Financial Crisis

[Petbon]

Marx was very insightful and ever so seminal for me.

From him, I began to observe that religion is often the opiate of some people, that social being determines consciousness and that many ideas arise out of the economic conditions at given times (namely those of the ruling class e.g. media barons) and early in the piece. But the notion of capitalism containing the seeds of its own downfall is one of the most pertinent - not only moral hazards, but environmental hazards.

[flying]

Flying, Alex, Midas... vhat iss going on in ziss zread? vhy are zere no more epyleptic... i mean ypoclactic... ahmm... no... glumb&dumb yewtoob klips posted vhich vere not only entertaining butt also of great edukashional value? vhat about an interesting shtory sutch as "Hillary's sekret affair vizz Kim Jong-il financed by the FED" and/or "Burth zertifikate proves zat Obama was born aylien on a far avay planet in ze gamma kvadrant?

Silly Klingon

Your post reminds me of a story.......

Man walks into a house of ill repute

Manger greets him & asks what can we do for you?

He tells the manager..." I want to get Sc***ed"

Manger said "no problem Go upstairs 1st door on right"

He goes up stairs & knocks on the 1st door on right.

Ladies voice inside says "Yes"

He say's " I want to get Sc***ed"

She says " slip 1000 baht under the door"

He slips a crisp 1000 baht note under the door & waits 2 minutes....

Nothing happens so he knocks again

Ladies voice again says.."Yes"

He says..." I said I want to get Sc***ed"

She say's " AGAIN?"

Moral of story dear Klingon friend is....

Just because you do not feel it does not mean it is not happening.

But if you really want something by Hillary watch this it is quite funny...

She has a hissy fit when the translated mistakenly translates Mr President into Mr. Clinton

Edited August 13, 2009 by flying

[midas]

Oh dam_n ! Sorry put the popcorn back..............its on again

Mervyn King said the world economy "remains in a deep recession and its financial system in a fragile condition". The UK economy showed signs of stabilising now, he added, but the upturn could be so muted that many people will not notice the difference.

http://www.independent.co.uk/news/business...nk-1771272.html

[Naam]

Flying, Alex, Midas... vhat iss going on in ziss zread? vhy are zere no more epyleptic... i mean ypoclactic... ahmm... no... glumb&dumb yewtoob klips posted vhich vere not only entertaining butt also of great edukashional value? vhat about an interesting shtory sutch as "Hillary's sekret affair vizz Kim Jong-il financed by the FED" and/or "Burth zertifikate proves zat Obama was born aylien on a far avay planet in ze gamma kvadrant?

Silly Klingon

Moral of story dear Klingon friend is.... Just because you do not feel it does not mean it is not happening.

yew mean zat it iss happening butt i am not avare of it? butt vhat ekzatly iss happening? sum more banken vent bankerott? zee IRS vas raizing yewr takses? yewr vife vants more household munny? yewr tchildren treat yew badly bekause yew don't inkrease zeir pocket munny? tell, tell!

[AlexLah]

Ha ha ha!

That Clinton clip is hilarious, what a B1tch that women.

Sorry Naam for the lack of doom and gloom, I am sure within the near future we will have some of it again..........

[Naam]

Marx was very insightful and ever so seminal for me.

From him, I began to observe that religion is often the opiate of some people, that social being determines consciousness and that many ideas arise out of the economic conditions at given times (namely those of the ruling class e.g. media barons) and early in the piece. But the notion of capitalism containing the seeds of its own downfall is one of the most pertinent - not only moral hazards, but environmental hazards.

HALLELUJAH PRAISE THE LORD AMEN!

[midas]

While this is an older article ( April 2009 ), it is still thought provoking particularly during a week when

personal bankruptcy in US has been discussed. Could USA do any of the following to resolve its problems ?

A US way out?

“Not forgetting that there is also a long standing tradition in the US business culture of going bankrupt, this option must look more and more tempting to the President Obama's administration.”

The US, as the country, is economically and militarily powerful enough to declare that it no longer honours its debt and its currency. Effectively the dollar could be written off as a currency. As around two thirds of world reserves are held in dollar they will be written off. The US will have no debt. Along this action, the US will introduce a “new dollar”. Any internal US old dollar liability will be converted into it, possibly with even 1:1 ratio.

http://gregpytel.blogspot.com/2009/04/us-way-out.html

[flying]

butt vhat ekzatly iss happening?

