Thursday, May 28, 2009
FT.com / In depth - The red ink of a greyer future
FT.com / In depth - The red ink of a greyer future: "The next decade was always going to be difficult. As retirement beckons for the middle-aged “bulge” in many national populations, governments have been facing an expensive demographic transformation. Now, the economic crisis makes the outlook only worse."
Wednesday, May 27, 2009
How Michael Osinski Helped Build the Bomb That Blew Up Wall Street -- New York Magazine
How Michael Osinski Helped Build the Bomb That Blew Up Wall Street -- New York Magazine: "I wrote the software that turned mortgages into bonds.
Watch the Video
Osinski on His Oyster Farm
Because of the news, you probably know more about this than you ever wanted to. The packaging of heterogeneous home mortgages into uniform securities that can be accurately priced and exchanged has been singled out by many critics as one of the root causes of the mess we’re in. I don’t completely disagree. But in my view, and of course I’m inescapably biased, there’s nothing inherently flawed about securitization. Done correctly and conservatively, it increases the efficiency with which banks can loan money and tailor risks to the needs of investors. Once upon a time, this seemed like a very good idea, and it might well again, provided banks don’t resume writing mortgages to people who can’t afford them. Here’s one thing that’s definitely true: The software proved to be more sophisticated than the people who used it, and that has caused the whole world a lot of problems."
Watch the Video
Osinski on His Oyster Farm
Because of the news, you probably know more about this than you ever wanted to. The packaging of heterogeneous home mortgages into uniform securities that can be accurately priced and exchanged has been singled out by many critics as one of the root causes of the mess we’re in. I don’t completely disagree. But in my view, and of course I’m inescapably biased, there’s nothing inherently flawed about securitization. Done correctly and conservatively, it increases the efficiency with which banks can loan money and tailor risks to the needs of investors. Once upon a time, this seemed like a very good idea, and it might well again, provided banks don’t resume writing mortgages to people who can’t afford them. Here’s one thing that’s definitely true: The software proved to be more sophisticated than the people who used it, and that has caused the whole world a lot of problems."
Evil Wall Street Exports Boomed With `Fools' Born to Buy Debt - Bloomberg.com
Evil Wall Street Exports Boomed With `Fools' Born to Buy Debt - Bloomberg.com: "The bundling of consumer loans and home mortgages into packages of securities -- a process known as securitization -- was the biggest U.S. export business of the 21st century. More than $27 trillion of these securities have been sold since 2001, according to the Securities Industry Financial Markets Association, an industry trade group. That's almost twice last year's U.S. gross domestic product of $13.8 trillion.
The growth over the past decade was made possible by overseas banks, which saw the profits U.S. financial institutions were making and coveted the made-in-America technology, much as consumers around the world craved other emblems of American ingenuity from Coca-Cola to Hollywood movies. Wall Street obliged, with disastrous results: two-thirds of a trillion dollars in bank losses, about 40 percent of them outside the U.S."
The growth over the past decade was made possible by overseas banks, which saw the profits U.S. financial institutions were making and coveted the made-in-America technology, much as consumers around the world craved other emblems of American ingenuity from Coca-Cola to Hollywood movies. Wall Street obliged, with disastrous results: two-thirds of a trillion dollars in bank losses, about 40 percent of them outside the U.S."
Financial Rescue Nears GDP as Pledges Top $12.8 Trillion (Update1) - Bloomberg.com
Financial Rescue Nears GDP as Pledges Top $12.8 Trillion (Update1) - Bloomberg.com: "The U.S. government and the Federal Reserve have spent, lent or committed $12.8 trillion, an amount that approaches the value of everything produced in the country last year, to stem the longest recession since the 1930s.
New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008."
