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Softpanorama
(slightly skeptical)
Open Source Software Educational Society |
May the
source be with you,
but remember the KISS principle ;-)
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Financial Skeptic Humor
Casino Capitalism Chronicles
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Back in the Goode Olde Days, people spent uncounted hours trying
to forecast the future. If they had a cat, they could try felidomancy,
which is the art of using cats to predict the future. If they had
feet, they could try pedomancy.
Nowadays, people indulge in fedomancy, which is the art of predicting
interest rates by observing the Federal Reserve Board. It's a difficult
practice.
John Wagooner,
USA
Today
God, grant me the capital to accept the things
I cannot change; the reserves to change the things I can; and the
Fed Auction when all that blows up. Amen.
Calculated Risk
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Due to the size financial skeptic dictionary is now converted
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Notes:
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If you got to this page without visiting
Naked Capitalism
(and clicking on some advertisement in appreciation of the intellect
of Yves Smith),
please do it right now...
Yves Smith' s blog is really a crown
jewel of economic blogosphere !!!
If you are an Amazon customer, please,
please buy your Amazon items using links from
Yves Smith's blog...
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2005 |
| "... anyone who has ever
read Larry Kudlow wonders how he's able to manage a folding
chair without assistance, much less other people's money"
Ezra Klein
“Never before in the field
of global finance was so much damage done to so many by so few.”
Reflection on Winston Churchill’s
tribute to the RAF
“I’ve abandoned
free-market principles to save the free-market system”
George W Bush
Wall Street is about to
become the new
Catholic Church -- the most distrusted and vilified
institution in America. It's hard to top priestly pedophilia
(and bishops covering up for them) for sheer despicability,
but Bernie Madoff and his fellow hucksters are giving the
men of clod a close run for their -- and our -- money.
Dan Gerstein,
Forbes |
[Jan 5, 2009] Nice article titles and catch phases
financial pedophilia is something news...
Forbes
Wall Street is about to become the new
Catholic Church--the most distrusted and vilified institution in
America. It's hard to top priestly pedophilia (and bishops covering
up for them) for sheer despicability, but Bernie Madoff and his
fellow hucksters are giving the men of clod a close run for
their--and our--money.
Hat tip to Big Picture
Hell begins the day that God grants you the vision to see all
that you could have done, should have done, and would have done, but
did not do. —Johann Wolfgang von Goethe (1749-1832)
While Jim Kramer was always a clown (only Kudlow comes close ;-),
others are not much better... For additional list of clowns see
The worst media calls of 2008 - MSN Money and
'10 Predictions' for 2008 (Reuter).
Lately, it seems like everywhere you turn, someone is crowing that
they saw the current financial crisis coming. George Soros. John Paulson.
Steve Eisman.
Armando Falcon. There are so many of them, you wonder who didn't
see it coming. The answer is, well, most people. After the jump, have
a look back at some of the stocks chosen in the annual investment guides
of some leading publications (including, alas, this one) as smart buys
in 2008.
Jon Birger, senior writer, Fortune’s Investors Guide 2008
What he said then: “Question: What do you call it when
an $8 billion asset write-down translates into a $30 billion loss in
market cap? Answer: an overreaction … Smart investors should buy [Merrill
Lynch] stock before everyone else comes to their senses.”
What we know now: Merrill agreed to sell itself Bank
of America to avoid a Lehman-like flameout in a deal closing in January.
Meanwhile, Merrill's shares plummeted 77 percent.
Elaine Garzarelli, president of Garzarelli Capital, in Business
Week's Investment Outlook 2008
What she said then: “Garzarelli is advising investors to
buy some of the most beaten-down stocks, including those of giant financial
institutions such as Lehman Brothers, Bear Stearns, and Merrill Lynch.
What would cause her to turn bearish? Not much. ‘Our indicators are
extremely bullish.’”
What we know now: As of January 1, none of these firms
will still exist. Lehman went bankrupt. JPMorgan and Chase bought Bear
Stearns in a fire sale. We all know Merrill’s fate.
Sarah Ketterer, CEO of Causeway Capital Management in Fortune’s
Investors Guide 2008
What she said then: Q: “Sarah, where to you see value?”
A: “There are [financial firms] that have been tainted by this huge
credit problem … Fannie Mae and Freddie Mac have been pummeled. Our
stress-test analysis indicates those stocks are at bargain basement
prices.”
What we know now: The federal government placed these
two lenders under “conservatorship” in September. By then, shares of
Fannie and Freddie had lost 90 percent of their value.
Jon Birger, senior writer, in Fortune’s Investors Guide
2008
What he said then: “CEO Jeffrey Immelt has been leading
a successful makeover at General Electric, though you wouldn't know
it from GE’s flaccid stock price. Our bet is that in a stormy market
investors will gravitate toward the ultimate blue chip.”
What we know now: GE’s stock price has tumbled 55 percent
percent this year and it’s on the verge of losing its triple-A credit
rating. Analysts are nervous about its financial-services division,
which provides about half of GE’s earnings.
Archie MacAllaster, chairman of MacAllaster Pitfield MacKay
in Barron’s 2008 Roundtable
What he said then:“A lot of people think Bank of America
will cut its dividend, but I don't think there's a chance in the world.
