
December 23: Miwa Suzuki: Japan slips deeper into the mire, SMH. “A survey in the Nikkei economic newspaper found that even large companies were becoming much more pessimistic. The survey found 99.3 per cent of leaders at Japan’s 137 major corporations believe the domestic economy is deteriorating. Among them, those who said the economy is rapidly worsening soared to 86.8 per cent from just 10.8 per cent in the previous survey in early October, the daily said.”
December 22: PAUL KRUGMAN: Life Without Bubbles, New York Times. I’d like to think that the optimism Krugman expresses here is because he is an optimist. But I think it’s more likely because he doesn’t understand how the crisis came about. “Whatever the new administration does, we’re in for months, perhaps even a year, of economic hell. After that, things should get better, as President Obama’s stimulus plan… begins to gain traction. Late next year the economy should begin to stabilize, and I’m fairly optimistic about 2010… The point is that it may take a lot longer than many people think before the U.S. economy is ready to live without bubbles. And until then, the economy is going to need a lot of government help. ”
December 22: Yahoo Finance, Toyota projects first loss in 70 years. “Toyota had reported strong growth in recent years, boosted by heavy demand for its fuel-efficient models … But Watanabe said a severe drop in demand, especially in the U.S., which accounts for one-third of vehicle sales, and profit erosion from a surging yen were too much for Japan’s No. 1 automaker. Overall U.S. auto sales fell to their lowest level in 26 years last month. ”The change that has hit the world economy is of a critical scale that comes once in 100 years,” Watanabe said.”
December 22: Tech Ticker at Yahoo Finance, Henry Blodget: Madoff Scheme Tightens Noose on Fund of Funds. “Bernie Madoff’s biggest sales operation, Fairfield Greenwich Group, made more than $500 million over the past five years channeling investors to Madoff, the NYT says. We continue to believe the firm’s days are numbered, and we would be surprised if it made it through January.”
December 20: The Reckoning–White House Philosophy Stoked Mortgage Bonfire, New York Times. “Eight years after arriving in Washington vowing to spread the dream of homeownership, Mr. Bush is leaving office, as he himself said recently, “faced with the prospect of a global meltdown” with roots in the housing sector he so ardently championed. There are plenty of culprits, like lenders who peddled easy credit, consumers who took on mortgages they could not afford and Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk. But the story of how we got here is partly one of Mr. Bush’s own making…”
December 19, Yahoo Tech Ticker: S&P 600: That’s Gary Shilling’s Forecast for 2009, Not an Index.
December 19: Danny John, Commbank’s woes mount as bad debts rise to $2.5b, SMH. “Having set aside about $1 billion at the end of its 2008 full year at June 30, Commbank yesterday provided further detail to the market that an additional $1.5 billion would almost certainly be needed to make up for loans that have gone sour over the past six months.”
December 19: Elizabeth Knight: A cultured spin on an old scam, SMH. “Usually Ponzi perpetrators are smaller operators with no real financial pedigree who preys on the small and unsophisticated investor… Madoff, however, was in a different league. He suckered hedge funds, large banks like HSBC and the Royal Bank of Scotland, and a stack of high-profile businessmen like the US media magnate Mort Zuckerman, the owner of the New York Mets baseball team, Fred Wilpon, the Hollywood screen writer Eric Roth, and the director Steven Spielberg.”
December 19: Annette Sampson: Annus horribilis for super funds caught in the storm, SMH. “As super funds brace to report their worst calendar year on record, the question for investors is: did it have to be this bad? The dreaded November figures are due out on Monday, but in the 12 months to October 31 the average balanced super fund had lost 17.61 per cent…”
December 18: On Wall Street, Bonuses, Not Profits, Were Real, New York Times. “In all, Merrill handed out $5 billion to $6 billion in bonuses that year. A 20-something analyst with a base salary of $130,000 collected a bonus of $250,000. And a 30-something trader with a $180,000 salary got $5 million. But Merrill’s record earnings in 2006 — $7.5 billion — turned out to be a mirage. The company has since lost three times that amount, largely because the mortgage investments that supposedly had powered some of those profits plunged in value.”
December 18: Michael West: Storm catches Symonds, SMH. “Disabled Vietnam war veteran and pensioner, Steve Reynolds, was encouraged to borrow against his home to invest in the stockmarket, and take out margin loans as well. Reynolds now has debts of $1.2 million against assets now estimated at $800,000. He is up for an interest payment of $80,000 by June and has an annual income of $16,000. He was lent the money despite his obvious inability to service the loans in the event the stockmarket fell.”