Franklin Sanders always has a funny way of telling......

Wednesday, 12 August a.d. 2009

And the answer to yesterday's Latin proverb quiz is,

"I fear the Greeks even when they come bearing gifts."

The Mystic Monks of the Mysterious Monetary Shrine, a.k.a. the Federal Open Market Committee, announced their action today after meeting & eating for two days. Like the pronouncements from Delphi, it is a riddle wrapped in an enigma, or, perhaps more accurately, rotten codfish wrapped in newspaper. What saith the Oracle? Here are the Holy Words, along with my somewhat less than holy translation:

"The Committee expects that inflation will remain subdued for some time."

Translation: we are inflating the money supply so fast that all those riding on it are liable to have their eyebrows blown off, but if we don't lie to you & tell you the opposite, there's a chance you might panic out of the dollar.

"The Federal Reserve will employ all available tools to promote economic recovery & to preserve price stability."

Translation: We are scratching the ground like a cat on concrete, but just can't get any traction. Therefore we will

continue doing the same stupid things that didn't work in the 1930s and haven't worked to date, namely, inflate.

"The committee will maintain the target range for the federal funds rate at 0 to 1/4 percent."

Translation: We are going to inflate some more, & by keeping interest rates low hope to lure more suckers into debt. We don't have a clue when we will try to raise rates, & in fact are terrified of even trying to raise them. The whole economy might lock up if we did.

"The Federal Reserve will purchase a total of up to $1.25 Trillion [with a T] of agency mortgage-backed securities & up to $200 billion of agency debt by the end of the year. In addition the Federal Reserve is in the process of buying $300 billion of Treasury securities."

Translation: We are going to inflate some more, and here's proof of it, pouring $1.75 trillion into the money supply by year end. We have only one strategy, and only one weapon: inflation.

Edited August 13, 2009 by flying

[midas]

US Consumer Credit Shows Steepest Contraction in Over 5 Decades

Welcome to the new paradigm of savings, asset liquidation and debt repayment — the era of consumer frugality. After 20 years of living beyond their means, American consumers will be spending the next several years living below their means, and no, this will not be the end of the world, but it will put a firm ceiling on overall demand growth for some time to come.

http://globaleconomicanalysis.blogspot.com...s-steepest.html

[Naam]

Effectively the dollar could be written off as a currency. As around two thirds of world reserves are held in dollar they will be written off. The US will have no debt. Along this action, the US will introduce a “new dollar”. Any internal US old dollar liability will be converted into it, possibly with even 1:1 ratio.

http://gregpytel.blogspot.com/2009/04/us-way-out.html

effectively i could write off Mrs Naam as a wife. along this action i will introduce several new Mia Nois, possibly with a ratio 3:1 (generic Viagra is still affordable). unfortunately this action has to be synchronised with the hiring of a platoon of Gurkhas to serve as bodyguards for me and the "Nois", i.e. the question arises "is it worth the trouble?"

[Abrak]

effectively i could write off Mrs Naam as a wife. along this action i will introduce several new Mia Nois, possibly with a ratio 3:1 (generic Viagra is still affordable). unfortunately this action has to be synchronised with the hiring of a platoon of Gurkhas to serve as bodyguards for me and the "Nois", i.e. the question arises "is it worth the trouble?"

Dear Naam,

To be honest I dont consider that you have thought this problem through very carefully.

(Obviously employing a platoon of ghurkhas would be expensive irritating and if you dont mind me saying, may well cramp your style.)

The far simpler solution is the one generally adopted in the West. Mrs Naam will generally accept being written off as a wife so long as the she is given proceeds equal to that of hiring a platoon of Gurkhas. I have never looked into the actual cost so I am guessing to an extent. You can then have your mia nois, the ex Mrs Naam will call you a shallow bastard but have been suitably recompensed and the only people who have really suffered are the Gurkhas who have missed out on gainful employment.

[Chaimai]

effectively i could write off Mrs Naam as a wife. along this action i will introduce several new Mia Nois, possibly with a ratio 3:1 (generic Viagra is still affordable). unfortunately this action has to be synchronised with the hiring of a platoon of Gurkhas to serve as bodyguards for me and the "Nois", i.e. the question arises "is it worth the trouble?"

Dear Naam,

To be honest I dont consider that you have thought this problem through very carefully.

(Obviously employing a platoon of ghurkhas would be expensive irritating and if you dont mind me saying, may well cramp your style.)