I think they'll raise it this year; they have raised it a little in
each of the past 20 to 25 years. My target price for the stock is $55.”
What we know now: BofA may not have gone the way of
Lehman. But investors who sold when MacAllaster told them to buy were
shrewd. The bank’s share price now hovers around $14, and it has slashed
its dividend in half.
One of our own: James J. Cramer, contributing editor, in his
"Future of Business" column in New York Magazine
What
he said then: "Goldman Sachs makes more money than every
other brokerage firm in New York combined and finishes the year at $300
a share. Not a prediction — an inevitability.”
What we know now: In mid-December, Goldman Sachs’ share
price was $78. The firm also announced a $2.2 billion quarterly loss,
its first since going public nine years ago.
[Dec 31, 2008] Q: On black swaps and stock market in 2008
Q: If Tchaikovsky wrote a ballet about stock market crash in 2008 what
would be the hit music peace
A: Of course, this would be "The dance of black swans"
[Dec 31, 2008] Song about repatization of banks and price discovery
for assets
Hat tip to reader Glen commenting Naked Capitalism blog entry
Banking Industry Sinking Faster Than Government Can Bail
Round, like a circle in a spiral
Like a wheel within a wheel
Never ending or beginning
On an ever-spinning whell
... ... ...
Like the circles that you find
In the windmills of your mind.
Sting -
Windmills
[Dec 30, 2009] Like the Onion said:
[Elections are over, but] “the economy
continues to campaign for Obama”…
Here are some of the worst predictions that were made about 2008.
Savor them—a crop like this doesn't come
along every year.
1. "A very powerful and durable rally is in the
works. But it may need another couple of days to lift off. Hold the
fort and keep the faith!" —Richard
Band, editor, Profitable Investing Letter, Mar. 27,
2008
At the time of the prediction, the Dow Jones industrial average was
at 12,300. By late December it was at 8,500.
2. AIG (AIG)
"could have huge gains in the second quarter." —Bijan
Moazami, analyst, Friedman, Billings, Ramsey, May 9, 2008
AIG wound up losing $5 billion in that quarter and $25 billion in
the next. It was taken over in September by the U.S. government, which
will spend or lend $150 billion to keep it afloat.
3. "I think this is a case where Freddie Mac (FRE)
and Fannie Mae (FNM)
are fundamentally sound. They're not in danger of going under…I think
they are in good shape going forward." —Barney
Frank (D-Mass.), House Financial Services Committee chairman, July
14, 2008
Two months later, the government forced the mortgage giants into
conservatorships and pledged to invest up to $100 billion in each.
4. "The market is in the process of correcting itself."
—President
George W. Bush, in a Mar. 14, 2008 speech
For the rest of the year, the market kept correcting…and correcting…and
correcting.
5. "No! No! No! Bear Stearns is not in trouble."
—Jim
Cramer, CNBC commentator, Mar. 11, 2008
Five days later, JPMorgan Chase (JPM)
took over Bear Stearns with government help, nearly wiping out shareholders.
6. "Existing-Home Sales to Trend Up in 2008" —Headline
of a
National Association of Realtors press release, Dec. 9, 2007
On Dec. 23, 2008, the group said November sales were running at an
annual rate of 4.5 million—down 11% from a year earlier—in the worst
housing slump since the Depression.
7. "I think you'll see [oil prices at] $150 a barrel
by the end of the year" —T.
Boone Pickens, June 20, 2008
Oil was then around $135 a barrel. By late December it was below
$40.
8. "I expect there will be some failures. … I don't
anticipate any serious problems of that sort among the large internationally
active banks that make up a very substantial part of our banking system."
—Ben
Bernanke, Federal Reserve chairman, Feb. 28, 2008
In September, Washington Mutual became the largest financial institution
in U.S. history to fail. Citigroup (C)
needed an even bigger rescue in November.
9. "In today's regulatory environment, it's virtually
impossible to violate rules." —Bernard
Madoff, money manager, Oct. 20, 2007
About a year later, Madoff—who once headed the Nasdaq Stock Market—told
investigators he had cost his investors $50 billion in an alleged Ponzi
scheme.
10. A Bound Man: Why We Are Excited About
Obama and Why He Can't Win, the
title of a book by conservative commentator Shelby Steele, published
on Dec. 4, 2007.
Mr. Steele, meet President-elect Barack Obama.
February 13, 2005 | Big Picture
I came across an economist
joke on point with the ideas in this post:
Seven habits that help produce the anything-but-efficient
markets that rule the world by Paul Krugman in Fortune.
1. Think short term.
2. Be greedy.
3. Believe in the greater fool
4. Run with the herd.
5. Overgeneralize
6. Be trendy
7. Play with other people's money
[Dec 26, 2008] Madoff Ponzi scandal: "It's like discovering that Ben
Bernanke is running a meth lab inside the Federal Reserve."
Bernanke's Fed already managed to made itself the world's largest financial
junkyard but the possibility of a meth lab inside Fed is a qualitivly new
level and definitely represents unorthodox thinking that we all need now
:-)
Zounds! Public sentiment toward the accelerating economic fiasco
has shifted, seemingly overnight, from a mood of nauseated amazement
to one of panicked grievance as the United States moves closer to an
apparent comprehensive collapse -- and so ill-timed, wouldn't you know
it, to coincide with the annual rigors of Santa Claus. The tipping point
seems to be the Bernie Madoff $50 billion Ponzi scandal, which represents
the grossest failure of authority and hence legitimacy in finance to
date in as much as Mr. Madoff was a former chairman of the NASDAQ, for
godsake. It's like discovering that Ben
Bernanke is running a meth lab inside the Federal Reserve.