New pledges from the Fed, the Treasury Department and the Federal Deposit Insurance Corp. include $1 trillion for the Public-Private Investment Program, designed to help investors buy distressed loans and other assets from U.S. banks. The money works out to $42,105 for every man, woman and child in the U.S. and 14 times the $899.8 billion of currency in circulation. The nation’s gross domestic product was $14.2 trillion in 2008."
Can China Catch a Cool Breeze?
Can China Catch a Cool Breeze?: "This small wind farm represents an alternate future: that of China as a green technology giant.
The People's Republic of China faces two problems that could be addressed with one solution.
The global economic crisis has hit China hard. The country's exports and Gross Domestic Product growth have dropped dramatically; over the past year tens of thousands of factories have closed, and an estimated 20 million workers have lost their jobs. Social unrest is growing, and many fear it could spin out of control. In the face of that, China must boost its internal investment and consumption. In other words, China, which exports much of its savings, must absorb more of the surplus it generates--it must stimulate its own economy. The Chinese government's $585 billion stimulus package, announced in November and dedicated mostly to infrastructure, is an attempt to do just that. A second, equally massive intervention may be on the way soon."
The People's Republic of China faces two problems that could be addressed with one solution.
The global economic crisis has hit China hard. The country's exports and Gross Domestic Product growth have dropped dramatically; over the past year tens of thousands of factories have closed, and an estimated 20 million workers have lost their jobs. Social unrest is growing, and many fear it could spin out of control. In the face of that, China must boost its internal investment and consumption. In other words, China, which exports much of its savings, must absorb more of the surplus it generates--it must stimulate its own economy. The Chinese government's $585 billion stimulus package, announced in November and dedicated mostly to infrastructure, is an attempt to do just that. A second, equally massive intervention may be on the way soon."
FBI saw mortgage fraud early
FBI saw mortgage fraud early: "The FBI was aware for years of 'pervasive and growing' fraud in the mortgage industry that eventually contributed to America's financial meltdown, but did not take definitive action to stop it.
'It is clear that we had good intelligence on the mortgage-fraud schemes, the corrupt attorneys, the corrupt appraisers, the insider schemes,' said a recently retired, high FBI official. Another retired top FBI official confirmed that such intelligence went back to 2002.
The problem, according to the two FBI retirees and several other current and former bureau colleagues, is that the bureau was stretched so thin that no one noticed when those lenders began packaging bad mortgages into bad securities."
'It is clear that we had good intelligence on the mortgage-fraud schemes, the corrupt attorneys, the corrupt appraisers, the insider schemes,' said a recently retired, high FBI official. Another retired top FBI official confirmed that such intelligence went back to 2002.
The problem, according to the two FBI retirees and several other current and former bureau colleagues, is that the bureau was stretched so thin that no one noticed when those lenders began packaging bad mortgages into bad securities."
William K. Black: The Two Documents Everyone Should Read to Better Understand the Crisis
William K. Black: The Two Documents Everyone Should Read to Better Understand the Crisis: "As a white-collar criminologist and former financial regulator much of my research studies what causes financial markets to become profoundly dysfunctional. The FBI has been warning of an 'epidemic' of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these frauds.1 When the person that controls a seemingly legitimate business or government agency uses it as a 'weapon' to defraud we categorize it as a 'control fraud'"
US watchdog calls for bank executives to be sacked | Business | The Observer
US watchdog calls for bank executives to be sacked | Business | The Observer: "Elizabeth Warren, chief watchdog of America's $700bn (£472bn) bank bailout plan, will this week call for the removal of top executives from Citigroup, AIG and other institutions that have received government funds in a damning report that will question the administration's approach to saving the financial system from collapse.
Warren, a Harvard law professor and chair of the congressional oversight committee monitoring the government's Troubled Asset Relief Program (Tarp), is also set to call for shareholders in those institutions to be 'wiped out'. 'It is crucial for these things to happen,' she said. 'Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade.' She declined to give more detail but confirmed that she would refer to insurance group AIG, which has received $173bn in bailout money, and banking giant Citigroup, which has had $45bn in funds and more than $316bn of loan guarantees."
