Twenty Comments on the Current Economic Scene

http://alephblog.com/2008/12/18/twenty-comments-on-the-current-economic-scene/

Always a pleasure to read this blog.

Chart porn of the day

https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgnTAqQTWWrTAwroY9okp4abIQls99QKmx6nw1-pRXqwONlZjk7g0A8ojbSgOP7g_SqGv5K8LUp3biv80qLbj6Dn1gZ8DQPdAEU1rInxLGTjSJdkGZ16zQH-E_-Fxv_EHDO52vdn37hdXE/s1600-h/longbond.jpg


http://jessescrossroadscafe.blogspot.com/2008/12/long-term-us-bond-and-dollar.html

Ponzi Nation: What Spitzer, Madoff, Geithner, and Adam Smith Can Teach Us About Our Own Mass Stupidity

http://www.vanityfair.com/online/politics/2008/12/spitzer-geithners-the-status-quo.html

If this keeps up I will subscribe to Vanity Fair. They just have some excellent business articles.

And so I asked Eliot Spitzer what he made of incoming Treasury Secretary Tim Geithner, and sure enough he gave a reply markedly lacking in discretion: “Tim is a good guy, but he’s not a thinker. He’s the status quo.” I asked if F.D.I.C. Chairman Sheila Bair, the Republican who is improbably the left’s favorite financial regulator right now, might have been a better choice; he wasn’t sure if she could handle “the politics” but said she had been the “voice of reason” in the whole debacle. He did not know whether reports that Geithner is behind a movement to oust Bair for not being a “team player” were true, but he said he shared my concerns that the regulatory team being assembled would not do enough to challenge the logical flaws and undemocratic principles that characterize Wall Street’s, ahem, conventional wisdom.

I know people are down on Spitzer but he did a great job looking into the problem childs of wall street. Better to be hated then loved if you are regulator.

2009 to worse than 2008

http://ftalphaville.ft.com/blog/2008/12/19/50632/the-hypothetical-downside-scenario/

Word of the Day

http://www.urbandictionary.com/define.php?term=Ponzi%20Crawl&defid=3244785

As Cali so goes the US

http://www.nytimes.com/2008/12/18/us/18calif.html

In a preview of what will be seen in other states very soon.

“We had to say we can’t spend money we don’t have,” Mr. Lockyer said.

Or raise fee's to drive more people away.

Aaron McLear, a spokesman for the governor, said the board’s move had the potential to put tens of thousands of workers in unemployment lines just a week before Christmas. Mr. Lockyer agreed, saying the private construction business — already dealing with double-digit unemployment — would be hit hard.

When the govenment can not spend we are looking at some serious damage to the country. With it taking a every large part of GDP it would a tsunmia of bad.

Credit Suisse to Use Illiquid Assets to Pay Bonuses

http://www.bloomberg.com/apps/news?pid=20601087&sid=abJOQQI18SAE&refer=home

Here is something we can not sell, good luck. Damn.

Whitney turns bearish

http://caps.fool.com/blogs/viewpost.aspx?bpid=118096&t=01000420523245711617

Congress get a pay raise

http://thehill.com/leading-the-news/with-economy-in-shambles-congress-gets-a-raise-2008-12-17.html

Just more money wasted.

Must read of the day.

http://www.minyanville.com/www.minyanville.com/articles/GS-AXP-GE-C-Fed-ms/index/a/20374

But hope is not a viable investment strategy.

Casue when hope is gone we are screwed.

Instead, what the Fed has done is push all their chips into the pot, gambling everything on one final card. Stocks are no longer being priced according to fundamentals, because they're now simply pawns in the Fed's giant credit market gamble.

Unfortunately, this reckless gesture sets the stage for a more likely negative outcome, and that's full-blown deflationary collapse and a subsequent crisis of confidence in the central bank itself.

50% chance of this occuring.

more on DB and bond markets.

http://ftalphaville.ft.com/blog/2008/12/18/50594/of-deutsche-bonds-and-conspiracies/
Important stuff.