"Wow they are putting a lot of faith in Obama, with the democratic Congress
has a lower approval rating than the Bush administration."
As a dog owner, also, I firmly believe that
I get a better, more rational, and more
self-aware response from my dogs than from this administration.
Obama Approval Poll The Big Picture
“An Obama job approval rating of 79 percent — that’s the sort
of rating you see when the public rallies around a leader after
a national disaster. To many Americans,
the Bush administration was a national disaster.”
- Bill Schneider, CNN’s senior political analyst, on a poll indicating
overwhelming approval for Barack Obama.
This bloody brilliant card is what a hedgie we know is sending out
for Christmas:
Peter Shiff expose CNBC clowns:
"The people on the financial news shows are idiots who are trying to
make you poor". Idiots ? No way. They are paid to do this by Wall Street,
don't they ? But the quote "anyone
who has ever read Larry Kudlow wonders how he's able to manage a folding
chair without assistance, much less other people's money.
" is a real hit !!!
Via Mike Scherer, the people on the financial
news shows are idiots who are trying to make you poor....
The gig is to make you feel like you can make money, so you keep watching
for more awesome, money-making tips. That means they have to explain
how you can do things that will make you money. And that means there
have to be broad and obvious ways to make money. And more than that,
it has to seem like the folks on the teevee know how to make that money.
But they don't.
CXO Advisory Group tracked Jim Cramer's picks for awhile and concluded
"Based on subsequent stock market performance and our judgments about
his forecasts for overall stock market direction, Jim Cramer is right
about 46% of the time with his stock market predictions, a little below
average." Stunning performance. Meanwhile,
anyone who has ever read Larry Kudlow wonders how he's able to manage
a folding chair without assistance, much less other people's money.
Well, hopefully he and the Treasury secretary don't do something
stupid like go before the Congress and say "oh my god! the sky is falling
- if y'all don't give us $700 billion to throw around by Friday the
economy's going to collapse!" That would really scare ordinary people,
cause them to completely stop buying things like cars and such and hoard
their cash. Oh wait, that was 2008.
Some measure of
normalcy will hold out until late spring or early summer, mostly based
on hopes for the Obama Presidency. But by
late summer 2009, the aggregate loss of jobs, credit and wealth will
cause an economic crisis that makes our current situation look pretty
mild. With predictions of up to a million jobs lost each
month, there will simply come a point at which the economy as we understand
it now cannot function - we will see the modern equivalents of breadlines
and stockbrokers selling apples on the streets.
(Editor's Note: Given that she nailed most of
her 2008 predictions, Sharon Astyk's 2009 prognostications are worth
paying attention to. - JSB)
A lot of people now would approve braking banksters legs as a compensation
for the financial losses they suffered ; -). They problem is that there
are not enough legs... Mr. Bernard Madoff has just two...
How to solve the moral hazard problem involved in body swapping:
The Bible Meets Science Fiction: A Solution to the Principal-Agent
Problem, Suggested by Lawrence H. Officer, JPE Back Cover, vol.
110, no. 1: “Next, you and the Martian Gentleman will both sign
a Reciprocal Damage Clause. This states that any damage to your
host body, whether by omission or commission, and including Acts
of God, will, one, be recompensed at the rate established by interstellar
convention, and, two, that such damage will be visited reciprocally
upon your own body in accordance with the lex talionis.”
“Huh?” Marvin said.
“Eye for eye, tooth for tooth,”
Mr. Blanders explained. “It's really quite simple enough. Suppose
you, in the Martian corpus, break a leg on the last day of Occupancy.
You suffer the pain, to be sure, but not the subsequent inconvenience,
which you avoid by returning to your own undamaged body. But this
is not equitable. Why should you escape the consequences of your
own accident? Why should someone else suffer those consequences
for you? So, in the interests of justice, interstellar law requires
that, upon reoccupying your own body, your own leg be broken in
as scientific and painless a manner as possible.”
“Even if the first broken leg
was an accident?”
“Especially if it were
an accident. We have found that the Reciprocal Damage Clause has
cut down the number of such accidents quite considerably.” [Robert
Sheckley, Mindswap (New York: Dell, 1966), p. 17.]
Instead of borrowing somebody's body,
Wall Street borrows their money. But when they do the equivalent of
breaking your leg - when they damage the deposits they are holding -
they don't always suffer any consequences. In fact, many of them get
to keep the large bonuses they earned for managing the money so poorly,
e.g. see Krugman's latest
column. A broken leg clause is a bit on the thuggish side, of course,
financial penalties are more acceptable, but this does make clear the
need for money managers to "feel your pain" in order to get the incentives
correct.
