Citi and To big to bailout

http://www.portfolio.com/views/blogs/market-movers/2008/11/13/citis-desperate-straits

With so many bad things to choose from, this would clearly be very bad. If the government had to step in now it would take $1T dollars to fix it. Let me repeat that $1T. We now a company too big to bailout. The ship is sinking the only question is who is the last one off the ship.

Russia and S&P

http://www.themoscowtimes.com/article/600/42/372357.htm

Lots of weirdness in russia these days.

Sometimes they just nail it.

http://www.minyanville.com/articles/dollar-Paulson-acrimony-crude-drys-spx/index/a/19963

I love to read a post which just nails the current feelings. SP840 is looking to not hold, the march to 600 is underway if we close were we are right now.

War with IRAN and why it might end badly

http://www.theatlantic.com/doc/200810u/kaplan-iran-war
Scary stuff, Hopefully our leaders do not choose this path.

GE

http://www.reuters.com/article/ousiv/idUSTRE4AC0JJ20081113
The FDIC is bailing out GE for 147B. Two question, when did GE pay into FIDC? Never.
Why did they not use TARP? Out of money already? Does not want to talk to congress again?

Soros

http://www.reuters.com/article/ousiv/idUSTRE4AC5IN20081113
Some great commentss from George Soros.

Japan ponies up 100B for the IMF

http://www.cnbc.com/id/27690477
No one is impressed. Another drop in the wave which is engulfing everyone.
Topping that off with China now in recession (and those are the government numbers) along the USA and UK in deep trouble. The wave can not be stopped now, the only question now is where to take shelter and what the world will look like on the back side.

Chicago -Big Problems ahead

http://www.suntimes.com/news/politics/1275442,CEO-daley-layoffs-chicago-economy-budget-111208.article

“Huge layoffs are coming in November and December. And next year, there’s going to be [even more] huge layoffs. All the corporation CEOs have come in to tell me. That’s just the beginning. It’s not their end result,”

Poland joins the list

http://ftalphaville.ft.com/blog/2008/11/13/18197/the-big-le-borrow-ski/

In further signs of an event that has never happen, the global recession is gathering steam

Ben "The Printer"

http://ftalphaville.ft.com/blog/2008/11/13/18207/prsh-dum-prsh-dum-prsh-dum/

In an uncannily prescient speech in 2002 (Deflation: Making Sure It Doesn’t Happen Here), he laid out a detailed plan for avoiding deflation in a western economy. This involved printing money to bail out failing banks, and buying troubled assets such as mortgage-backed securities. If necessary (and we are not quite there yet, in my opinion), he advocates printing more money to finance an increase in the budget deficit and pay directly for tax cuts. That man was Ben Bernanke, now the chairman of the US Federal Reserve. Read his speech on the Fed’s website. So far, about two-thirds of the plan has been implemented, and he clearly stands ready to complete the job if needed.

In Short Ben thinks that hyper Inflation is the last stop. If this happens you can you look at the USA to be the next Iceland.


http://ftalphaville.ft.com/blog/2008/11/10/18038/the-unthinkable-has-happened/

http://www.telegraph.co.uk/finance/financetopics/recession/3446686/Ken-Clarke-warns-Britain-is-on-the-brink-of-meltdown.html
"We still have a major, major crisis in this country and... public finances are in a terrible mess".

Mr Clarke, 68, said the British economy is headed for a "catastrophic crisis" that will be "far worse than anything that has occurred in my lifetime".

In short it will be worse then we all think.

Intel

http://www.bloomberg.com/apps/news?pid=20601087&sid=a8duq1YbR2j8&refer=home
Sign of more bad news. With the continued credit problems the contigan is spreading very quickly. Looking for a crash before the end of the year. DJI 5300 SP 600.
4Q numbers will be across the board bad.

Orders dried up amid customers’ inability to get credit to finance technology purchases.

http://www.prudentbear.com/index.php/commentary/featuredcommentary?art_id=10136

Within the financial sector, de-leveraging is well advanced. In the real economy it is in the early stages.

I would say under way but not yet peaked from the financial sector.

Ultimately, "all the king’s horses and king’s men" cannot prevent the de-leveraging of the financial system under way. The extent of de-leveraging is substantial and likely to take time. In recent years, money was cheap and other assets were expensive. As each of the global economy’s credit creation engines breaks down and systemic leverage reduces, money becomes scarce and more expensive triggering substantial adjustments in asset prices in a reversal of the process.

Things will become very cheap. If you have any money left

David Roche of Independent Strategy, a consulting firm, estimates that $4 to $5 of debt is now required to generate $1 of economic growth. As credit creation slows and debt levels fall, the sustainable level of global economic growth may fall as well.

Of interest to this thought is the difference between $4 available then and what will be available in the future. I would guess it will be a long time before growth is seen

too much common sense

http://www.moneyweek.com/news-and-charts/economics/have-we-reached-a-minsky-moment.aspx
For economics

Duh, losses may be above 1.4T

http://www.cnbc.com/id/27680391
Of couse they will be, the treasuiry already has loaned out almost $2 trillion with no signs of improvment. Huge amounts of loss have not been taken. Just look at the Level 3 assest still polluting the banks. Citi has $1T by itself!