Chart Porn of the day

http://www.calculatedriskblog.com/2008/12/four-bad-bears-update.html

CRE market at a standstill

http://www.realtor.org/press_room/news_releases/2008/commercial_real_estate_outlook_dampened?LID=RONav0021
Massive losses in CRE market will be the talk of 2009

1873 repeat?

http://www.infowars.net/articles/december2008/161208Unrest.htm

A recent report produced by the U.S. Army War College's Strategic Institute warns that the United States may experience massive civil unrest in the wake of a series of crises which it has termed "strategic shock."

The report, titled Known Unknowns: Unconventional Strategic Shocks in Defense Strategy Development, also suggests that the military may have to be used to quell domestic disorder.

Who says the army does not have intelligence. If you look at the reaction to Madoff you start to see signs of very angry people. IF GM goes, you will get a huge multiplier.


http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3526645/Citigroup-says-gold-could-rise-above-2000-next-year-as-world-unravels.html

"The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.

"Or it will not work because too much damage has already been done, and we will see continued financial deterioration, causing further economic deterioration, with the risk of a feedback loop. We don't think this is the more likely outcome, but as each week and month passes, there is a growing danger of vicious circle as confidence erodes," he said.

All of this is 'end of the world stuff' Where we go is still underdetmined.

Unintended Consequences

http://market-ticker.denninger.net/archives/692-The-Idiocy-of-Bernankes-Bubbles-and-CNBS.html

http://www.calculatedriskblog.com/2008/12/negative-yields-on-money-market-funds.html

So this is it. 3 months. In March we will know if it worked. If not we are facing ugliness. By that I mean Dow 3000 or less. Massive collapse in treasuries. Massive cuts in government spending.

How do you lose 103%

http://globaleconomicanalysis.blogspot.com/2008/12/calpers-to-report-losses-of-103-on-its.html
Just an odd math problem. If you lose a 100% you are broke. But they lost more than they started with. Wow. That is talent.

DB and the bond market

http://ftalphaville.ft.com/blog/2008/12/17/50514/deutsche-rattles-the-bond-market/

Follow up article

http://ftalphaville.ft.com/blog/2008/12/17/50520/banks-who-might-not-call/

Very weird.

Question of the day

http://www.swoopo.com/

Super bargin site or money making machine?

Why we don't need bank innovation

http://www.wilmott.com/blogs/satyajitdas/index.cfm/2008/12/15/Banking-on-Steriods

Zero

http://blogs.wsj.com/economics/2008/12/16/economists-react-who-could-ask-for-anything-more/
My person take, this news is good for a shelf like of about two weeks. Then we will see the grim retail numbers for Decmember. Welcome to histroy in the making. Either they are brilliant or will go down as the most horrible crimials in the world for selling the US to lowest bidder to save the bankers.

The other side

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_lynn&sid=aS98ereBggE8
Some thoughts about the other side of recession we are heading into.

The Coming Anarchy

http://www.theatlantic.com/doc/199402/anarchy

West Africa and much of the underdeveloped world: the withering away of central governments, the rise of tribal and regional domains, the unchecked spread of disease, and the growing pervasiveness of war

Scary. This is true anarchy and we should scared of any person who wants it. An excellent think piece.

Blame Game Madoff scandal

http://clusterstock.alleyinsider.com/2008/12/i-hate-bernie-madoff

Her strongest point is that it simply doesn't make sense to say that people who gave their money to Madoff should have done more due diligence and monitoring.

Really, so you don't care about your money. I not sure how else to interrupt a statement like that. Money has to be watched. Especial as you approach a million plus.

But most people-I’d venture to say at least 90% of us-don’t have time to manage our money or to keep tabs on the “professionals” we hire to do just that

Then you are idiots. Sorry. The truth hurts. If you don't watch your money it will be gone.

And no one deserves to be wiped out just because he's dumb or even greedy.