We all know that for the last 4 years well known and well paid captains
of financial industry as well as most regulators and economists behaved
like narcissistic idiots they were ( "useful idiots" in Wall Street
terminology). But Krugman suggests that this just an example of a broader
trend: money are opium for the sound judgment. That means that we need to
keep our friends in high places pretty lean... Let's start with professors
of economics ;-)
This morning that meant a stream of thoughts triggered by Paul Krugman’s
most
recent op-ed, particularly this:
Most of all, the vast riches being earned — or maybe that should
be “earned” — in our bloated financial
industry undermined our sense of reality and degraded our judgment.
Think of the way almost everyone important missed the warning
signs of an impending crisis. How was that possible? How, for example,
could Alan Greenspan have declared, just a few years ago, that “the
financial system as a whole has become more resilient” — thanks
to derivatives, no less? The answer, I believe,
is that there’s an innate tendency on the part of even the elite
to idolize men who are making a lot of money, and assume that they
know what they’re doing.
[Dec 21, 2008]
No end
to financial disorder By Hossein Askari and Noureddine
Krichene
However, since Bernanke is only printing money out of thin air to
buy financial paper, his action is tantamount to shoplifting. The shoplifter
walks away with stolen goods. The shop owner, realizing part of his
merchandise has disappeared, has no choice except to hike the price
of the remaining goods. Call it inflation.
... ... ...
Like other economies in the past, the US economy will most likely
settle in stagflation equilibrium for the future, with no prospects
for ending the current fiscal and monetary expansion.
Looks like Bernard Madoff performed a useful social function that Bushevisks
were afraid to assume... How about a reward for the man who single-handedly
made a mortal blow to so many hedge funds...
Now that the whole horrible truth has come to light, I have no more
reason to conceal my true identity. I am Bernard Madoff.
Well, not really. But I wish I were. Few Americans have done more to
punish stupidity, pretension and complacency than Madoff, whose apparent
US$50 billion swindle calls to mind the caper by Mephistopheles in the
second part of Goethe's Faust. The fictional devil persuaded
the emperor to issue paper money against buried treasured yet to be
discovered.
The Fed should launch a Bottom-Fishers Loan Facility. Administration
would be outsourced to firms with retail brokerage operations. Every
household would be eligible for a loan of up to $100,000, with investments
restricted to US securities, mutual funds, and ETFs (except the "inverse"
or short ETFs, and ones that play in currencies or commodities). The
exact amount is determined by a score that looks at age, how underwater
your investment portfolio is, and your FICO (being older, having significant
investment losses, and FICOs that are low but short of simply dreadful
are viewed favorably). If the Fed really wanted to encourage this sort
of activity, it could also forgive the loans for the borrowers who achieved
the top 1% performance among all program participants.
December 19, 2008
One man's story about how he avoided the pain and misery associated
with the bursting of the housing bubble, from
The Onion.
Read more...
"Oh well, whatever, it's fun to take pot shots at doofus on his way
out the door - and don't come back"
From comments:
Angry Bearsent by David
Zetland
The Bailout Explained
Young Chuck in Montana bought a horse from a farmer for $100.
The farmer agreed to deliver the horse the next day.
The next day he drove up and said, "Sorry son, but I have some bad news,
the horse died." Chuck replied, "Well, then just give me my money back."
The farmer said, "Can"t do that. I went and spent it already"
Chuck said, "Ok, then, just bring me the dead horse." The farmer asked,
"What ya gonna do with him? Chuck said, "I"m going to raffle him off."
The farmer said, "You can"t raffle off a dead horse!" Chuck said, "Sure
I can, Watch me.
I just won"t tell any body he's dead." A month later, the farmer met
up with Chuck and asked, "What happened with that dead horse?" Chuck
said, "I raffled him off. I sold 500 tickets at two dollars a piece
and made a profit of $998."
The farmer said, "Didn"t anyone complain?" Chuck said, "Just the guy
who won. So I gave him his two dollars back."
Chuck grew up and works now for the government. He was the one who figured
out how to "bail us out".
... having Pitt as SEC chief was like putting
Osama bin Laden in charge of Homeland Security.
Bouncing around trading desks:
Credit Suisse Group AG’s investment bank has found a new way
to reduce the risk of losses from about $5 billion of its most illiquid
loans and bonds: using them to pay employees’ year-end bonuses.
The bank will use leveraged loans and commercial mortgage- backed
debt, some of the securities blamed for generating the worst financial
crisis since the Great Depression, to fund executive compensation
packages, people familiar with the matter said. The new policy applies
only to managing directors and directors, the two most senior ranks
at the Zurich-based company, according to a memo sent to employees
today.
“While the solution we have come up with may not be ideal for
everyone, we believe it strikes the appropriate balance among the
interests of our employees, shareholders and regulators and helps
position us well for 2009,” Chief Executive Officer Brady Dougan
and Paul Calello, CEO of the investment bank, said in the memo.
The securities will be placed into a so-called Partner Asset
Facility, and affected employees at the bank, Switzerland’s second
biggest, will be given stakes in the facility as part of their pay.
Bonuses will take the first hit should the securities decline further
in value.
“It’s monstrously clever,” said Dirk Hoffman-Becking, an analyst
at Sanford C. Bernstein Ltd. in London who has a “market perform”
rating on Credit Suisse stock. “From a shareholders’ perspective
it’s great because you’ve got rid of some of the assets and regulators
will be pleased because you’ve organized a risk transfer.”
Bankers are called banksters not without the reason:
... the relationship between government and banking is the closest
thing to organized crime taken over society...