December 16, Michael West: Tuning dial slips at Macquarie Media. “Here’s a puzzler. How can a listed entity with cash backing of $1.49 per unit, an entity which throws off cash earnings of 40c per unit from its operating businesses, be valued by the market at just 65c?..”
“Curiously, if the current share price and cash balances were to be maintained, Macquarie would never again be entitled to even a base management fee from MMG … the MMG prospectus made clear that, in most circumstances, the management company (wholly owned by Macquarie) would be entitled to an annual base fee of 1.5% of the MMG market capitalisation. Presumably in order to justify this fee … the prospectus also said the management company was to employ the 10 most senior managers in the radio business. Somewhere along the way though this changed… just two employees of the Australian media business, that is the CEO and CFO, are employed by the manager and seconded to the business. The other eight managers have been transferred back into the operating businesses… this represents a transfer of expenses of around $2 million annually away from the manager. There has been a transfer of value out of MMG back into the mothership…”
December 16, Vanda Carson: Crown’s $414m US investment ‘worthless’, SMH, ” gambling industry analyst with Citi, Jenny Owen, said the small stakes in two debt-laden US casino companies were now worth nothing “due to the highly leveraged nature of the private-equity-owned casino operators and the downturn in industry revenue”.”
December 15, Yahoo Finance: Fed weighs slashing rates to cushion fallout. “Helicopter Ben” is now testing Milton Friedman’s theory about how to prevent a Great Depression. “By boosting the quantity of money in the financial system, the Fed has engaged in so-called “quantitative easing” to provide economic relief. The Fed’s balance sheet has ballooned to $2.2 trillion, from close to $900 billion in September, reflecting efforts to mend the financial system.”
December 15: Henry Blodget: List of Madoff’s Victims Keep Growing, Likely to Extend Beyond Clients, Yahoo Finance’s Tech Ticker. “Henry Blodget has compiled an exhaustive list here, but some of the biggest names include: movie mogul Steven Spielberg, New York Mets owner Fred Wilpon, New Jersey Sen. Frank Lautenberg, and real-estate magnate Mort Zuckerman.”
Blodget’s list of victims known so far is here; with a slideshow of the destitute to match.
December 15: excellent piece by Jacob Saulwick: Free money as US pushes the print button, SMH:
“Nobody knows whether it will work, or what the consequences might be. A salvage job of such magnitude has never been attempted before. At some stage the economy might improve, inflation return, and this could lead to a crash in the bond market given all the new debt issued by governments.
Or the US Government might find that it has borrowed heavily and got little in return. The assets it has bought - bank shares or stakes in car companies - are worthless, and the stimulus package has done little to improve the economy.
In this scenario, future generations will pay for the largesse of the present through a diminution in social infrastructure, the impoverishment of public education, and the guts ripped out of the health system.
The system might work but it’s a bastard.”
December 1, 2008: Paul Sheehan: Playing chicken with stupid giants, SMH. “Buckle up. Two giants are playing “chicken”, the game where two cars speed towards each other and the loser is the one who swerves first. Unless neither flinches, then they smash head-on. In this case the giants playing chicken are General Motors Corporation and the Republicans in Congress. If neither blinks, you can forget all the happy talk about Australia avoiding a recession because the shock wave from this collision will be global.”
December 15: Investors chase missing billions, SMH. “It appears that at least $US15 billion of wealth, much of which was concentrated in southern Florida and New York City, has gone to ‘money heaven,’” he said.”
December 14: The 17th Floor, Where Wealth Went to Vanish, NYT: “Santander may face $3.1 billion in losses through its Optimal Investment Services, a Geneva-based fund of hedge funds that is owned by the bank. At the end of 2007, Optimal had 6 billion euros, or $8 billion, under management, according to the bank’s annual report — which would mean that its Madoff investments were a substantial part of Optimal’s portfolio”
December 13: Stuart Washington, SMH: In the eye of the storm. “At a public briefing on the crisis presented by two of Columbia University’s Nobel Prize-winning economists, Robert Mundell and Joseph Stiglitz - alongside a former Federal Reserve chairman, Paul Volcker - the striking thing was the lack of striking things. It was easy to leave the room thinking: even these guys don’t really know where this one is headed.”
December 13: Alan Ramsey, SMH: Here we go again: we’re in this together. “Seventeen years ago, during Paul Keating’s recession we had to have, I wrote a piece in this space about Bob Hawke and “togetherness”. It began: “You know things are crook as soon as Bob Hawke starts talking about doing things together. Together is one of those words the Prime Minister uses when the country’s in trouble, his Government’s in trouble, or he’s in trouble. Sometimes it can mean all three. Yesterday was a together day.”"