LOL. Yes they do. Greed does not work. Most people clearly said they where there cause the returns where great. As for being dumb, I am just speechless. Most people with this money are educated. The rules are not hard to follow. Diverisfy yourselfs. If you had done just that you would be down but not out. Sorry that is the hard truth. No magic investing. No secert sause. Just don't trust one thing.

Some awesome pics from Greece

http://www.boston.com/bigpicture/2008/12/2008_greek_riots.html
Looks like pure chaos.

Ford the way it was for the USSR

http://en.wikipedia.org/wiki/GAZ

In May 1929 the Soviet Union signed an agreement with the Ford Motor Company. Under its terms, the Soviets agreed to purchase $13 million worth of automobiles and parts, while Ford agreed to give technical assistance until 1938 to construct an integrated automobile-manufacturing plant at Nizhny Novgorod. Completed in 1932, the factory and marque was titled Gorkovsky Avtomobilny Zavod, or GAZ. GAZ's first vehicle was the medium-priced Ford Model A, sold as the GAZ- A, and a light truck, the Ford Model AA (GAZ-AA). GAZ-A production commenced in 1932 and lasted until 1936, during which time over 100,000 examples were built.

Many American engineers and skilled auto workers moved to the Soviet Union to work at GAZ. A few American workers stayed on after the plant's completion in 1932, and became victims of Stalin's Great Terror, either shot or exiled to Soviet gulags.[1] The factory's name changed when the city was renamed after Maxim Gorky. From 1935 to 1956, the official name was augmented with imeni Molotova (literally, named after Molotov).

I thougth this was great story. And it continues today with GAZ buying the stratus assembly line.

Zuckerman and Madoff

http://clusterstock.alleyinsider.com/2008/12/mort-zuckerman-id-never-heard-of-madoff
Zuckerman is worth several billion and is considered a very asute investor. Just goes to show you have to watch the pennies very carefully.

Fall of Lehman

http://money.cnn.com/2008/12/12/magazines/fortune/3days_full.fortune/index.htm?postversion=2008121500

Great read.

Fitch: Alt-A Mortgages Deteriorating More Rapidly than Expected

http://www.housingwire.com/2008/12/15/fitch-alt-a-mortgages-deteriorating-more-rapidly-than-expected
Very ugly news, we are seeing a accelerating of loses. Look for massive downgrades soon.

2009 Story, How many states go BK?

http://www.nytimes.com/2008/12/15/us/15funds.html?_r=1
More problems for the states. 23 States are in serious risk of BK in the next year.
Ugly.

Problems around the world mount

http://fistfulofeuros.net/afoe/economics-and-demography/why-we-all-need-to-keep-a-watchful-eye-on-what-is-happening-in-greece/
Greece. Just a precursor to what we will see.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a5PyWzGVCR7E&refer=home
Correa Defaults on Ecuador Bonds. A victim of low oil prices. More victims will happen.


http://www.washingtonpost.com/wp-dyn/content/article/2008/12/14/AR2008121402029.html?hpid=topnews
Argentina. Victim of the Agri boom going bust. Once again the scariest one of all. The food supply collapse was the final nail that pushed the economy off the cliff in the 30's and brought the most suffering.

Madoff madness

http://ftalphaville.ft.com/blog/2008/12/15/50424/the-madoff-o-meter/

The count so far from the banks and others funds 24 Billion.

http://ftalphaville.ft.com/blog/2008/12/15/50428/elementary-dear-sec/
Why the SEC should not be trusted.

http://seekingalpha.com/article/110643-the-noble-lie?source=headline1

all finance is a confidence game

http://www.bloomberg.com/apps/news?pid=20601087&sid=aKgINkd9m988&refer=home
Sorry I don't think you run a $50 Billion con without help.

http://ml-implode.com/viewnews/2008-09-11_BanksWhereTheMoneysNot.html
Is you bank a ponzi scheme wainting to collapase?

Ireland near brink

http://ftalphaville.ft.com/blog/2008/12/15/50427/irelands-answer-use-the-pension-pot/

When you take the pension funds you are almost done. There is little doubt this is a last gasp to save the banks. This too shall fail.