Bloomberg.com
“With the right hand out begging for bailout money, the left is hiding
it offshore.”
US President George W. Bush said in an interview Tuesday he was forced
to sacrifice free market principles to save the economy from “collapse.”
“I’ve abandoned free-market principles to save the free-market system,”
Bush told CNN television, saying he had made the decision “to make sure
the economy doesn’t collapse.”
You too now can get a piece of the TARP! Bankrupt bank doles $100
to any taker. This sounds like in French saying: “The state, a fiction by
which everybody seeks to live at the expense of everybody else" —
Bastiat
12/16/2008
WaMu is offering $100 when you open a checking account. (hat tip
John)
Note: John removed the promo code.
You too can get a piece of the TARP! This is better than a toaster
...
It's "laissez-faire rulez" mentality until you get in deep sheet ;-).
It’s not just WTF is gonna happen today ?
It’s WTF is gonna happen tomorrow, day after tomorrow! WTF is going
to happen in the long run !!
Artur Levitt, Chairman emeritus of the SEC, was "astonished" that
his close friend and confidante was the world's greatest con man. Kinda
says it all.
[Dec 15, 2008]
New Fed
A nationwide chain of pawn shops has opened to take advantage of
a business opportunity created by this severe recession. They're called
Federal Reserve Banks.
December 6, 2008 | by WcP Blog - World Culture Pictorial
CEO -- Chief Embezzlement Officer.
CFO -- Corporate Fraud Officer.
BULL MARKET -- A random market movement causing an investor
to mistake himself for a financial genius.
VALUE INVESTING -- The art of buying low and selling
lower.
P/E RATIO -- The percentage of investors wetting
their pants as the market keeps crashing.
... ... ...
Like the old joke goes, "We're from the government, and we're here
to help you", which explicitly means that you will soon suffer, as we
learn from Bloomberg.com; "The U.S. may pay a steep price to free itself
of its economic and financial travails: bigger government, faster inflation
and a poorer country." Gaahhhh!
To relieve the tension, I made up a new joke.
A guy walks into a bar and the place is full of beautiful young ladies.
They say, "Mogambo! We love you and you make us so hot! Let's celebrate
with some of your hot monkey love!" And the guy says to the bartender,
"I have some good news and some bad news! The U.S. may pay a steep price
to free itself of its economic and financial travails: bigger government,
faster inflation and a poorer country."
The bartender says, "My God! That's the price?
What's the good news?", and the stranger says, "That IS the good news!"
[Dec 15, 2008] New Wall Street advertisement
Nobody sells stocks for less
[Dec 15, 2008] Bush & Iran sanction
"There's now speculation in Washington that President Bush is now
planning to increase the economic sanctions on Iraq. And let me tell
you if they are half as tough as the economic sanctions Bush has imposed
on this country, they are screwed." —Jay Leno
And this is not the first time. "If it walks like a duck and quacks
like a duck, it must be a duck."
Angry Bear
Robert Waldmann
According to
Ezra Klein (who is very gentle in his criticisms) Summers wrote
the following
As for [Milton] Friedman -- I'm not so sure he looks bad. What is
most screwed up today? GSEs, Citibank, regional banks. What is most
regulated? Same list. What is least screwed up? Hedge funds and
the like. What is least regulated?
Summers didn't mention investment banks or non bank mortgage companies.
Many of Them are not currently "screwed up" mainly because they no longer
exist.
I mean he just overlooked the little problems
at Lehman Brothers and Countrywide.
The argument about hedge funds is totally invalid. Look, I'm not regulated
at all and I'm not bankrupt. Most individuals are in less financial
distress than say citibank. The reason isn't that individuals are not
subject to regulation -- it is that banks often have enough sense not
to loan too much to individuals (notice I am just talking relative --
most people aren't in bankruptcy court and no individual has been bailed
out yet).
The government doesn't have to regulate us, because relatively few potential
creditors trust us.
long rant after the jump
update: On non bank mortgage companies look at
the mortgage lender implodometer
From comments:
Econbrowser
One of my friends proposed the following cartoon to the WSJ but was
rejected. I thought it was priceless.
I proposed to have Greenspan, Bernanke and Paulson all dressed
in camouflage and hunter's hats, carrying Bazookas walking into an Adirondack
style lodge where you can see trophies on the wall...
a Mexican...labeled 'Peso Crises'
a 'Tojo' looking Japanese… labeled 'Lost Decade'
an Indonesian Islander… labeled 'Asian Financial Crises'
a Factory Worker with hard hat… labeled, 'Manufacturing Collapse'
a housewife with a shopping bag… labeled, 'Inflation Kills the Middle
Class’
a computer geek… labeled 'Dot.Com Collapse’
a mortgage broker… labeled ‘Housing Collapse’
an investment banker labeled…'Wall Street collapse’
an auto worker, labeled…'Main Street Collapse'
and another trophy on the table not yet hung…labeled 'Dollar Collapse.'
Paulson says to Greenspan, "My Alan this is veryy impressive!"
Greenspan replies, "To tell you the truth Hank, I hit them all by
accident. I was out interest rate targeting and no-one told me that
I had the Bazooka pointed backwards!"
FT.com
In his spare time, London developer Nick Herrtage plays drums with
a pop group called What Next!