December 12: Yahoo Finance Tech Ticker: “I Knew Bernie Madoff Was Cheating; That’s Why I Invested with Him“. “So why did these smart and skeptical investors keep investing? They, like many Madoff investors, assumed Madoff was somehow illegally trading on information from his market-making business for their benefit. They didn’t consider the possibility that he was clean on that score but running a good old-fashioned Ponzi scheme.”
December 12: More on Madoff and the world’s biggest explicit Ponzi Scheme (in reality both the stock market and housing market bubbles were also Ponzi Schemes) The World’s Biggest Ever Heist. “Right now, there are a handful people whose world has suddenly been turned upside-down: who have, overnight, suddenly lost billions of dollars of dynastic wealth to a Wall Street con man. I’m sure that their names will appear sooner or later. But there really is no precedent that I can think of: when has one man ever managed to steal $50 billion dollars? If the $100 million Harry Winston heist in Paris was the “steal of the century”, what’s this?.”
December 11: Bernie Comes Out of the Closet. An excellent market insider’s take on Madoff. “Not a year has gone by during the past fifteen that I have not contemplated what Bernie Madoff did (or didn’t do) to make his money. Seventy to one-hundred basis-points-a-month. Net. Net. Net. During tempests, earthquakes, panics and crashes - even during the closure of the exchange itself, Bernie apparently minted coin like few others. Even Renaissance and Shaw tripped occasionally. Not Bernie. Yet no one new what he did. It was one of the best kept secrets in the world. Oh yeah, sure, split-strike conversions were the official line. But every skeptical arb trader knew this couldn’t be true.”
December 11: Henry Blodget on Clusterstock: Bernie Madoff: The Indictment. “The criminal indictment of Bernie Madoff is embedded below. The good stuff starts at the bottom of page 2, when the FBI agent begins talking about his interview with two of Bernie’s senior employees. According to the WSJ, these two employees are Bernie’s sons. Also don’t miss the last paragraph, where the agent interviews Bernie himself.”
December 11th: Prominent Trader Accused of Defrauding Clients, NY Times. “On Wall Street, his name is legendary. With money he had made as a lifeguard on the beaches of Long Island, he built a trading powerhouse that had prospered for more than four decades. At age 70, he had become an influential spokesman for the traders who are the hidden gears of the marketplace. But on Thursday morning, this consummate trader, Bernard L. Madoff, was arrested at his Manhattan home by federal agents who accused him of running a multibillion-dollar fraud scheme — perhaps the largest in Wall Street’s history…”
“Mr. Madoff invited the two executives to his Manhattan apartment that evening. When they joined him there, he told them that his money-management business was “all just one big lie” and “basically, a giant Ponzi scheme.”
“The senior employees understood him to be saying that he had for years been paying returns to certain investors out of the cash received from other investors.”
December 11th: Auto Bailout Talks Collapse in the Senate, NY Times. “A $14 billion emergency bailout for U.S. automakers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.”
December 12th: Michael West: Storm turns into typhoon, SMH. ”This one is worse than Westpoint or Australian Capital Reserve. Forget Allco, even MFS, ABC or City Pacific. The demise of Storm Financial Group is the greatest tragedy embroiling retail investors this year. The others are mortgage funds, one-product wonders, or single stock market companies in which investors are unlikely to lump their entire savings. Not so, Storm. We are talking 13,500 clients and $4.7 billion in funds under management.”
December 12th: Natalie Craig: Time bomb for home buyers, SMH. “ABOUT 300,000 Australian households could face “negative equity” next year — owing more money to lenders than their house is worth — if prices fall by 10 per cent as predicted. Modelling by RMIT’s Housing and Urban Research Institute suggests that about 4 per cent of Australia’s 8.5 million households could next year see the value of their property fall below what they owe on it.”
December 11: Michael West, SMH: Bank risks remain. “One obscure change in legislation, barely reported at the time, has proved momentous. And that was the decision by the Securities & Exchanges Commission (SEC) to revoke long-standing rules in 2004 which required broker/dealers to keep their debt-to-net-capital ratio to 15-1. In other words, for every $15 of debt, the banks were required to have $1 of equity. Thanks to quiet lobbying from Wall Street however, this ceiling was dropped and the likes of Bear Stearns soon ran up a gross debt ratio of 33-1. Then kaboom.”
December 11: Miranda Devine, SMH: Cash-machine Kev to the rescue. “As job ads slump, pink slips grow and houses sell for a fraction of their asking price, economics gurus everywhere are praising Rudd’s handouts as the only way to stave off a recession. But if they are really so smart, why didn’t they predict the GFC? In fact, why didn’t they stop it?”