The far simpler solution is the one generally adopted in the West. Mrs Naam will generally accept being written off as a wife so long as the she is given proceeds equal to that of hiring a platoon of Gurkhas. I have never looked into the actual cost so I am guessing to an extent. You can then have your mia nois, the ex Mrs Naam will call you a shallow bastard but have been suitably recompensed and the only people who have really suffered are the Gurkhas who have missed out on gainful employment.

See, this is exactly what is wrong with greedy, financially driven Western developed countries (I view Naam's plot in Thailand as having declared UDI and being part of an alien nation).

You have no concern, or compassion, for the efforts of one Ms Joanna Lumley who campaigned successfully for improved rights of Gurkhas to settle in the UK.

Shame on you Abrak and Naam. Write out "humanitarianism" 10,000 times as punishment.

Edited August 13, 2009 by Chaimai

[Naam]

effectively i could write off Mrs Naam as a wife. along this action i will introduce several new Mia Nois, possibly with a ratio 3:1 (generic Viagra is still affordable). unfortunately this action has to be synchronised with the hiring of a platoon of Gurkhas to serve as bodyguards for me and the "Nois", i.e. the question arises "is it worth the trouble?"

Dear Naam,

To be honest I dont consider that you have thought this problem through very carefully.

(Obviously employing a platoon of ghurkhas would be expensive irritating and if you dont mind me saying, may well cramp your style.)

The far simpler solution is the one generally adopted in the West. Mrs Naam will generally accept being written off as a wife so long as the she is given proceeds equal to that of hiring a platoon of Gurkhas. I have never looked into the actual cost so I am guessing to an extent. You can then have your mia nois, the ex Mrs Naam will call you a shallow bastard but have been suitably recompensed and the only people who have really suffered are the Gurkhas who have missed out on gainful employment.

Mon cher Abrak, once in a while i take good advice from friends (when their advice is indeed good). please consider yourself, effective immediately, as one of my friends

[AlexLah]

Maybe the two of you like trains?

[sokal]

Ha ha ha!

That Clinton clip is hilarious, what a B1tch that women.

Sorry Naam for the lack of doom and gloom, I am sure within the near future we will have some of it again..........

Is Naam bullish ?

This guy put out an alert last year at about the same time.RBS issues alert

[Naam]

Ha ha ha!

That Clinton clip is hilarious, what a B1tch that women.

Sorry Naam for the lack of doom and gloom, I am sure within the near future we will have some of it again..........

Is Naam bullish ?

no Sokal, i'm not bullish and i was not bullish although i have started (in a very prudent way and selectively) buying those assets i am familiar with and which were hammered down to 10-20% of their former value since end of last year till day before yesterday. if i had been bullish i would have applied much more than the self-imposed limit of 25% depot value, not cashed in any profits and more than doubled my portfolio.

my personal opinion is that, for the time being, "my" specific class of assets had its run (i never experienced that kind of run in that short time in three decades of investing) and i expect not only a sideways movement but a correction of 10-15% if the correction happens within the next two months. any later correction, e.g. early 2010 might take us down 25 or even 30%. let me emphasise that i am not talking about markets per se but bonds issued by a variety of debtors.

[Naam]

Maybe the two of you like trains?

Alex, besides me reading Abrak's interesting postings both of us had some public and also a private exchange of views. as far as investing is concerned our views are diametrical, if not light years, apart. but then there are many different ways which lead to success.

[trogers]

US Consumer Credit Shows Steepest Contraction in Over 5 Decades

Welcome to the new paradigm of savings, asset liquidation and debt repayment — the era of consumer frugality. After 20 years of living beyond their means, American consumers will be spending the next several years living below their means, and no, this will not be the end of the world, but it will put a firm ceiling on overall demand growth for some time to come.

http://globaleconomicanalysis.blogspot.com...s-steepest.html

Ah...a light in the tunnel for factories exporting boxers to the US. A couple of billion boxers will be needed in the next few years as Americans have to sit on their butts instead of going shopping.

[flying]

I cannot help but like what RP says..

The title on the clip is a misnomer though.

Also the clip of Bush at the end is funny

4 minutes if you have a decent connection

http://eclipptv.com/viewVideo.php?video_id=6808

[AlexLah]

Maybe the two of you like trains?

Alex, besides me reading Abrak's interesting postings both of us had some public and also a private exchange of views. as far as investing is concerned our views are diametrical, if not light years, apart. but then there are many different ways which lead to success.