Given the rocky nature of the property market, it’s a fitting name.
How those sex workers could see it coming if they all were busy performing
oral sex with City banksters. See
Marginal Revolution: The Wisdom of Whores
Asia Times
Well, I should have known that this was not her real question, and
it wasn't, but "Her Majesty Queen Elizabeth II this month asked a simple
but fundamental question posed by many millions of Americans and people
around the world. Visiting the London School of
Economics, the queen asked why it was, if the looming
economic crisis was so large, that no one saw it coming."
If I had been there, you can bet your sweet butt that I would have
said, "Hey, Queenie! I saw it coming, and everybody who is even passingly
familiar with the Austrian school of economics saw it coming, and everybody
with any familiarity with math or history saw it coming, too, and in
fact the only people who did NOT see it coming were lowlife poseurs
like these London School of Economics halfwits and most university professors
of economics around the world, all of whom share an economic theory
made of some bizarre mishmash of unbounded equations based on neo-Keynesian
gibberish! Hahaha!"
Asia Times
I couldn't help but think about the old California joke about lawyers;
in the weeks following the meeting when we have seen precipitate action
by all of these bankers as well as their masters in respective governments;
the joke was repeated endlessly in my head. So here it is, albeit paraphrasing
the question to: "What would you call an accident that makes all G-20
central bankers sink to the bottom of the sea?" Chan Akya: "A good start."
Just to be clear, I do not wish physical ill on any of these befuddled
academics stumbling their way around the global economy like a resurrected
Titanosaur walking around New York as changes in the magnetic field
upset the migratory pattern embedded in its pea-sized brain. Despite
not wishing them physical harm, there is a part of me that wants to
grab them by the collective scruff of their necks and ask them a simple
question: "Are you guys completely out of your minds?"
some people never learn, that is why we have guillotines..
[Dec 12, 2008] Proposal for a name of merged GM + Ford + Chrysler company
after the bailout
Congressional motors (CM)
I think we know where the banks are parking all that TARP money
... by economists at least. FDR was an experimenter who understood
the need for institutional innovation during uncertain times.
Here is what he
said in May 1932:
The country needs and, unless I mistake its temper, the country
demands bold, persistent experimentation. It is common sense to
take a method and try it: If it fails, admit it frankly and try
another. But above all, try something. The millions who are in want
will not stand by silently forever while the things to satisfy their
needs are within easy reach.
Repeat after me: "bold, persistent experimentation."
The question for the members of Obama's old-new economic team is
whether they will remain true to their fundamentally conservative instincts,
or engage in the creative experimentation for which their ample talents
render them highly suitable.
Losing. now show.
The reason is that the Bureau of Labor Statistics (BLS) imputes jobs
into its survey for new firms that could not included in its sample.
This imputation is based on its "birth/death" model which is inevitably
backward looking. As a result, it misses turning points, underestimating
job growth when the economy speeds up and overestimating job growth
(or underestimating job loss) when the economy slows.
The BLS imputed 143,000 jobs into the establishment data over the
last three months based on its birth/death model. In the three months
from September to November of last year BLS imputed just 117,000 jobs
into the establishment data.
It is inconceivable that job growth in new firms over the last three
months was larger this year than in the same months of 2007. When BLS
revises these data based next summer based on data from unemployment
insurance records, it is virtually certain that November will show even
more job loss than was reported today.
In short, as bad as the picture looks now, the reality is almost
certainly worse. (Btw, reporters who cover the employment data should
know about the birth/death imputations.)
--Dean Baker
U.S. companies were locked out of the junk-bond market in November,
putting half of American corporations at risk of being unable to raise
cash.The current environment is causing market participants to harken
back to 1991, when the collapse of Drexel Burnham Lambert sent the junk,
or high-yield, bond market into a tailspin.
About 50% of U.S. companies have
below-investment-grade credit ratings, making the
$750 billion junk-bond market a vital source of financing for car makers,
airlines, retailers, utilities, restaurant chains and media companies
Global OutlookGlobal economic prospects have deteriorated
sharply in recent months, as the financial crisis has spread and increasingly
engulfed emerging economies. In the advanced economies, consumer and
business confidence have dropped to levels not seen in decades, and
activity is slowing sharply or contracting. Most worrisome has been
the sudden-and severe-toll that the crisis has begun to take on emerging
economies; in many cases, deleveraging and asset sales have led to capital
flow reversals, a sharp widening of spreads on sovereign and corporate
debt, and abrupt currency depreciations.
- In November, the IMF revised down its forecast for global growth,
less than a month after the publication of its October World
Economic Outlook. Based on current policies, the world economy
is projected to grow by 2¼ percent in 2009, down from about 5 percent
in 2007, before picking up in 2010. The major advanced economies
are in recession, and activity is expected to contract by ¼ percent
on an annual basis in 2009, marking the first annual contraction
in the post-war period for this group of countries.
- Activity in emerging economies is also slowing abruptly. While
growth in these economies is still projected to be around 5 percent
in 2009, led by emerging Asia, recent developments underscore that
many of these economies face very difficult times as they adjust
to a deteriorating global environment.