Canada

http://www.thestar.com/News/Canada/article/535392
Nothing to see here. Canada is fine.

Humor

http://www.washingtonpost.com/wp-srv/opinions/cartoonsandvideos/telnaes/telnaes11122008.html

Mexico

http://climateerinvest.blogspot.com/2008/02/billionaire-carlos-slim-calls-for.html

http://www.economist.com/countries/Mexico/

After a very interesting discussion with some about what Carlos Slim is doing and saying, I went back and looked for english translation of his 2008 moves. While not very open about what he is doing, it is somewhat clear that he is proposing huge infrastructure. The main question is why? In short Jobs. Without massive job dislocation occuring he wants to try to protect his companies which need the consumer to have money for phones for example. He knows the economy is in trouble. The only question now is how bad will it be and can the government create enough projects to keep unemployment under control.

Swiss in trouble?

http://ftalphaville.ft.com/blog/2008/11/12/18122/spot-of-swiss/
Say it aint so. UBS dead man walking. CS dead man walking. I can not see Obama trying to save UBS, just to much political problems. Regardless of the fact that a collapse of UBS would have huge collartral damage. Yet another wave the will crest soon.

Google going down below $300

http://www.247wallst.com/2008/11/could-google-go.html

I am betting it will go below $200. We have underestimated how bad things are going to be.

I own puts on Google.

Bid-to-cover

http://www.federalreserve.gov/newsevents/press/monetary/20081112a.htm

Whoops ,Bid-to-cover at 8%. Guess no one is buying.

PBS show on the crash

Brokers Believe Worst Is Over and Recommend Buying of Real Bargains

Wall Street in looking over the wreckage of the week, has come generally to the opinion that high grade investment issues can be bought now, without fear of a drastic decline. There is some difference of opinion as to whether not the correction must go further, but everyone realizes that the worst is over, and that there are bargains for those who are willing to buy conservatively and live through the immediate irregularity.

-- New York Herald Tribune, October 27, 1929

Written two days before the crash of 1929, had you bought then you would have broken even in the 50's

http://www.pbs.org/wgbh/amex/crash/index.html

PBS is doing a show on the great crash, looks very interesting.

more pain for the banks

http://moneynews.newsmax.com/streettalk/bank_bailouts/2008/11/11/150151.html

The Wall Street as we know it is dead. What will be left is the only question.

People leave there cars

http://www.belfasttelegraph.co.uk/news/local-national/economic-crisis-sees-people-abandon-luxury-cars-at-dublin-airport-14052806.html

We people start to give up on there property you can be sure things are going arye.

World Bank 100B

He cited the Philippines, Vietnam and sub-Saharan countries as being on the brink, while noting that petrol producers such as Venezuela and Mexico were suffering from the fall in oil prices.

More names on the list. With OIL pushing below $60 look for more Oil producing companies to be in trouble.

http://www.ft.com/cms/s/0/11392968-b026-11dd-a795-0000779fd18c.html

From 24/7

http://www.247wallst.com/2008/11/china-cant-outr.html#more

3% would a depression for China, 6% would be a recession.

How will china finance its bailout

http://ftalphaville.ft.com/blog/2008/11/11/18088/all-the-treasuries-in-china/
Any sign that China is slowing or selling treasuires will provoke chaos in the markets.

Awesome post

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?tid=true#

Nothing really new, but a great read

WSJ Speculators, Politicians and Financial Disasters

http://online.wsj.com/article/SB122626062814011765.html?mod=googlenews_wsj
Excellent post, you should read it ASAP

They just don't get it

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3408142/Financial-crisis-The-banks-just-dont-get-it--theyre-lucky-to-be-alive.html
Clearly they dont get it. They made the deal with the devil and he will get his due.

FT on Freddie

http://ftalphaville.ft.com/blog/2008/11/10/18047/fannie-mae-to-paulson-please-sir-may-i-have-some-more/
Yeah, there is no end to this one. Cut them apart and set them free.

GD

http://online.wsj.com/article/SB122611122832410627.html
From the it never has happen, only once did a global recession hit and that was in the 1930's. The question is now where will it. I think we will see negative growth everywhere at once and we talk about this time as the worst period of any generation alive.

Ireland

“If this happens Ireland’s funding costs will soar, leaving the hapless Irish taxpayer to foot the bill through a combination of higher taxes and higher bank interest rates,”

http://www.examiner.ie/irishexaminer/pages/story.aspx-qqqg=business-qqqm=business-qqqa=business-qqqid=76976-qqqx=1.asp

Looking at the dead man walking.

How fast?

http://www.nytimes.com/2008/11/09/world/europe/09iceland.html?_r=1&oref=slogin
Real fast. This should be warning to all of us.

Sicking

http://www.nytimes.com/2008/11/11/business/economy/11fannie.html?_r=1&oref=slogin
So one needs to find the balls to break them up and cut them lose before they sink the US

AAA ratings

http://www.cnbc.com/id/27641538
The lose of the AAA rating would be earthquake to the market. I think it will happen but as usually at the rating agency expect them to be last to do it.