Taibblog Wed 2009-09-02 09:06 EDT
``the Fed's decision to brag publicly about a few loans that are actually performing is sort of scary -- it speaks to a level of intellectual desperation and magical-thinking unusual even for a banker in the subprime/MBS era''
The IRA Analyst Tue 2009-09-01 19:21 EDT
...the Fed and Treasury spent all the available liquidity propping up Wall Street's toxic asset waste pile and the banks that created it, so now Main Street employers and private investors, and the relatively smaller banks that support them both, must go begging for capital and liquidity in a market where government is the only player left
IRA Analyst; Q2 2009 Bank Stress Test Results; Zombie Dance Party Rocks.
Mish's Global Economic Trend Analysis Tue 2009-09-01 15:42 EDT
It's no secret that boomers fearing an underfunded retirement have sharply cut spending. However, it's not just boomers cutting back. Consumer attitudes toward debt have changed across all age groups.
generation group; Mish's Global Economic Trend Analysis; spending collapse.
zero hedge Tue 2009-09-01 15:39 EDT
In a phenomenal demonstration of frankness and true economic assessment, the head of the China Investment Council, Lou Jiwei, who controls China's $298 billion sovereign wealth fund, admits the ponzi nature of today's markets: Both China and America are addressing bubbles by creating more bubbles and we're just taking advantage of that. So we can't lose. $20 trillion+ global equity market Ponzi scheme.
bubble; China Sovereign Wealth Fund Openly Admits Asset Bubble Addressed; creation; Head; Zero Hedge.
Jesse's Café Américain Tue 2009-09-01 14:56 EDT
After one too many face-rippings by the merry Pranksters of Wall Street, China's state-owned companies have run to their government to complain about the fraudulent nature of their derivatives contracts. Chinese state firms reneging on fraudulent derivative contracts.
Chinese State-Owned Companies Object; Face-Rippings; Jesse's Café Américain; Wall Street Indignant.
naked capitalism Tue 2009-09-01 13:10 EDT
T. S. Eliot was right. Human beings cannot stand very much reality. As much as I have an appetite for bearish views (I figure the optimist case gets disproportionate air time), the headline of Ambrose Evans-Pritchard's latest piece, ``Our quarter-century penance is just starting,'' is grim even by the standards of the bearish faithful. Great comment by DownSouth, quoting Martin Luther King and Reinhold Niebuhr to the effect that by delegating to elites what should be the role of labor unions and grass-roots organizations. Niebuhr wrote: ``when collective power, whether in the form of imperialism or class domination, exploits weakness, it can never be dislodged unless power is raised against it'' ``Before we can fix the economy, the polity must be repaired first.''
Steve Keen's Debtwatch Sun 2009-08-30 20:48 EDT
``The Marxian view is that capitalistic economies are inherently unstable and that excessive accumulation of capital will lead to increasingly severe economic crises. Growth theory, which has proved to be empirically successful, says this is not true.'' wrote Economics Nobel Prize winner Edward C. Prescott. Prescott also claimed ``the Great Depression was a conscious choice by American workers to enjoy more leisure, in response to unspecified changes in the labour market'' Apparently debt played no role. The capitalistic economy is stable, and absent some change in technology or the rules of the economic game, the [...]
38; Debtwatch; GFC; Mountain; Potholes; Steve Keen's Debtwatch.
The Guardian World News Sun 2009-08-30 14:43 EDT
Iceland's parliament today approved a plan to repay Britain and the Netherlands £3.4bn they used to compensate depositors after the collapse of an Icelandic bank. Johanna Sigurdardottir, the prime minister, said the "Icesave" bill was an important step in her country's economic recovery, paving the way for it to receive financial help from the International Monetary Fund and other countries and keeping open the option to join the EU. "It's obviously best for all three nations to reach an amicable agreement on this for it is in no one's interest to see Iceland economically unable to meet its obligations," Sigurdardottir told Reuters after the vote, which followed an acrimonious national debate. Critics objected to paying for mistakes made by private banks under the watch of other governments and for...
Steve Keen's Debtwatch Sun 2009-08-30 14:33 EDT
One of the reasons I'm still a bear on the economy is because the economists in the optimists camp are relying upon very bad economic theory. If that theory is telling them good times are ahead, that's one of the best predictors of bad times you could have. Capital Assets Pricing Model (CAPM) preached that stock market price shares accurately, that the amount of debt finance a company has doesn't affect its value, and many other notions that have gone up in smoke during the GFC. CAPM developer William Sharpe ``assumed a miracle'': all investors agree about the future and their expectations about the future are correct. Macroeconomic theory has been dominated by IS-LM model erroneously attributed to Keynes but actually due to convervative neoclassical John Hicks, which ``emasculated what was original in Keynes's General Theory, and this bowdlerised version of Keynes was then demolished by Friedman in the 1970s to usher in the Monetarist phase''
Satyajit Das's Blog - Fear & Loathing in Financial Products Sun 2009-08-30 12:20 EDT
In the 1980s, the Japanese were taking over the world. In the 1990s, it was going to be an ?Asian? century. These days the pundits are betting on the ?Chinese Age?. Like all such glib predictions, despite their superficial appeal, they mask complex undercurrents and issues that require careful study. Business journalist Michael Schuman's The Miracle: The Epic Story of Asia's Quest for Wealth. Paul Midler's Poorly Made in China; quality fade. Underlying both `The Miracle' and `Poorly Made in China' is a view of the emerging world best captured by the term `Orientalism', associated with Edward Said...the West's view of the East was shaped by political power and unequal commercial exchange. Said's work built on George Orwell's criticism of colonialism. Former Chinese premier Zhao Ziyang's secret journal `Prisoner of the State' provides antidote to a Western view of East Asia.