- Unfortunately, even this newly reduced forecast cannot be taken
for granted, as downside risks remain significant. The IMF will
publish its quarterly World Economic Outlook update in January;
based on recent developments, it seems likely that we will further
mark down our forecasts for global growth, while maintaining our
assessment that a hoped-for stabilization of financial conditions
and increased policy support should enable a gradual recovery to
begin before the end of 2009.
On the positive side, headline inflation is receding rapidly across
advanced and most emerging economies. This has opened additional room
for monetary policy easing.
Against this background, policy makers have three broad tasks ahead:
- Bolstering domestic demand.
- Dealing with the immediate fallout of the financial crisis,
including the adoption and coordination of policy responses to underpin
confidence and restore financial sector soundness.
- Designing and implementing reforms that would decrease the risk
of such crises in the future.
More humor is definitely a "good thing" in such a situation...
Robert Reich's Blog
On Monday, NBC Universal chief executive Jeff Zucker told weary investors
at an industry conference that the network was determined to cut costs.
His comments came as the company laid off 500 employees and announced
it would move Jay Leno to its 10 pm weekday time slot. This makes sense
for NBC: Every hour of scripted programming costs about $5 million --
for fleets of writers, directors, cinematographers, actors, editors,
and everyone in between. Leno's compensation is hefty but not nearly
$5 million an hour, and his live show costs a fraction of that. (Big-name
stars come to hawk their latest films and books for free.)...
Comments
-
Nicholas said...
- Maybe he is also contributing to
less garbage news! Not having a television, it does
not matter. But, the less uninformative or incorrectly informative
news the better.
This is one of the funniest political cartoons. Each frame is excellent...
Hat tip to Mark Thoma. Looks like "The Invisible Hand is giving us The Finger".
Some well-known Vietnam draft-dodgers became much more patriotic than anybody
else; the same is true for free market fundamentalists...
Salon
click on picture
...Conventional wisdom is that the bottom is reached when the last
bull becomes a bear. In other words, when capitulation is complete.
Only then can recovery begin. For those who prefer a more off-beat approach,
here are 10 other possible indicators.
- Investment bankers' children stop lying about what Daddy does.
- Chocolate biscuits are again acceptable at directors' meetings.
- Our worst universities are full for MBA courses.
- Roman Abramovich abandons Chelsea.
- The cost of keeping a boy at Eton falls below the average wage.
- A celebrity chef is paid to endorse McDonald's.
- The number of houses being repossessed in a year is greater
than the number being built.
- Royal Ascot accepts sponsors for its races.
- A well-known charity goes bust.
- Gordon Brown says: "I've had enough of this".
It was the unique genius of Woody Allen that turned Dr David Reuben's
daring (for the time, anyway) 1969 question-and-answer book, Everything
You Always Wanted to Know About Sex (but were afraid to ask) into
a 1972 skit comedy film. To illustrate the book's inquiry "Why
do some women have trouble reaching orgasm?", Allen presents the story
of a modern Italian couple, Fabrizio (played by Allen) and Gina (played
by Allen's real-life former paramour, Louise Lasser).
In response to Fabrizio describing to a worldly friend Gina's aforementioned
problem, Fabrizio is advised that perhaps what Gina needs is the spark
of danger, of risk, in their lovemaking. The pair start cautiously,
making love in a friend's house, but before long they are locked in
erotic embrace in a restaurant, even in front of a church. Fabrizio
is pleased that he has solved the couple's problem, but he worries.
He realizes that it is getting harder and harder, that he is having
to subject himself and Gina to more and more risk, in order to create
a satisfactory conclusion. What must he do next?
Lately, the US stock market is proving equally as hard to please as
Gina. ...Much like Gina, it seems the government
is being called to engage in ever-more vigorous and extensive endeavors
to stimulate the stock market.
Moody's and Standard & Poor's - the agencies that ... sold their
souls to the devil for revenues.
November, 2008 (Bloomberg) -- The Somali pirates, renegade Somalis
known for hijacking ships for ransom in the Gulf of Aden, are negotiating
a purchase of Citigroup.
The pirates would buy Citigroup with new debt and their existing
cash stockpiles, earned from hijacking numerous ships, including most
recently a $100 million Saudi Arabian oil tanker. The Somali pirates
are offering up to $0.10 per share for Citigroup, pirate spokesman Sugule
Ali said earlier today. The negotiations have entered the final
stage, Ali said. ”You may not like our price, but we are not in
the business of paying for things. Be happy we are in the mood
to offer the shareholders anything,” said Ali.
The pirates will finance part of the purchase by selling new Pirate
Ransom Backed Securities. The PRBS’s are backed by the cash flows
from future ransom payments from hijackings in the Gulf of Aden.
Moody’s and S&P have already issued a AAA investment grade rating for
the PRBS’s.
Head pirate, Ubu Kalid Shandu, said “We need a bank so that we have
a place to keep all of our ransom money. Thankfully, the dislocations
in the capital markets have allowed us to purchase Citigroup at an attractive
valuation and to take advantage of TARP capital to grow the business
even faster.”
Shandu added, “We don’t call ourselves pirates. We are coast
guards and this will just allow us to guard our coasts better.”
It appears that Monday's stock market decline could have easily been
avoided (it looks as though the feud with Kanye West is heating up too).
2008 Credit Crisis Bailout: a mountain give birth to a mouse...
Prior Bailouts as a % of US GDP
via
mindtangle (note that this data is already old!)