Warren, a Harvard law professor and chair of the congressional oversight committee monitoring the government's Troubled Asset Relief Program (Tarp), is also set to call for shareholders in those institutions to be 'wiped out'. 'It is crucial for these things to happen,' she said. 'Japan tried to avoid them and just offered subsidy with little or no consequences for management or equity investors, and this is why Japan suffered a lost decade.' She declined to give more detail but confirmed that she would refer to insurance group AIG, which has received $173bn in bailout money, and banking giant Citigroup, which has had $45bn in funds and more than $316bn of loan guarantees."
A New Way Forward
A New Way Forward: "Build Out Your Action
Your friends want to know this is happening
Subject: Time to push the bankers out!
We need to talk about the government's handling of the banking crisis. 94% of Americans dislike the bailouts, more than 50% support the banks' temporary nationalization. It's time to take the economics debate into our own hands. On June 10, we're holding national educational forums on 'Why are bankers sitting on the bailout money? What is nationalization? What went wrong?'
I am not going to stand by and let the administration continue to pretend they don't know what is going on. I want an end to rewards for bank CEO's, and learn about new policies that protect us against a massive meltdown ever again.
In April, thousands of Americans protested against the corruption and greed fueling our current policies. Now, we need to help answer people's questions and fears about how to get rid of the toxic assets and how to stop bankers from sitting on the bailout money. In the same way that the banking industry has been pushing politicians to act in their favor, these forums can help all of us push for policies to rebuild the economy. FInd yours here: http://www.anewwayforward.org
This website, called 'A New Way Forward,' is hosting these forums, but individuals are organizing them for their home states. The forums are being built from the ground up. Obama needs to see that there is real political viability to policies that put the public first.
New York, NY USA The Tank
June 8, 2009 at 7:00pm
354 West 45th Street between 8th and 9th Avenues"
Your friends want to know this is happening
Subject: Time to push the bankers out!
We need to talk about the government's handling of the banking crisis. 94% of Americans dislike the bailouts, more than 50% support the banks' temporary nationalization. It's time to take the economics debate into our own hands. On June 10, we're holding national educational forums on 'Why are bankers sitting on the bailout money? What is nationalization? What went wrong?'
I am not going to stand by and let the administration continue to pretend they don't know what is going on. I want an end to rewards for bank CEO's, and learn about new policies that protect us against a massive meltdown ever again.
In April, thousands of Americans protested against the corruption and greed fueling our current policies. Now, we need to help answer people's questions and fears about how to get rid of the toxic assets and how to stop bankers from sitting on the bailout money. In the same way that the banking industry has been pushing politicians to act in their favor, these forums can help all of us push for policies to rebuild the economy. FInd yours here: http://www.anewwayforward.org
This website, called 'A New Way Forward,' is hosting these forums, but individuals are organizing them for their home states. The forums are being built from the ground up. Obama needs to see that there is real political viability to policies that put the public first.
New York, NY USA The Tank
June 8, 2009 at 7:00pm
354 West 45th Street between 8th and 9th Avenues"
Les Leopold, author of The Looting of America, Explains the Financial Collapse and Bailout // Current
Les Leopold, author of The Looting of America, Explains the Financial Collapse and Bailout // Current: "Les Leopold, author of The Looting of America, Explains the Financial Collapse and Bailout"
The Bailout Is a Fraud That Could Bring Down Obama | Corporate Accountability and WorkPlace | AlterNet
The Bailout Is a Fraud That Could Bring Down Obama | Corporate Accountability and WorkPlace | AlterNet: "the banks are insolvent. That's why they must rely on the Troubled Assets Relief Program. But at the same time, they are claiming to be healthy. Both things can't be true.
So we get smiley-face reports about how Goldman and Wells Fargo are posting record profits. Investors and citizens are supposed to be excited to see those profit numbers--comprised of their own tax dollars plus the banks refusing to accurately value their toxic assets.