So you don't like trains?

[midas]

Maybe the two of you like trains?

Alex, besides me reading Abrak's interesting postings both of us had some public and also a private exchange of views. as far as investing is concerned our views are diametrical, if not light years, apart. but then there are many different ways which lead to success.

So you don't like trains?

no Alex they are more into this

http://www.jklm.net/atn/pogs.html

[AlexLah]

Midas if true that would be so gayish, ha ha ha, just kidding.

Anyway as said before always look behind the curtain, things are not what they sometimes seem to be.

http://lonestartimes.com/2009/08/13/obama-...ckson-lee-forum

I have watched a few clips of those town hall meetings, it seems finally some US peeps are getting a bit fed up with things.

How many banks will fail today?

My bet 3

[Abrak]

Maybe the two of you like trains?

Alex, besides me reading Abrak's interesting postings both of us had some public and also a private exchange of views. as far as investing is concerned our views are diametrical, if not light years, apart. but then there are many different ways which lead to success.

So you don't like trains?

I am not very fond of public transport in general.

Personally Naam I am not convinced that our views are 'light years' apart. I suspect we both feel that you generate seriously good returns on assets that you fully understand. On that basis we would never hold the same one. However I do invest sometimes in various rubbish that I dont know anything about - gold, US dollar, GBP - so it is possible we might bump into the same holding by accident.

[midas]

I have watched a few clips of those town hall meetings, it seems finally some US peeps are getting a bit fed up with things.

How many banks will fail today?

My bet 3

Oh yes things are heating up. And Royal Bank of Scotland today is calling an end to the rally soon

and "expect global stock markets to test their March lows, and probably worse " - which

will put the " US peeps " in an even more foul mood

http://www.telegraph.co.uk/finance/markets...ck-markets.html

These guys at the Whitehouse make the Gambino's look positively angelic

Look at this heated exchange between Major Garrett and Robert Gibbs over emails received about health care.

http://www.realclearpolitics.com/video/200..._signed_up.html

[AlexLah]

What to think of the 700 Million Dollar a year compensation for this Blackstone guy?

(Story on BB)

Abrak maybe you could look at investment opportunities in the railway/transport sector and another one could be Bio fuel and Human Genomes.

A while ago Exxon invested in some company that uses algea to produce fuel from waste and stuff and another one is using some kind of bacteria or something, they seem to have good results with their test set-ups. Infrastructure building as I mentioned as part of the stimulus money will go there.

Human genomes. Check this one that I mentioned before: http://finance.aol.com/quotes/human-genome...porat/hgsi/nas# over the last year.

52-Wk Low 0.45 3/11/09

52-Wk High 16.87 8/13/09

Now that is a nice return right?

[12DrinkMore]

But on the contrary, we have been saved.

http://www.bloomberg.com/apps/news?pid=206...id=aF9XXH40s4ys

President Barack Obama last week said: “We are pointed in the right direction,” in remarks at the White House. “We’ve rescued our economy from catastrophe.” The administration anticipates a gathering impact from its $787 billion fiscal stimulus into next year.

The worst recession since the 1930s has created a reservoir of demand that will buoy the economy, say a growing number of economists led by James Glassman at JPMorgan Chase & Co., former Federal Reserve Governor Laurence Meyer and Stephen Stanley at RBS Securities Inc.

“Whenever we have plunged off a cliff and fallen into a deep hole in the past, for a while the economy has a tendency to bounce back very quickly,” said Glassman, a senior economist at JPMorgan in New York. Glassman and his colleagues this month said forecasts of 3 percent to 4 percent growth in coming quarters may be too low given “pent-up” consumer demand.

So, in the midst of unemployment rising to 10% the highest for decades, and with

Toxic Loans Topping 5% May Push 150 Banks to Point of No Return

http://www.bloomberg.com/apps/news?pid=206...id=aTTT9jivRIWE

there is a massive amount of "pent up" demand from consumers who will rush out and spend take out more debt and buy lots and lots of stuff from the Chinese to give growth of 3 to 4 percent in the coming quarters.

Or maybe the house prices will surge again from this level and peeps will be "spending the equity" once again?

So has the world's economy been saved by Brown/Darling/Obamah/Bernanke? As far as I can see, there has been so long term solution deployed. Just a huge amount of money created and shuffled around in an attempt to prop up the stock market and keep the banks solvent.