Pretty acerbic summary of Obama's economic appointments as appointment
of the “Yeltsin” team who sponsored Russia’s privatization mess in the mid-1990s
– Larry Summers and other Robert Rubin protégés. Summers-related paragraph
is hilarious:
Summers went so far as to write in an internal note:
The under-populated countries of Africa
are largely under-polluted. Their air quality is unnecessarily good
compared to Los Angeles or Mexico (...) There needs
to be greater migration of pollutant industries towards the least developed
countries (...) and greater concern about a factor increasing the risk
of prostate cancer in a country where people live long enough to get
the disease, than in a country where 200 children per thousand die before
the age of five. He even adds, still in 1991: There are no limits on
the planet's capacity for absorption likely to hold us back in the foreseeable
future. The danger of an apocalypse due to global warming or anything
else is non-existent. The idea that the world is heading into the abyss
is profoundly wrong. The idea that we should place limits on growth
because of natural limitations is a serious error; indeed, the social
cost of such an error would be enormous if ever it were to be acted
upon.
Are banks necessary in this scenario or are
they merely leeches?
These financial bailouts are ostensibly justified so that the banks
will "lend again", except of course that they're not lending, rather
they are hoarding the money. Presumably the idea is that, eventually,
the banks will have enough money to feel safe enough to start lending.
What no one doing the bailing cares to mention is that money provided
by taxpayers is shoveled en masse to banks so they can, one day, lend
that money back out to taxpayers at interest. This doesn't make sense.
Taxpayers pay the government, the government pays the banks, the banks
cream off their salaries and perks and bonuses and operating costs and
everything else, and then lend back to the taxpayers?
Are banks necessary in this scenario or are they merely leeches?
It looks like Marxist orthodoxy which considered "bourgeoisie journalists"
as special kind of prostitutes might not be completely off mark in case
of financial journalism...
December 3 2008 09:26 | FT.com
As the search for scapegoats for five years of bad banking intensifies
– even the Queen wants to know why no one saw the credit crunch coming
– it was inevitable that financial journalists would be dragged into
the stocks. With a Treasury select committee deliberating whether to
impose reporting restrictions during banking crises, the risk of regulatory
creep is rising. It is a sign of the times that Richard Lambert, director-general
of the CBI, an employers’ body, has slammed the Press Complaints Commission,
a self-regulatory body, for failing to ram home the “special responsibilities”
on business journalists in such time
December 3 2008 | FT.com
The problem with lynch mobs is that they sometimes get the wrong
guys. It must have been great fun back in the Old West, stringing up
some ornery hombres you suspected of cattle rustling. Until you found
out that they had been drunk as skunks in Madame Fifi’s saloon on the
night in question, and were therefore innocent.
I mention this in reference to ... retail
bankers, who are in a position similar to the alleged cow stealers of
yore.
From Tom Tolles at the
Washington Post:
From comments
- esb said...
- FORBES once called itself "The Capitalist
Tool" and may still do so.
I submit that the WSJ should begin
calling itself "The Sell Side Shill,"
unless BARRONS has already reserved it.
[Dec 1, 2008] Galbright
style quote ;-)
Hat tip to Barry Ritholtz
An economist is an expert who will know tomorrow why the things he
predicted yesterday didn't happen today. —Laurence J. Peter (1919 -
1988)
That's priceless: "Mr. Rubin said his pay was justified and that there
were higher-paying opportunities available to him. " Yes, as
Yves noted,
he probably could make a lot more money (and a lot less damage
to the economy) dealing drugs, or better yet, providing financing to terrorists
;-). And the main difference between Greenspan and Rubin is probably that
Greenspan is too old to go to jail... As
The Big Picture noted: "...
his defense of Greenspan is, in my opinion, the work of a guilty conscious.
He and Greenie both supported, and even pushed for: repeal of Glass Steagall,
exempting of Derivatives from Regulation, encouraging Citi to take on more
leverage in 2004, ultra-low interest rates during, and after the 2001 recession"
Rubin
refuses to take an iota of responsibility for the bank's tsuris
(and that also comes from the Goldman playbook. The firm always circles
the wagons and admits nothing). Get a load of this:
Robert Rubin said its problems were due to the buckling financial
system, not its own mistakes, and that
his role was peripheral to the bank's main operations even though
he was one of its highest-paid officials."Nobody
was prepared for this," Mr. Rubin said in an interview.
He cited former Federal Reserve Chairman
Alan Greenspan as another example of someone whose reputation has
been unfairly damaged by the crisis.
In case of broken links
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us about new location
Corporate Scandal Jokes - Corporate Fraud Late-Night Jokes
Financial Fashionista How To Get Fired At Your Holiday Party For A Better
New Year (a-k-a You Can Take This Job and Shove It)
please note that stories are of very uneven quality. Some are
really good...
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Last modified:
January 05, 2009
You know Doc, you're over-analyzing again. I see only reflexive responses by the sedate, possibly unconscious Mr. Bush.
I believe you own a dog, and likely (as with most dog owners) you've engaged in long, deliberative criticism and conversation with the beast over its habits.
When it barks, do you attribute the sound to a reasonable, rational response? Or does the dog toss you the same answer every time? Does the dog really care?