This is more than an unfortunate downturn, Black says. It is the result of massive, pervasive fraud, and a deregulatory culture that has nurtured criminal behavior by very highly paid bank executives.
The whole culture is rotten. And the regulators come right out of that corrupt, Wall Street culture."
So we get smiley-face reports about how Goldman and Wells Fargo are posting record profits. Investors and citizens are supposed to be excited to see those profit numbers--comprised of their own tax dollars plus the banks refusing to accurately value their toxic assets.
This is more than an unfortunate downturn, Black says. It is the result of massive, pervasive fraud, and a deregulatory culture that has nurtured criminal behavior by very highly paid bank executives.
The whole culture is rotten. And the regulators come right out of that corrupt, Wall Street culture."
Les Leopold: Fear and Looting in America: Be Happy as Wall Street walks off with Your Money
Les Leopold: Fear and Looting in America: Be Happy as Wall Street walks off with Your Money: "if we had the courage to put a very small tax on each and every Wall Street financial transaction (see my proposal in Looting of America), we would generate more than enough funds to wean ourselves from fossil fuels, promote alternative energy, create green jobs and finally slow down global warming.
I don't know about you, but if my kids could go to college without accumulating massive debts, be assured access to decent health care, not worry that globalization would continually undermine their livelihoods, and finally see the waning of global warming, I'd be one happy Da"
I don't know about you, but if my kids could go to college without accumulating massive debts, be assured access to decent health care, not worry that globalization would continually undermine their livelihoods, and finally see the waning of global warming, I'd be one happy Da"
What the Wall Street wants us to forget? | 21 May 2009 | www.commodityonline.com
What the Wall Street wants us to forget? | 21 May 2009 | www.commodityonline.com: "Wall Street is praying that we forget how they broke open the Treasury vault to the tune of trillions in loan guarantees, subsidies and interest free money in addition to the more highly publicized TARP funds -- the largest transfer of wealth since African-American slaves built the South. It would be nice if we forgot about proposed wage caps on bankers. It would be nice if we stopped talking about ridiculous reforms and regulations that might prevent banker and hedge funds operators from walking off with hundreds of millions in private booty. Better to turn our attention to the auto industry. And maybe, if it all breaks just right, most of us might start to believe that the real problem all along was Detroit, rather than the wildest Wall Street casino ever created. It would be much better for the wealthy if we returned to one of our favorite pastimes: blaming autoworkers’ health care and pension benefits, or blasting big government for interfering in the economy."
The Reckoning - From Midwest to M.T.A., Pain From Global Gamble - Series - NYTimes.com
The Reckoning - From Midwest to M.T.A., Pain From Global Gamble - Series - NYTimes.com: "But now, hundreds of cities and government agencies are facing economic turmoil. Far from being isolated examples, the Wisconsin schools and New York’s transportation system are among the many players in a financial fiasco that has ricocheted globally."
Tuesday, May 26, 2009
National Journal Magazine - The Next Crisis Is On The Way
National Journal Magazine - The Next Crisis Is On The Way: "Last week, the bond market hesitated when it was asked to absorb a new tranche of government debt. Fears about long-term fiscal viability may already be coming to the fore, and the recovery has not even started yet. Sooner rather than later, the White House will have to start talking about serious spending cuts, serious tax increases, or both"
FT.com / Columnists / Martin Wolf - Fixing bankrupt systems is just the beginning
FT.com / Columnists / Martin Wolf - Fixing bankrupt systems is just the beginning: "the path to recovery is likely to be slow, whichever is chosen. As the latest World Economic Outlook notes in an important chapter, recessions that follow financial crises are unusually severe. So, too, are globally synchronised recessions. But now we are living through a globally synchronised recession that coincides with a huge financial crisis that emanates from the core countries of the world economy, particularly the US. This is a recipe for a long recession and a weak recovery. Whatever is done about the financial system, “deleveraging” is the order of the day (see chart). The UK’s position in this looks dire. But that of the US looks quite bad, too, even compared with that of Japan in the 1990s."