There now seem to be two main groups, those who believe that by the end of this year the stock market will be reaching new highs and the housing market once again resuming its flight to the moon, and those with the totally opposite view. But at least there is now an agreement.

By the end of this year unemployment will still be rising/high and something major will have happened in the markets

But surely a recovery depends on the willingness of the consumers to keep putting themselves into debt and buying more stuff?

So maybe the question to answer is, has the appetite to take on debt been reduced, or have the sheople learned a lesson and will start to increase savings?

Edited August 14, 2009 by 12DrinkMore

[Jake1]

The crisis is behind us

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

http://www.bloomberg.com/apps/news?pid=206...id=aTTT9jivRIWE

[midas]

The worst recession since the 1930s has created a reservoir of demand that will buoy the economy, say a growing number of economists led by James Glassman at JPMorgan Chase & Co., former Federal Reserve Governor Laurence Meyer and Stephen Stanley at RBS Securities Inc.

“Whenever we have plunged off a cliff and fallen into a deep hole in the past, for a while the economy has a tendency to bounce back very quickly,” said Glassman, a senior economist at JPMorgan in New York. Glassman and his colleagues this month said forecasts of 3 percent to 4 percent growth in coming quarters may be too low given “pent-up” consumer demand.

Which economic theory is this based on ? How strange ?

[12DrinkMore]

Well, here's a pessimistic one from Ambrose.

http://www.telegraph.co.uk/finance/markets...ck-markets.html

Three-month slide could hit record lows, Royal Bank of Scotland chief credit strategist Bob Janjuah predicts.

And don't miss out the comments at the bottom.

And as to the question

Are the government programs supporting the financial sector reinflating global stock markets even as economies stumble?

http://money.cnn.com/2009/08/11/news/econo...oney_topstories

Well, it seems pretty obvious that all the money is re-inflating the stock markets. Stand by for the next drop in this roller-coaster ride.

[Abrak]

The worst recession since the 1930s has created a reservoir of demand that will buoy the economy, say a growing number of economists led by James Glassman at JPMorgan Chase & Co., former Federal Reserve Governor Laurence Meyer and Stephen Stanley at RBS Securities Inc.

“Whenever we have plunged off a cliff and fallen into a deep hole in the past, for a while the economy has a tendency to bounce back very quickly,” said Glassman, a senior economist at JPMorgan in New York. Glassman and his colleagues this month said forecasts of 3 percent to 4 percent growth in coming quarters may be too low given “pent-up” consumer demand.

Which economic theory is this based on ? How strange ?

This isnt as silly as it sounds. A lot of recoveries are called V because the growth after the year of recession is fairly spectacular.

Take car sales for instance - they used to be running at 15.5m and then fell to 9m. Now there are 250m car drivers in the states, so maybe thats too many, maybe the right number is 210m. Then you give a normalized life of 15 years a car and you can see that car sales should be around thirteen million. Well below what they were before but there was 0 financing etc. Now a lot of people havent bought a car in the past couple of years either because a) they are worried about losing their job they dont want to show off in front of their newly employed neighbour or c) 0 percent financing was not on offer.

So when there are signs of recovery you dont just get a return of the normal buyers you also see those guys who have been waiting 2 years to buy a new car (even though in many cases they could afford to do it anyways.) So in the old consumer world sales were 15.5m and in the new one they are say 12.5m but pent up demand may well see them hit 15m again for a short term.

To be honest if this downturn was cyclical you would expect a recovery of 6% growth next year (still well below the output gap). You could find plenty of recessions to support that bounce (just a guess). It isnt of course a normal recession but I will guess that the strength of some of the numbers will surprise you. Simply put car sales going from 16m to 9m is unsustainable even (cars would have to last 27 years). Obviously the 16m figure was too high with NINJA loans. Say you adjust it to 12.5m, after a recession if it hits 15m it isnt a big surprise because the underlying rate has been running at 25% below natural demand and guys who were planning to upgrade three years ago are now doing it.

At the end of the day though a bounce is just a bounce. Its going to look good - actually really good because the recession has been so long. But real underlying demand is still 20% below where it was a few years ago and you cant get away from that. You can get excited as you like about the recovery but where are the real 'underlying' numbers. Car sales can jump 50% and you still need to liquidate 50% of US manufacturing production.

You get to a stage where 'green shoots' are inevitable but lets not turn them into oak trees.