You all know the movie plot: the Evil Scientist has laced the town’s water supply with a poison. All will die unless The Antidote is added, and he holds the city to Ransom. All seems lost until the Hero rides to the Rescue with The Antidote. The Hero puts the Evil Scientist behind bars, and all is well (until The Sequel anyway).
In my column in Crikey yesterday (see below) I promised to provide some “back of the envelope” calculations on why the Paulson plan can’t work.
It’s not my usual standard or style of analysis–just a simple text-only flowchart mapping out of the possible consequences of a US$2 trillion bailout, financed by either bond issues or printing money–but a promise is a promise, so here it is. Since the images are quite difficult to read, I’ve attached the Powerpoint file as well.
I’ve had a couple of very enjoyable chats this week with Red Symons, on the ABC Breakfast Show in Melbourne, and some friends have been trying to get me to throw some old Skyhooks song lines into the conversation–such as “Horror Movie” and the like (for any non-Australian and/or non-“Living in the Seventies” readers, Red was a guitarist–and played drums on the one occasion I saw them live, at Sydney University’s Union Building in the early ‘70s–and lyricist; here is a link for the lyrics).
I published this commentary on Crikey and in the Newcastle Herald yesterday; I will probably expand on this for my October Debtwatch Report, but here’s a “heads up” before next month–after all, with the speed with which events are unfolding, something else might supplant this topic by then.
I don’t have time to write a full blog on this myself, but here are some of the best commentaries to explain what’s going on that I’ve seen recently.
On Lehman, counterparty risk, and the dangers of a derivatives meltdown (which an AIG collapse might well precipitate:
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The Our Finance Blogs site (http://ourfinanceblogs.com/forum/) is hosting an online debate on “Property 2009: Crash, Boom or Stagnate?!”. I will be one of the protagonists in the debate. If you’d like to take part, go to:
and sign in. Check:
for further details.
The podcasts should now be functional. The problem was simple but obscure: my server runs Linux, which is case sensitive, and the file names were all in lowercase, but specified with initial capitals in the XML and HTML files.
I’ve successfully downloaded and played them from the HTML. I would appreciate someone trying the subcribe/iTunes update and seeing whether they are now correct there too.
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George negus is interviewing me and Peter Schiff on Dateline tonight. The topic is the attempted rescue of Fannie Mae and Freddie Mac, and what that may mean for the global economy and Australia in particular.
Dateline goes to air tonight (Wednesday) at 8.30pm. It is also accessible on the web, the day after the program goes to air.
Well Stu Cameron has been on the ball, but clearly I’ve stuffed up linking the files on my site! Several readers have told me that the podcasts 3–6 can’t be accessed.
At some stage they will be available, but I have a rush of work on right now so please wait until I put up a new post with properly tested links. My apologies for the confusion in the meantime.
Late last year on SBS News, when Stan Grant asked me which way the RBA would move rates in 2008, I replied “Up, and then down”, Stan quipped “Spoken like a true economist–an even handed answer!”–to which I replied “More down than up”.