El-dollardo Economics; fears; financial products; loath; Satyajit Das's Blog.
Mish's Global Economic Trend Analysis Sun 2009-08-30 12:03 EDT
The second quarter 2009 Quarterly Banking Profile has some interesting charts and facts that inquiring minds will be interested in.Insured Institution Performance Higher Loss Provisions Lead to a $3.7 Billion Net LossMore Than One in Four Institutions Are UnprofitableCharge-Offs and Noncurrent Loans Continue to RiseNet Interest Margins Show Modest ImprovementIndustry Assets Decline by $238 BillionThe Industry Posts a Net Loss for the Quarter The Industry Posts a Net Loss for the Quarter Burdened by costs associated with rising levels of troubled loans and falling asset values, FDIC-insured commercial banks and savings institutions reported an aggregate net loss of $3.7 billion in the second quarter of 2009. Increased expenses for bad loans were chiefly responsible for the industry's loss. Insured institutions added $66.9 billion in loan-loss provisions to their reserves... ``Conventional wisdom regarding money supply suggests there is massive pent up inflation in the works as a result of the buildup of excess reserves...The reality is excessive debt and falling asset prices have rendered the best efforts of the Fed impotent. Banks are not well capitalized, they are insolvent, unwilling and unable to lend.''
15-year high; Bank problem listings; FDIC insured institutions; greater; Mish's Global Economic Trend Analysis; unprofitable.
Jesse's Café Américain Sun 2009-08-30 12:00 EDT
When investors or depositors ask for the immediate withdrawal of 71% of their money there is only one thing to call it: a run on the bank.The selling in the markets is still quiet, and overshadowed by some of the visible bubbles in financial assets and rosy headlines. The bank bailouts are working, but only to produce a false Spring to lure in the last of the greater fools.
Cerberus Investors Want; funds; Jesse's Café Américain; major; running.
Jesse's Café Américain Sun 2009-08-30 11:59 EDT
"Investors Intelligence's latest survey of advisory services showed an impressive 51% bullish and a meager 19% bearish...the spread hasn't been that wide since November 2007." Alan Abelson, Barrons, Aug. 29, 2009Next week we move into September, the riskiest month of the year for financial markets, with the federals escalating preparations for a flu pandemic, while Congress considers legislation... ``selling by corporate insiders in August has surged to $6.1 billion, the highest amount since May 2008. The ratio of insider selling to insider buying hit 30.6, the highest level since TrimTabs began tracking the data in 2004.''
Equity Markets Look Dangerously Wobbly; Insider sell; Jesse's Café Américain; record number.
zero hedge Fri 2009-08-28 17:03 EDT
It seems these days everyone is happy to blame Greenspan for creating the biggest housing/credit bubble in American history, yet few have the same problem when it comes to voicing their support of Ben Bernanke, who is repeating exactly the same monetary steps (mistakes) as performed by his predecessor. Proponents will say that this time the justification was to prevent a full financial systemic collapse, and the trillions of excess liquidity (an approach that even Greenspan did not embark on full bore) that drowned the capital markets were just what the doctor ordered. Whether that is true or not will be debated by historians who analyze the 2009 as the year when China, the US and the Eurozone let loose the most unprecedented monetary loosening in the history of...
Mish's Global Economic Trend Analysis Thu 2009-08-27 10:52 EDT
In every corner, greed continues to amaze. Please consider Bankrupt suppliers seek exec bonuses. A growing number of bankrupt auto suppliers are seeking court approval to pay tens of millions of dollars in bonuses to key executives, as they shed employees and cut costs.
100; Bankrupt Auto Parts Suppliers Seek; executives bonus; Mish's Global Economic Trend Analysis.
naked capitalism Thu 2009-08-27 10:50 EDT
In a show of how much our government thinks that serving the financial oligarchy, rather than the citizenry, is its prime duty, the Fed is fighting to stop the court-ordered disclosure of who borrowed money under the Fed's various lending facilities. The reason I lump the Fed in with "the government" is that the central bank has been serving as an off-balance sheet entity of the Treasury for quite some time. And not only are the Fed and Treasury acting in near lockstep, but there has been no meaningful change in the government stance towards the banksters. Yes, Team Obama makes more of a show of trying to rein them in, but push comes to shove, it's merely Paulson version 2.0: same content, better packaging. Paulson's success in muscling...
Fed Uses Scare Tactics; Forestall Loan Disclosures; naked capitalism; Quelle Surprise; trying.