FT.com / China - China has long way to go to dislodge dollar
FT.com / China - China has long way to go to dislodge dollar: "Why is a country that is still poor, people are increasingly asking, lending so much money to a rich country – especially when officials warn constantly about a possible slump in the dollar. Beijing has also reacted angrily to anyone who suggests its huge build-up in foreign currency reserves contributed to the orgy of liquidity in global financial markets.
Some of the outrage is understandable – who does not believe that profligacy in the US was at the heart of the crisis? Yet China’s huge exposure to the dollar is partly a trap of its own making.
If the Chinese currency had appreciated more rapidly in recent years, the economy might not have experienced such turbo-charged growth rates – but its reserves would not have exploded so quickly and the much-needed shift to domestic demand would be more advanced.
It is all very well for Beijing to criticise irresponsible behaviour in the US, but for China to run a current account surplus of 8-9 per cent of gross domestic product, as it has been doing, someone on the other side of the ledger must be running big deficits."
Some of the outrage is understandable – who does not believe that profligacy in the US was at the heart of the crisis? Yet China’s huge exposure to the dollar is partly a trap of its own making.
If the Chinese currency had appreciated more rapidly in recent years, the economy might not have experienced such turbo-charged growth rates – but its reserves would not have exploded so quickly and the much-needed shift to domestic demand would be more advanced.
It is all very well for Beijing to criticise irresponsible behaviour in the US, but for China to run a current account surplus of 8-9 per cent of gross domestic product, as it has been doing, someone on the other side of the ledger must be running big deficits."
FT.com / Comment / Editorial - Sound and fury in the world economy
FT.com / Comment / Editorial - Sound and fury in the world economy: "Economies are behaving unpredictably and will continue to do so. The instability is both cause and consequence of the great uncertainty that has been spreading out from the financial markets. Fearful and confused, people react erratically to changing news, reinforcing confused market behaviour.
It does not help that our economic theories were constructed for a different world. Most models depict economies kept close to equilibrium by smooth adjustments. But we face a very real danger of large, abrupt changes: bank collapses or currency crises. And unlike what most models assume, prices are not properly clearing all markets: the cost of credit may be record-low – but it is hard to find lenders not shrinking their balance sheets."
It does not help that our economic theories were constructed for a different world. Most models depict economies kept close to equilibrium by smooth adjustments. But we face a very real danger of large, abrupt changes: bank collapses or currency crises. And unlike what most models assume, prices are not properly clearing all markets: the cost of credit may be record-low – but it is hard to find lenders not shrinking their balance sheets."
FT.com / UK - Germany drags eurozone faster into slump
FT.com / UK - Germany drags eurozone faster into slump: "The eurozone recession intensified markedly earlier this year. It outpaced the US slowdown in ferocity and was dragged down by a contraction of almost 4 per cent in the German economy.
Gross domestic product in the 16-country region contracted by a greater-thanexpected 2.5 per cent in the first quarter, according to official data yesterday. That deepened what was already the worst recession in continental Europe since the second world war. The final quarter of 2008 had seen a 1.6 per cent fall in GDP."
Gross domestic product in the 16-country region contracted by a greater-thanexpected 2.5 per cent in the first quarter, according to official data yesterday. That deepened what was already the worst recession in continental Europe since the second world war. The final quarter of 2008 had seen a 1.6 per cent fall in GDP."
FT.com / UK - Germany's troubles spark talk of Weimar
FT.com / UK - Germany's troubles spark talk of Weimar: "As the government unveils a dismal 2009 forecast today that will confirm Germany is in its steepest postwar recession - it should show the economy contracting 5-6 per cent - talk in Berlin is not about this slump, but about the one of 80 years ago that brought the Nazis to power."