December 11: Elizabeth Farrelly, SMH: Save the shonks: a car rescue deal you can trust. “It’s funny, isn’t it, how the global crunch is turning the tables? Funnier still how the turning seems to be 360, leaving the screw-ups still on the starched white linen with the crystal and silver, and the meek are still underneath, inheriting shite.”
December 10: Professor James Galbraith interviewed on Yahoo Finance’s Tech Ticker. How the ‘Experts’ Missed the Crash: Philosophical Flaws, No Sense of History. My post on this gives more detail.
December 10: Jessica Irvine, SMH: Bad signs as the CBD empties. “There’s a joke doing the rounds of finance workers in the CBD, given added poignancy by this week’s decision by upmarket shirt maker Herringbone to go into voluntary administration. What’s the definition of optimism in the finance sector? Answer: ironing five shirts on a Sunday night.”
December 9: The New York Times, Investors Buy U.S. Debt at Zero Yield. “In the market equivalent of shoveling cash under the mattress, hordes of buyers were so eager on Tuesday to park money in the world’s safest investment, United States government debt, that they agreed to accept a zero percent rate of return.”
December 6: John Cassidy on Portfolio.com, Economic Predictions for 2009. “Economists regard the Great Depression as something akin to the Black Death: a fascinating and terrifying historical aberration that, thankfully, can never happen again… Among noneconomists, there is much more concern about what lies ahead.. So who are we to believe: the experts who failed to predict the current crisis or the great American public? With due respect to my fellow dabblers in the dismal science, I share Joe the Plumber’s queasy feeling. Unless something miraculous happens in the next few weeks, the new inhabitant of the Oval Office will inherit an economy flailing under the weight of record debts and rising unemployment. If a depression is defined as a deep, extended recession of a severity that nobody under the age of 75 can recall, then it is quite likely that we are already in one.”
December 6: Some good detective work by Ross Gittins that points out that Australia’s slowdown began well before the financial crisis hit bigtime in September. The bad outlook is partly our own fault. “Take careful note of the figures we got this week on the state of the economy in the three months to September. Why? Because they show the economy had slowed to stalling speed before the full force of the global financial crisis had hit us.”
December 6: Ian Verrender in the SMH, Around we go again: the accounting fictions of corpses. “Given the meltdown on global financial markets, a worsening recession in almost every part of the world and the collapse of many of the world’s biggest financial institutions, it seems an odd time to be arguing for a diminution in accounting standards.”
December 6: Massive job losses deepen US crisis, SMH. “Employers cut 533,000 jobs, bringing losses so far this year to 1.91 million, the Labor Department said today in Washington. November’s drop exceeded all 73 forecasts in a Bloomberg News survey. The unemployment rate rose to 6.7 per cent, the highest level since 1993.”
December 5: GM faces rapid collapse without aid, SMH
December 5th: European central banks axe rates, SMH. “Policy makers are moving toward historically low levels of interest rates and they probably won’t stop there,” said Paul Dales, an economist at Capital Economics in London. “We are going to see all central banks bring rates down as close to zero as they can get.”
December 4th: UK offers $2.3b mortgage loan guarantee, SMH
December 3rd: It’s official: US now in recession for a year, SMH
December 2nd: Ben Stein’s “How Not to Ruin Your Life” column on Yahoo Finance on the appointment of Timothy F. Geithner, head of the Federal Reserve Bank of New York for the last five years, as his Treasury Secretary Change? To Washington? Ha!
December 2nd: Ed Shann in the Australian Financial Review, Forced sellers will keep prices falling
December 1st: Surprise surprise, inflation has gone and Big rate cut looms as inflation cools, and Large rate cut likely as pressures dive. This is the real worry that I had years ago when I began arguing against the RBA’s obsession with keeping the rate of inflation low, in the context of the debt bubble. When it burst, inflation would quickly give way to deflation and we would have the true “double whammy” conditions that give rise to a Depression. Now the data is very quickly showing that this is probably happening.
November 28th: Crisis has cost five trillion dollars
November 26th: Government Bailout Hits $8 Trillion
November 24th: Bernanke’s “I blew it” admission
November 12th: Andrew Linden & David Hirst on the confidence trick of abandoning mark to market valuations, The Age
November 12th: Michael West on Australia topping Merrill Lynch’s list of most at risk countries, SMH
November 11th: Rubicon Crossing–Michael West’s Profile of the now collapsed Rubicon, SMH
November 10th 2008: NY Times profile of the collapse of Merrill Lynch via mortgage bonds
November 5th 2008: Queen baffled at delay in spotting credit crunch, SMH
October 24 2008: Michael M. Thomas Alan Greenspan, ”Savant Idiot”, Forbes