FT.com / China - China stuck in ‘dollar trap’
FT.com / China - China stuck in ‘dollar trap’
China’s official foreign exchange manager is still buying record amounts of US government bonds, in spite of Beijing’s increasingly vocal fear of a dollar collapse, according to officials and analysts.
China’s official foreign exchange manager is still buying record amounts of US government bonds, in spite of Beijing’s increasingly vocal fear of a dollar collapse, according to officials and analysts.
Monday, May 25, 2009
Web Series Like 'The Guild,' 'Sorority Forever' Are in a Prime Time of Their Own - washingtonpost.com
Web Series Like 'The Guild,' 'Sorority Forever' Are in a Prime Time of Their Own - washingtonpost.com: "Seen any good TV lately? I have. I haven't seen it on TV, though, not even replayed on Hulu.com. Hulu is amateur hour. I'm deep into Web-only stuff right now. And it's really, really good."
Friday, May 22, 2009
Waiting for CNBC : CJR
Waiting for CNBC : CJR: "So what are the right problems with CNBC? i called Taleb a few weeks after his Power Lunch appearance to get his opinion. Few are better positioned than Taleb to answer the question. He is, for one, a professional trader of derivatives, the unregulated securities that accelerated the panic of ’08. If CNBC neglected a journalistic duty, it began with ignoring derivatives and other securities that are difficult to invest in or even get pricing data for.
As it happens, the market for those securities is far bigger than the stock market on which CNBC focuses its energies. It is also far more lucrative; a startling if little-noticed February column in the Financial Times by Citigroup’s chief global equity strategist pointed out that global equities delivered a negative 29 percent return over the ten years prior, in stark contrast to government bonds, which had delivered an 80 percent return. The real action over those ten years, however, took place in riskier bonds and the complicated “swaps” that gained and lost value in tune with the market’s perception of their creditworthiness and the direction of interest rates. The advent of those securities essentially made it possible, and profitable, to speculate on bonds as one would stocks—for those able to play the bond market, which requires not only serious cash but a Bloomberg terminal for tracking prices. And that’s just bonds: the prices of derivatives like credit default swaps, which rise and fall in accordance with underlying bonds, are almost impossible for someone who’s not a derivatives trader to find out; there’s no exchange or clearinghouse for the things, even as hundreds of trillions of dollars in “notional” value were tied to them at the height of the crisis. The problems with CNBC are all rooted in an underlying fraud, an insider game that was not CNBC’s creation."
As it happens, the market for those securities is far bigger than the stock market on which CNBC focuses its energies. It is also far more lucrative; a startling if little-noticed February column in the Financial Times by Citigroup’s chief global equity strategist pointed out that global equities delivered a negative 29 percent return over the ten years prior, in stark contrast to government bonds, which had delivered an 80 percent return. The real action over those ten years, however, took place in riskier bonds and the complicated “swaps” that gained and lost value in tune with the market’s perception of their creditworthiness and the direction of interest rates. The advent of those securities essentially made it possible, and profitable, to speculate on bonds as one would stocks—for those able to play the bond market, which requires not only serious cash but a Bloomberg terminal for tracking prices. And that’s just bonds: the prices of derivatives like credit default swaps, which rise and fall in accordance with underlying bonds, are almost impossible for someone who’s not a derivatives trader to find out; there’s no exchange or clearinghouse for the things, even as hundreds of trillions of dollars in “notional” value were tied to them at the height of the crisis. The problems with CNBC are all rooted in an underlying fraud, an insider game that was not CNBC’s creation."
Thursday, May 21, 2009
Power Problem : CJR
Power Problem : CJR: "he press’s role is, as always, ambiguous. On the one hand, no one at Forbes sold a single collateralized debt obligation to any German pension fund, so the press certainly can’t be blamed for causing the crisis. On the other hand, Bloomberg News employs 2,300 business journalists, The Wall Street Journal, 700-plus, The New York Times, 110, etc., and all business-news organizations purport to cover the financial system and imply, if not claim outright, mastery over a particular beat—the one that just melted down to China to the shock of one and all. So the press isn’t exactly an innocent bystander, either. It’s not 100 percent responsible, and it’s not zero percent. It’s somewhere in the middle, closer to zero than fifty, I’d say, but it had something to do with it."
Salon.com Life | It's cheap -- but can you swallow it?
Salon.com Life | It's cheap -- but can you swallow it?
The past few years have been an age of unprecedented food snobbery, a time of green markets and artisanal produce, when even casual foodies are addicted to "Top Chef" and restaurants list their heirloom ingredients like a wine list. From food blogs to best-selling books, food is not just part of a national conversation, it's also an aspirational lifestyle -- to eat organic is to live the good life.
Meanwhile, fast food restaurants became symbolic of our cultural rot. "Fast Food Nation" and, later, "Super Size Me" waved tent-size flags about the dangers of American overindulgence. For a certain segment of the population, what once seemed like a guilty pleasure became more akin to moral defeat. Comedian Patton Oswalt seemed to sum it all up when he called one egregious KFC meal a "failure dish in a sadness bowl."
FT.com / Markets / Ask the expert - The future of capitalism
FT.com / Markets / Ask the expert - The future of capitalism: "Never again should we let ideology guide central banking and its regulatory responsibilities. Central banks need new mandates that explicitly tie their policy targets to the requirement of containing the excesses of asset bubbles and the severe economic distortions they spawn. Then, and only then, can the new financial system be on much sounder footing than the old one. But that’s not to say that we in the industry shouldn’t take a long and hard look in the mirror before we embark on our own Herculean task of attempting to rebuild a failed financial system."
FT.com / Columnists / Martin Wolf - This crisis is a moment, but is it a defining one?
FT.com / Columnists / Martin Wolf - This crisis is a moment, but is it a defining one?
Is the current crisis a watershed, with market-led globalisation, financial capitalism and western domination on the one side and protectionism, regulation and Asian predominance on the other? Or will historians judge it, instead, as an event caused by fools, signifying little? My own guess is that it will end up in between. It is neither a Great Depression, because the policy response has been so determined, nor capitalism’s 1989.
Let us examine what we know and do not know of its impact on the economy, finance, capitalism, the state, globalisation and geopolitics.
Tuesday, May 19, 2009
A Reporter at Large: Anatomy of a Meltdown: Reporting & Essays: The New Yorker
A Reporter at Large: Anatomy of a Meltdown: Reporting & Essays: The New Yorker
Bernanke’s knowledge of Lincoln was more limited, but one morning the man who organizes the parking pool in the basement of the Fed’s headquarters had given him a copy of a statement Lincoln made in 1862, after he was criticized by Congress for military blunders during the Civil War: “If I were to try to read, much less answer, all the attacks made on me, this shop might as well be closed for any other business. I do the very best I know how—the very best I can; and I mean to keep doing so until the end. If the end brings me out all right, what is said against me won’t amount to anything. If the end brings me out wrong, ten angels swearing I was right will make no difference.”
Bernanke keeps the statement on his desk, so he can refer to it when necessary.Monday, May 18, 2009
China in crisis
China in crisis: "China is facing its greatest economic challenge for many years, says Elliot Wilson. Journeying across the country, he finds silent factories, desolate shopping malls – and migrant workers in despair"
The phones have stopped ringing on the sales desk
The phones have stopped ringing on the sales desk: "The drying up of orders has brought a dramatic 26 per cent fall in China’s exports in the year to February. In the past seven months, exports have plummeted by $725 billion, with almost 90 per cent of this decline occurring in the first two months of 2009.
For an economy accustomed to phenomenal growth over the past 15 years – driven in large part by exports of mass-produced household products and consumer goods to (until now) ever-expanding Western markets – such figures ring alarm bells. In Beijing they have sparked fears of social and political unrest as unemployment has climbed and migrant workers are forced back into rural areas for subsistence living."
For an economy accustomed to phenomenal growth over the past 15 years – driven in large part by exports of mass-produced household products and consumer goods to (until now) ever-expanding Western markets – such figures ring alarm bells. In Beijing they have sparked fears of social and political unrest as unemployment has climbed and migrant workers are forced back into rural areas for subsistence living."
Op-Ed Columnist - Empire of Carbon - NYTimes.com
Op-Ed Columnist - Empire of Carbon - NYTimes.com
China cannot continue along its current path because the planet can’t handle the strain.
China cannot continue along its current path because the planet can’t handle the strain.
Sunday, May 17, 2009
Friday, May 15, 2009
Letter From Berlin: Parties Plan to Bash CEOs in Election Campaign - SPIEGEL ONLINE - News - International
Letter From Berlin: Parties Plan to Bash CEOs in Election Campaign - SPIEGEL ONLINE - News - International: "'Hooligans, Pyromaniacs and Gangsters'
Meanwhile, hardly a day goes by without the senior SPD politicians sharply criticizing top business leaders. SPD Chairman Franz Müntefering says that banks had 'hooligans, pyromaniacs and gangsters' on their payrolls. He also likes to call them 'modern robber barons.'"
Meanwhile, hardly a day goes by without the senior SPD politicians sharply criticizing top business leaders. SPD Chairman Franz Müntefering says that banks had 'hooligans, pyromaniacs and gangsters' on their payrolls. He also likes to call them 'modern robber barons.'"
AFP: $1 tln at risk in German banks: report
AFP: $1 tln at risk in German banks: report: "$1 tln at risk in German banks: report
Apr 25, 2009
BERLIN (AFP) — Germany's banking system is exposed to over one trillion dollars' worth of 'toxic' or risky assets, news media in Europe's largest economy said Saturday citing a confidential financial watchdog report.
Within the 816-billion-euro headline sum (1,080 billion dollars), 355 billion euros are held in the network of Germany's regional state banks, according to the document revealed by the Suddeutsche Zeitung newspaper and the online edition of Der Spiegel magazine."
Apr 25, 2009
BERLIN (AFP) — Germany's banking system is exposed to over one trillion dollars' worth of 'toxic' or risky assets, news media in Europe's largest economy said Saturday citing a confidential financial watchdog report.
Within the 816-billion-euro headline sum (1,080 billion dollars), 355 billion euros are held in the network of Germany's regional state banks, according to the document revealed by the Suddeutsche Zeitung newspaper and the online edition of Der Spiegel magazine."
Business Feed Article | Business | guardian.co.uk
Business Feed Article | Business | guardian.co.uk
Ireland's efforts to sell sovereign debt are being hurt by anger among powerful German investors who think it is disloyal toward the European Union, the head of the Irish debt management agency said on Thursday.
Ireland's efforts to sell sovereign debt are being hurt by anger among powerful German investors who think it is disloyal toward the European Union, the head of the Irish debt management agency said on Thursday.
Michael Somers said a stream of bad news about the Irish economy was also complicating the government's efforts to raise a record 25 billion euros ($34 billion) this year to help plug a yawning budget deficit.
Tuesday, May 12, 2009
compiling useful links here - Economic Turning Point
compiling useful links here - Economic Turning Point: "This crisis has to be divided into immediate causes and underlying flaws. Essentially, there was a big pile of tinder and the current crisis shot a huge flame into it."
Friday, May 8, 2009
Thursday, May 7, 2009
FT.com / Video & Audio / Interactive graphics - Subprime lobbyist spending
FT.com / Video & Audio / Interactive graphics - Subprime lobbyist spending: "Federal campaign contributions, 1994-2008"
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